PRINCIPAL FINANCIAL GROUP INC, 10-K filed on 2/14/2020
Annual Report
v3.19.3.a.u2
Document and Entity Information - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2019
Jan. 31, 2020
Jun. 28, 2019
Document and Entity Information      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2019    
Document Transition Report false    
Entity File Number 1-16725    
Entity Registrant Name PRINCIPAL FINANCIAL GROUP, INC    
Entity Incorporation, State or Country Code DE    
Entity Address, Address Line One 711 High Street    
Entity Address, City or Town Des Moines    
Entity Address, State or Province IA    
Entity Address, Postal Zip Code 50392    
Entity Tax Identification Number 42-1520346    
City Area Code 515    
Local Phone Number 247-5111    
Title of 12(b) Security Common Stock, par value $0.01    
Trading Symbol PFG    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Common Stock, Shares Outstanding   274,687,952  
Entity Public Float     $ 16.1
Entity Central Index Key 0001126328    
Current Fiscal Year End Date --12-31    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Amendment Flag false    
v3.19.3.a.u2
Consolidated Statements of Financial Position - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Assets    
Fixed maturities, available-for-sale (2019 and 2018 include $99.4 million and $94.5 million related to consolidated variable interest entities) $ 70,106.2 $ 60,108.5
Fixed maturities, trading 675.9 636.1
Equity securities (2019 and 2018 include $810.9 million and $774.8 million related to consolidated variable interest entities) 1,879.4 1,843.7
Mortgage loans 16,486.9 15,336.9
Real estate (2019 and 2018 include $457.6 million and $364.0 million related to consolidated variable interest entities) 1,714.8 1,729.7
Policy loans 798.0 801.4
Other investments (2019 and 2018 include $263.7 million and $457.9 million related to consolidated variable interest entities and $22.8 million and $23.6 million measured at fair value under the fair value option) 4,690.2 4,310.3
Total investments 96,351.4 84,766.6
Cash and cash equivalents 2,515.9 2,977.5
Accrued investment income 686.6 636.2
Premiums due and other receivables 1,740.3 1,413.1
Deferred acquisition costs 3,521.3 3,693.5
Property and equipment 967.7 767.3
Goodwill 1,693.8 1,100.0
Other intangibles 1,786.7 1,315.1
Separate account assets (2019 and 2018 include $39,130.3 million and $37,183.3 million related to consolidated variable interest entities) 165,468.0 144,987.9
Other assets 1,356.1 1,378.9
Total assets 276,087.8 243,036.1
Liabilities    
Contractholder funds (2019 and 2018 include $394.6 million and $396.0 million related to consolidated variable interest entities) 41,367.5 39,699.7
Future policy benefits and claims 40,838.2 35,664.8
Other policyholder funds 959.4 888.4
Short-term debt 93.4 42.9
Long-term debt (2019 and 2018 include $64.2 million and $58.4 million related to consolidated variable interest entities) 3,734.1 3,259.6
Income taxes currently payable 16.2 25.3
Deferred income taxes 1,796.6 958.4
Separate account liabilities (2019 and 2018 include $39,130.3 million and $37,183.3 million related to consolidated variable interest entities) 165,468.0 144,987.9
Other liabilities (2019 and 2018 include $124.4 million and $104.9 million related to consolidated variable interest entities) 6,863.7 5,661.9
Total liabilities 261,137.1 231,188.9
Redeemable noncontrolling interest (2019 and 2018 include $215.4 million and $325.7 million related to consolidated variable interest entities) 264.9 391.2
Stockholders' equity    
Common stock, par value $0.01 per share - 2,500.0 million shares authorized, 479.3 million and 476.7 million shares issued, and 276.6 million and 279.5 million shares outstanding in 2019 and 2018 4.8 4.8
Additional paid-in capital 10,182.6 10,060.7
Retained earnings (accumulated deficit) 11,074.3 10,290.2
Accumulated other comprehensive income (loss) 1,037.9 (1,565.1)
Treasury stock, at cost (202.7 million and 197.2 million shares in 2019 and 2018) (7,681.6) (7,400.6)
Total stockholders' equity attributable to Principal Financial Group, Inc. 14,618.0 11,390.0
Noncontrolling interest 67.8 66.0
Total stockholders' equity 14,685.8 11,456.0
Total liabilities and stockholders' equity $ 276,087.8 $ 243,036.1
v3.19.3.a.u2
Consolidated Statements of Financial Position (Parenthetical) - USD ($)
shares in Millions, $ in Millions
Dec. 31, 2019
Dec. 31, 2018
Fixed maturities, available-for-sale $ 70,106.2 $ 60,108.5
Equity securities 1,879.4 1,843.7
Real estate 1,714.8 1,729.7
Other investments 4,690.2 4,310.3
Other investments measured at fair value under fair value option 22.8 23.6
Separate account assets 165,468.0 144,987.9
Contractholder funds 41,367.5 39,699.7
Long-term debt 3,734.1 3,259.6
Separate account liabilities 165,468.0 144,987.9
Other liabilities 6,863.7 5,661.9
Redeemable noncontrolling interest $ 264.9 $ 391.2
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, authorized (in shares) 2,500.0 2,500.0
Common stock, issued (in shares) 479.3 476.7
Common stock, outstanding (in shares) 276.6 279.5
Treasury stock (in shares) 202.7 197.2
Aggregate consolidated variable interest entities    
Fixed maturities, available-for-sale $ 99.4 $ 94.5
Equity securities 810.9 774.8
Real estate 457.6 364.0
Other investments 263.7 457.9
Separate account assets 39,130.3 37,183.3
Contractholder funds 394.6 396.0
Long-term debt 64.2 58.4
Separate account liabilities 39,130.3 37,183.3
Other liabilities 124.4 104.9
Redeemable noncontrolling interest $ 215.4 $ 325.7
v3.19.3.a.u2
Consolidated Statements of Operations - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenues                      
Premiums and other considerations                 $ 7,866.6 $ 6,409.6 $ 6,217.4
Fees and other revenues                 4,409.9 4,273.8 3,892.3
Net investment income (loss)                 3,998.4 3,629.2 3,459.3
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 (9.3) (46.3) 606.0
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities                 (38.3) 10.6 (28.7)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income                 (5.2) (39.7) (53.1)
Net impairment (losses) recoveries on available-for-sale securities                 (43.5) (29.1)  
Net impairment (losses) recoveries on available-for-sale securities                     (81.8)
Net realized capital gains (losses)                 (52.8) (75.4) 524.2
Total revenues $ 4,047.2 $ 4,458.4 $ 3,972.6 $ 3,743.9 $ 3,770.6 $ 4,348.1 $ 3,234.9 $ 2,883.6 16,222.1 14,237.2 14,093.2
Expenses                      
Benefits, claims and settlement expenses                 9,905.8 8,192.5 7,822.6
Dividends to policyholders                 119.1 123.6 124.6
Operating expenses                 4,503.9 4,136.7 3,893.8
Total expenses 3,675.9 4,112.7 3,522.3 3,217.9 3,527.7 3,779.0 2,719.5 2,426.6 14,528.8 12,452.8 11,841.0
Income (loss) before income taxes                 1,693.3 1,784.4 2,252.2
Income taxes (benefits)                 249.2 230.7 (72.3)
Net income (loss) 315.3 284.6 392.1 452.1 231.7 460.0 459.5 402.5 1,444.1 1,553.7 2,324.5
Net income (loss) attributable to noncontrolling interest                 49.9 7.2 14.1
Net income (loss) attributable to Principal Financial Group, Inc. $ 300.9 $ 277.1 $ 386.3 $ 429.9 $ 236.5 $ 456.3 $ 456.6 $ 397.1 $ 1,394.2 $ 1,546.5 $ 2,310.4
Earnings per common share                      
Basic earnings per common share (in dollars per share) $ 1.08 $ 0.99 $ 1.38 $ 1.54 $ 0.84 $ 1.60 $ 1.59 $ 1.37 $ 5.00 $ 5.41 $ 8.00
Diluted earnings per common share (in dollars per share) $ 1.07 $ 0.98 $ 1.37 $ 1.53 $ 0.83 $ 1.59 $ 1.58 $ 1.36 $ 4.96 $ 5.36 $ 7.88
v3.19.3.a.u2
Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Consolidated Statements of Comprehensive Income      
Net income (loss) $ 1,444.1 $ 1,553.7 $ 2,324.5
Other comprehensive income (loss), net:      
Net unrealized gains (losses) on available-for-sale securities 2,616.1 (1,529.6) 639.5
Noncredit component of impairment losses on fixed maturities, available-for-sale 3.0 26.4 31.2
Net unrealized gains (losses) on derivative instruments (11.0) 16.0 (42.6)
Foreign currency translation adjustment (78.7) (287.6) 178.9
Net unrecognized postretirement benefit obligation 77.3 (60.9) 37.3
Other comprehensive income (loss) 2,606.7 (1,835.7) 844.3
Comprehensive income (loss) 4,050.8 (282.0) 3,168.8
Comprehensive income (loss) attributable to noncontrolling interest 53.6 2.7 17.7
Comprehensive income (loss) attributable to Principal Financial Group, Inc. $ 3,997.2 $ (284.7) $ 3,151.1
v3.19.3.a.u2
Consolidated Statements of Stockholders' Equity - USD ($)
$ in Millions
Common stock
Additional paid-in capital
Retained earnings (accumulated deficit)
Accumulated other comprehensive income (loss)
Treasury stock
Noncontrolling interest
Total
Balances at Dec. 31, 2016 $ 4.7 $ 9,686.0 $ 7,720.4 $ (675.2) $ (6,508.6) $ 66.5 $ 10,293.8
Increase (decrease) in stockholders' equity              
Common stock issued   162.5         162.5
Stock-based compensation   90.2 (7.9)     0.4 82.7
Treasury stock acquired, common         (220.4)   (220.4)
Dividends to common stockholders     (540.0)       (540.0)
Distributions to noncontrolling interest           (8.4) (8.4)
Contributions from noncontrolling interest           6.0 6.0
Purchase of subsidiary shares from noncontrolling interest   (7.6)       (1.3) (8.9)
Adjustments to redemption amount of redeemable noncontrolling interest   (5.9)         (5.9)
Net income (loss)     2,310.4     7.1 2,317.5
Other comprehensive income (loss)       840.7   2.3 843.0
Balances at Dec. 31, 2017 4.7 9,925.2 9,482.9 165.5 (6,729.0) 72.6 12,921.9
Increase (decrease) in stockholders' equity              
Common stock issued 0.1 63.9         64.0
Stock-based compensation   84.9 (7.7)     (0.4) 76.8
Treasury stock acquired, common         (671.6)   (671.6)
Dividends to common stockholders     (598.6)       (598.6)
Distributions to noncontrolling interest           (13.5) (13.5)
Contributions from noncontrolling interest           3.3 3.3
Purchase of subsidiary shares from noncontrolling interest   (20.6)   (1.6)   (1.8) (24.0)
Adjustments to redemption amount of redeemable noncontrolling interest   7.3       (0.3) 7.0
Effects of implementation of accounting change | ASU 2016-01 - Equity investments     1.0 (1.0)      
Effects of implementation of accounting change | ASU 2014-09 - Revenue recognition     (65.0) 25.6   (0.3) (39.7)
Effects of implementation of accounting change | ASU 2018-02 - Reclassification of certain tax effects     (77.6) 77.6      
Effects of implementation of accounting change related to intra-entity asset transfer taxes, net | ASU 2016-16 - Intra-entity asset transfer taxes     8.7       8.7
Net income (loss)     1,546.5     9.3 1,555.8
Other comprehensive income (loss)       (1,831.2)   (2.9) (1,834.1)
Balances at Dec. 31, 2018 4.8 10,060.7 10,290.2 (1,565.1) (7,400.6) 66.0 11,456.0
Increase (decrease) in stockholders' equity              
Common stock issued   37.7         37.7
Stock-based compensation   89.7 (8.1)     0.3 81.9
Treasury stock acquired, common         (281.0)   (281.0)
Dividends to common stockholders     (606.0)       (606.0)
Distributions to noncontrolling interest           (20.9) (20.9)
Contributions from noncontrolling interest           8.2 8.2
Purchase of subsidiary shares from noncontrolling interest   (0.5)       (0.1) (0.6)
Adjustments to redemption amount of redeemable noncontrolling interest   (5.0)       (0.4) (5.4)
Effects of implementation of accounting change | ASU 2016-02 - Leases     4.0       4.0
Net income (loss)     1,394.2     16.3 1,410.5
Other comprehensive income (loss)       2,603.0   (1.6) 2,601.4
Balances at Dec. 31, 2019 $ 4.8 $ 10,182.6 $ 11,074.3 $ 1,037.9 $ (7,681.6) $ 67.8 $ 14,685.8
v3.19.3.a.u2
Consolidated Statements of Cash Flows - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating activities      
Net income (loss) $ 1,444.1 $ 1,553.7 $ 2,324.5
Adjustments to reconcile net income to net cash provided by operating activities:      
Net realized capital (gains) losses 52.8 75.4 (524.2)
Depreciation and amortization expense 226.8 205.1 195.7
Amortization of deferred acquisition costs and contract costs 371.4 277.3 234.6
Additions to deferred acquisition costs and contract costs (515.5) (443.4) (421.8)
Stock-based compensation 82.6 77.4 82.7
(Income) loss from equity method investments, net of dividends received (111.9) (76.0) (68.2)
Changes in:      
Accrued investment income (50.4) (28.7) (30.0)
Net cash flows for trading securities and equity securities with operating intent (53.8) (133.7) (332.2)
Premiums due and other receivables (247.6) 37.8 (114.2)
Contractholder and policyholder liabilities and dividends 3,599.9 3,610.2 3,296.8
Current and deferred income taxes (benefits) 211.2 274.7 (164.4)
Real estate acquired through operating activities (64.7) (89.2) (82.6)
Real estate sold through operating activities 136.1 133.6 1.4
Other assets and liabilities 401.1 (282.0) (227.1)
Other 11.1 (35.7) 17.0
Net adjustments 4,049.1 3,602.8 1,863.5
Net cash provided by (used in) operating activities 5,493.2 5,156.5 4,188.0
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases (14,137.1) (13,909.8) (13,371.6)
Fixed maturities available-for-sale and equity securities with intent to hold: Sales 2,397.4 3,813.1 1,413.6
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities 7,064.2 6,217.6 8,743.2
Mortgage loans acquired or originated (3,487.7) (3,447.5) (2,755.8)
Mortgage loans sold or repaid 2,335.9 2,228.4 1,872.0
Real estate acquired (127.5) (88.1) (200.5)
Real estate sold 96.3 63.5 481.9
Net (purchases) sales of property and equipment (132.4) (92.3) (164.8)
Purchase of business or interests in subsidiaries, net of cash acquired (1,208.5) (184.7)  
Net change in other investments (489.1) (302.7) (70.8)
Net cash provided by (used in) investing activities (7,688.5) (5,702.5) (4,052.8)
Financing activities      
Issuance of common stock 37.7 64.0 162.5
Acquisition of treasury stock (281.0) (671.6) (220.4)
Proceeds from financing element derivatives     0.1
Payments for financing element derivatives (26.9) (65.9) (77.6)
Purchase of subsidiary shares from noncontrolling interest (1.7) (31.1) (13.3)
Dividends to common stockholders (606.0) (598.6) (540.0)
Issuance of long-term debt 504.9 80.8 2.8
Principal repayments of long-term debt (32.2) (1.3) (56.5)
Net proceeds from (repayments of) short-term borrowings 57.5 8.5 (15.5)
Investment contract deposits 9,200.0 8,308.8 10,154.4
Investment contract withdrawals (7,747.7) (6,589.6) (9,914.6)
Net increase (decrease) in banking operation deposits 623.4 553.0 136.6
Other 5.7 (4.3) (2.5)
Net cash provided by (used in) financing activities 1,733.7 1,052.7 (384.0)
Net increase (decrease) in cash and cash equivalents (461.6) 506.7 (248.8)
Cash and cash equivalents at beginning of period 2,977.5 2,470.8 2,719.6
Cash and cash equivalents at end of period 2,515.9 2,977.5 2,470.8
Supplemental information:      
Cash paid for interest 157.7 150.2 148.6
Cash paid for (received from) income taxes (8.5) $ (96.2) 79.3
Supplemental disclosure of non-cash activities:      
Lease assets established upon adoption of accounting guidance 168.8    
Lease liabilities established upon adoption of accounting guidance 164.0    
Assets received in kind for pension risk transfer transactions $ 1,225.8    
Asset and liability changes resulting from exchange agreement to exit real estate joint ventures:      
Real estate properties received     743.2
Long-term debt assumed on real estate properties received     269.0
Increase in other investments due to discontinuing equity method accounting     $ 222.4
v3.19.3.a.u2
Nature of Operations and Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Nature of Operations and Significant Accounting Policies  
Nature of Operations and Significant Accounting Policies

1. Nature of Operations and Significant Accounting Policies

Description of Business

Principal Financial Group, Inc. (“PFG”) is a leader in global investment management offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through our diverse family of financial services companies.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of PFG and all other entities in which we directly or indirectly have a controlling financial interest as well as those variable interest entities (“VIEs”) in which we are the primary beneficiary. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). All significant intercompany accounts and transactions have been eliminated.

Consolidation

We have relationships with various special purpose entities and other legal entities that must be evaluated to determine if the entities meet the criteria of a VIE or a voting interest entity (“VOE”). This assessment is performed by reviewing contractual, ownership and other rights, including involvement of related parties, and requires use of judgment. First, we determine if we hold a variable interest in an entity by assessing if we have the right to receive expected losses and expected residual returns of the entity. If we hold a variable interest, then the entity is assessed to determine if it is a VIE. An entity is a VIE if the equity at risk is not sufficient to support its activities, if the equity holders lack a controlling financial interest or if the entity is structured with non-substantive voting rights. In addition to the previous criteria, if the entity is a limited partnership or similar entity, it is a VIE if the limited partners do not have the power to direct the entity’s most significant activities through substantive kick-out rights or participating rights. A VIE is evaluated to determine the primary beneficiary. The primary beneficiary of a VIE is the enterprise with (1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. We reassess our involvement with VIEs on a quarterly basis. For further information about VIEs, refer to Note 3, Variable Interest Entities.

If an entity is not a VIE, it is considered a VOE. VOEs are generally consolidated if we own a greater than 50% voting interest. If we determine our involvement in an entity no longer meets the requirements for consolidation under either the VIE or VOE models, the entity is deconsolidated. Entities in which we have management influence over the operating and financing decisions but are not required to consolidate, other than investments accounted for at fair value under the fair value option, are reported using the equity method.

1. Nature of Operations and Significant Accounting Policies (continued)

Recent Accounting Pronouncements

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Standards not yet adopted:

Targeted improvements to the accounting for long-duration insurance contracts

This authoritative guidance updates certain requirements in the accounting for long-duration insurance and annuity contracts.

1.

The assumptions used to calculate the liability for future policy benefits on traditional and limited-payment contracts will be reviewed and updated periodically. Cash flow assumptions will be reviewed at least annually and updated when necessary with the impact recognized in net income. Discount rate assumptions are prescribed as the current upper-medium grade (low credit risk) fixed income instrument yield and will be updated quarterly with the impact recognized in other comprehensive income (“OCI”).

2.

Market risk benefits, which are certain market-based options or guarantees associated with deposit or account balance contracts, will be measured at fair value. The periodic change in fair value related to instrument-specific credit risk will be recognized in OCI while the remaining change in fair value will be recognized in net income.

3.

Deferred acquisition costs (“DAC”) for all insurance and annuity contracts will be amortized on a constant basis over the expected term of the related contracts.

4.

Additional disclosures are required, including disaggregated rollforwards of significant insurance liabilities and other account balances and disclosures about significant inputs, judgments, assumptions and methods used in measurement.

The guidance for the liability for future policy benefits for traditional and limited-payment contracts and DAC will be applied on a modified retrospective basis; that is, to contracts in force as of the beginning of the earliest period presented based on their existing carrying amounts. An entity may elect to apply the changes retrospectively. The guidance for market risk benefits will be applied retrospectively. Early adoption is permitted.

January 1, 2022

Our implementation and evaluation process to date includes, but is not limited to the following:

       identifying and documenting contracts and contract features in scope of the guidance;

       identifying the actuarial models, systems and processes to be updated;

       evaluating and selecting our systems solutions for implementing the new guidance;

       beginning to build key models;

       evaluating our key accounting policies;

       assessing the impact to our chart of accounts;

       developing format and content of new disclosures and

       evaluating transition requirements and impacts.

As we progress through our implementation, we will be able to better assess the impact to our consolidated financial statements; however, we expect this guidance to significantly change how we account for many of our insurance and annuity products.

Goodwill impairment testing

This authoritative guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 (which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill to the carrying amount of that goodwill) from the goodwill impairment test. A goodwill impairment loss will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. Early adoption is permitted.

January 1, 2020

We expect the guidance will reduce complexity and costs associated with performing a Step 2 test, should one be needed in the future. However, the impact of eliminating the Step 2 test from any such future impairment assessment will be dependent on modeling factors that are not currently determinable. We do not expect this guidance to have a material impact on our consolidated financial statements.

1. Nature of Operations and Significant Accounting Policies (continued)

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Credit losses

This authoritative guidance requires entities to use a current expected credit loss (“CECL”) model to measure impairment for most financial assets that are not recorded at fair value through net income. Under the CECL model, an entity will estimate lifetime expected credit losses considering available relevant information about historical events, current conditions and reasonable and supportable forecasts. The CECL model does not apply to available-for-sale debt securities. This guidance also expands the required credit loss disclosures and will be applied using a modified retrospective approach by recording a cumulative effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Early adoption is permitted.

January 1, 2020

The guidance will be adopted using the modified retrospective approach. Our evaluation process is complete and included, but was not limited to, identifying financial assets within scope of the guidance, developing and refining CECL models for the relevant assets, preparing quarterly estimates of the cumulative effect of adoption, developing and refining necessary internal controls and preparing the required financial statement disclosures. The financial statement changes are not material and will result in an immaterial reduction to stockholders’ equity.

Standards adopted:

Implementation costs in a cloud computing arrangement that is a service contract

This authoritative guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance can be applied either retrospectively or prospectively and early adoption is permitted.

January 1, 2019

The effective date of the guidance is January 1, 2020; however, we elected to early-adopt this guidance on a prospective basis, effective January 1, 2019. This guidance did not have a material impact on our consolidated financial statements.

Nonemployee share-based payment accounting

This authoritative guidance simplifies the accounting for share-based payments to nonemployees by generally aligning it with the accounting for share-based payments to employees. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date, where previously the measurement was fixed at performance completion date. The guidance will be applied to equity-classified nonemployee awards for which a measurement date has not been established as of the date of adoption.

January 1, 2019

This guidance did not have a material impact on our consolidated financial statements.

1. Nature of Operations and Significant Accounting Policies (continued)

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Leases

This authoritative guidance requires lessee recognition of lease assets and lease liabilities on the balance sheet. The concept of an operating lease, where the lease assets and liabilities are off balance sheet, is eliminated under the new guidance. For lessors, the guidance modifies lease classification criteria and accounting for certain types of leases. Other key aspects of the guidance relate to the removal of the current real estate-specific guidance and new presentation and disclosure requirements. Lessees and lessors are required to recognize and measure leases using a modified retrospective approach, which includes certain optional practical expedients that may be elected. We elected the alternative transition method, which allows entities to initially apply the new standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption.

January 1, 2019

We adopted the guidance using the modified retrospective approach and comparative periods were not restated. Further details are included under the caption “Adoption of Lease Guidance” and in Note 12, Contingencies, Guarantees, Indemnifications and Leases.

Targeted improvements to accounting for hedging activities

This authoritative guidance updated certain recognition and measurement requirements for hedge accounting. The objective of the guidance is to more closely align the economics of a company’s risk management activities in its financial results and reduce the complexity of applying hedge accounting. The updates included the expansion of hedging strategies that are eligible for hedge accounting, elimination of the separate measurement and reporting of hedge ineffectiveness, presentation of the changes in the fair value of the hedging instrument in the same consolidated statement of operations line as the earnings effect of the hedged item and simplification of hedge effectiveness assessments. This guidance also included new disclosures.

January 1, 2019

This guidance did not have a material impact on our consolidated financial statements. See Note 5, Derivative Financial Instruments, for further details.

Premium amortization on purchased callable debt securities

This authoritative guidance applies to entities that hold certain non-contingently callable debt securities, where the amortized cost basis is at a premium to the price repayable by the issuer at the earliest call date. Under the guidance the premium will be amortized to the first call date.

January 1, 2019

This guidance did not have a material impact on our consolidated financial statements.

1. Nature of Operations and Significant Accounting Policies (continued)

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Reclassification of certain tax effects from accumulated other comprehensive income

This authoritative guidance permits a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for the stranded tax effects resulting from U.S. tax legislation enacted on December 22, 2017, which is referred to as the ‘‘Tax Cuts and Jobs Act’’ (‘‘U.S. tax reform’’). The amount of that reclassification includes the change in corporate income tax rate, as well as an election to include other income tax effects related to the application of U.S. tax reform. The guidance also requires disclosures about stranded tax effects.

January 1, 2018

The effective date of the guidance was January 1, 2019; however, we elected to early adopt the guidance. The guidance was applied at the beginning of the period of adoption and comparative periods were not restated. We reclassified the stranded tax effects in AOCI resulting from U.S. tax reform, which includes the change in corporate income tax rate and an election to reclassify the tax effects of the one-time deemed repatriation tax. A reclassification of $77.6 million was recorded as an increase to AOCI and a decrease to retained earnings.

Revenue recognition

This authoritative guidance replaces all general and most industry specific revenue recognition guidance currently prescribed by U.S. GAAP. The core principle is that an entity recognizes revenue to reflect the transfer of a promised good or service to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for that good or service. This guidance also provides clarification on when an entity is a principal or an agent in a transaction. In addition, the guidance updates the accounting for certain costs associated with obtaining and fulfilling a customer contract. The guidance may be applied using one of the following two methods: (1) retrospectively to each prior reporting period presented, or (2) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application.

January 1, 2018

We adopted the guidance using the modified retrospective approach. The guidance did not have a material impact on our consolidated financial statements. A cumulative effect adjustment of $39.7 million was recorded as a decrease to total stockholders' equity. See Note 17, Revenues from Contracts with Customers, for further details.

Income tax - intra-entity transfers of assets

This authoritative guidance requires entities to recognize current and deferred income tax resulting from an intra-entity asset transfer when the transfer occurs. Prior to issuance of this guidance, U.S. GAAP did not allow recognition of income tax consequences until the asset had been sold to a third party. This guidance requires adoption through a cumulative effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption.

January 1, 2018

We adopted the guidance using the modified retrospective approach. A cumulative effect adjustment of $8.7 million was recorded as an increase to retained earnings. In addition, other assets and deferred income taxes decreased $21.1 million and $29.8 million, respectively, due to the adoption of this guidance.

1. Nature of Operations and Significant Accounting Policies (continued)

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Financial instruments - recognition and measurement
This authoritative guidance addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The guidance eliminated the classification of equity securities into different categories (trading or available-for-sale) and requires equity investments to be measured at fair value with changes in the fair value recognized through net income. The guidance also updated certain financial instrument disclosures and eliminated the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments that are measured at amortized cost on the balance sheet.

January 1, 2018

We adopted this guidance using the modified retrospective approach. A cumulative effect adjustment of $1.0 million was recorded as a decrease to AOCI and a corresponding increase to retained earnings. The guidance did not have a material impact on our consolidated financial statements. See Note 4, Investments, for further details.

Nonfinancial asset derecognition and partial sales of nonfinancial assets

This authoritative guidance clarifies the scope of the recently established guidance on nonfinancial asset derecognition and the accounting for partial sales of nonfinancial assets. The guidance conforms the derecognition guidance on nonfinancial assets with the model for transactions in the new revenue recognition standard.

January 1, 2018

The guidance did not have a material impact on our consolidated financial statements.

Presentation of net periodic pension cost and net periodic postretirement benefit cost

This authoritative guidance requires that an employer disaggregate the service cost component from the other components of net benefit cost. The guidance also provides explicit guidance on the presentation of the service cost component and the other components of net benefit cost in the consolidated statement of operations and allows only the service cost component of net benefit cost to be eligible for capitalization.

January 1, 2018

The guidance did not have a material impact on our consolidated financial statements.

Definition of a business

This authoritative guidance clarifies the definition of a business to assist with evaluating when transactions involving an integrated set of assets and activities (a “set”) should be accounted for as acquisitions or disposals of assets or businesses. The guidance requires that when substantially all of the fair value of the gross assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance also requires a set to include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output to be considered a business. Lastly, the guidance removes the evaluation of whether a market participant could replace missing elements and narrows the definition of outputs by more closely aligning it with how outputs are described in the revenue recognition guidance. The guidance will be applied prospectively.

January 1, 2018

The guidance did not have a material impact on our consolidated financial statements.

Employee share-based payment accounting

This authoritative guidance changes certain aspects of accounting for and reporting share-based payments to employees including changes related to the income tax effects of share-based payments, tax withholding requirements and accounting for forfeitures. Various transition methods will apply depending on the situation being addressed.

January 1, 2017

The guidance was adopted prospectively as indicated by the guidance for each area of change and did not have a material impact on our consolidated financial statements.

1. Nature of Operations and Significant Accounting Policies (continued)

When we adopt new accounting standards, we have a process in place to perform a thorough review of the pronouncement, identify the financial statement and system impacts and create an implementation plan among our impacted business units to ensure we are compliant with the pronouncement on the date of adoption. This includes having effective processes and controls in place to support the reported amounts. Each of the standards listed above is in varying stages in our implementation process based on its issuance and adoption dates. We are on track to implement guidance by the respective effective dates.

Adoption of Lease Guidance

On January 1, 2019, we adopted the guidance using the modified retrospective approach with the cumulative effect of initially applying the standard recognized at the date of adoption. We elected the package of practical expedients permitted under the transition guidance. In addition, we elected the hindsight practical expedient to determine the lease term for existing leases. We have agreements with lease and non-lease components, which we account for as a combined unit of account for all classes.

The impact of the guidance to our consolidated financial statements primarily related to the establishment of additional assets and liabilities of  $168.8 million and $164.0 million, respectively. The difference between the additional assets and liabilities, net of deferred tax impacts, was recorded as a cumulative effect adjustment to retained earnings and increased total stockholders’ equity by $4.0 million.

Results of reporting periods beginning January 1, 2019, are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with our prior accounting. The guidance did not have a material impact on our consolidated statements of operations and did not impact earnings per common share.

Use of Estimates in the Preparation of Financial Statements

The preparation of our consolidated financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the consolidated financial statements and accompanying notes. The most critical estimates include those used in determining:

the fair value of investments in the absence of quoted market values;
investment impairments and valuation allowances;
the fair value of and accounting for derivatives;
the DAC and other actuarial balances where the amortization is based on estimated gross profits (“EGPs”);
the measurement of goodwill, indefinite lived intangible assets, finite lived intangible assets and related impairments or amortization, if any;
the liability for future policy benefits and claims;
the value of our pension and other postretirement benefit obligations and
accounting for income taxes and the valuation of deferred tax assets.

A description of such critical estimates is incorporated within the discussion of the related accounting policies that follow. In applying these policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Actual results could differ from these estimates.

1. Nature of Operations and Significant Accounting Policies (continued)

Closed Block

Principal Life Insurance Company (“Principal Life”) operates a closed block (“Closed Block”) for the benefit of individual participating dividend-paying policies in force at the time of the 1998 mutual insurance holding company (“MIHC”) formation. See Note 6, Closed Block, for further details.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market instruments and other debt issues with a maturity date of three months or less when purchased.

Investments

Fixed maturities include bonds, asset-backed securities (“ABS”), redeemable preferred stock and certain non-redeemable preferred securities. Equity securities include mutual funds, common stock, non-redeemable preferred stock and required regulatory investments. We classify fixed maturities as either available-for-sale or trading at the time of the purchase and, accordingly, carry them at fair value. Equity securities are also carried at fair value. See Note 14, Fair Value Measurements, for methodologies related to the determination of fair value. Unrealized gains and losses related to fixed maturities, available-for-sale, excluding those in fair value hedging relationships, are reflected in stockholders' equity, net of adjustments associated with DAC and related actuarial balances, derivatives in cash flow hedge relationships and applicable income taxes. Mark-to-market adjustments on equity securities, unrealized gains and losses related to hedged portions of fixed maturities, available-for-sale in fair value hedging relationships prior to 2019 and mark-to-market adjustments on certain fixed maturities, trading are reflected in net realized capital gains (losses). Beginning in 2019, unrealized gains and losses related to hedged portions of fixed maturities, available-for-sale in fair value hedging relationships are reflected in net investment income. Mark-to-market adjustments related to certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reflected in net investment income.

The amortized cost of fixed maturities includes cost adjusted for amortization of premiums and discounts, computed using the interest method. The amortized cost of fixed maturities classified as available-for-sale is adjusted for changes in fair value of hedged portions of securities in fair value hedging relationships and declines in value that are other than temporary. Impairments in value deemed to be other than temporary are primarily reported in net income as a component of net realized capital gains (losses), with noncredit impairment losses for certain fixed maturities, available-for-sale reported in OCI. Interest income, as well as prepayment fees and the amortization of the related premium or discount, is reported in net investment income. For loan-backed and structured securities, we recognize income using a constant effective yield based on currently anticipated cash flows.

Real estate investments are reported at cost less accumulated depreciation. The initial cost bases of properties acquired through loan foreclosures are the lower of the fair market values of the properties at the time of foreclosure or the outstanding loan balance. Buildings and land improvements are generally depreciated on the straight-line method over the estimated useful life of improvements and tenant improvement costs are depreciated on the straight-line method over the term of the related lease. We recognize impairment losses for properties when indicators of impairment are present and a property's expected undiscounted cash flows are not sufficient to recover the property's carrying value. In such cases, the cost basis of the property is reduced to fair value. Real estate expected to be disposed is carried at the lower of cost or fair value, less cost to sell, with valuation allowances established accordingly and depreciation no longer recognized. The carrying amount of real estate held for sale was $169.8 million and $209.6 million as of December 31, 2019 and 2018, respectively. Any impairment losses and any changes in valuation allowances are reported in net income.

Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Interest income, as well as prepayment of fees and the amortization of the related premium or discount, is reported in net investment income. Any changes in the valuation allowances are reported in net realized capital gains (losses). We measure impairment based upon the difference between carrying value and estimated value less cost to sell.

1. Nature of Operations and Significant Accounting Policies (continued)

Estimated value is based on either the present value of expected cash flows discounted at the loan's effective interest rate, the loan's observable market price or the fair value of the collateral. If foreclosure is probable, the measurement of any valuation allowance is based upon the fair value of the collateral.

Net realized capital gains and losses on sales of investments are determined on the basis of specific identification. In general, in addition to realized capital gains and losses on investment sales and periodic settlements on derivatives not designated as hedges, we report gains and losses related to the following in net realized capital gains (losses): other-than-temporary impairments of securities and subsequent realized recoveries, mark-to-market adjustments on equity securities, mark-to-market adjustments on certain fixed maturities, trading, mark-to-market adjustments on sponsored investment funds, mark-to-market adjustments on derivatives not designated as hedges, cash flow hedge gains (losses) when the hedged item impacts realized capital gains (losses), changes in the mortgage loan valuation allowance provision, impairments of real estate held for investment and impairments of equity method investments. Investment gains and losses on sales of certain real estate held for sale due to investment strategy and mark-to-market adjustments on certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reported as net investment income and are excluded from net realized capital gains (losses).

Policy loans and certain other investments are reported at cost. Interests in unconsolidated entities, joint ventures and partnerships are generally accounted for using the equity method. We have other investments reported at fair value or for which the fair value option has been elected in prior periods. See Note 14, Fair Value Measurements, for detail on these investments.

Derivatives

Overview

Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices or the values of securities. Derivatives generally used by us include swaps, options, futures and forwards. Derivative positions are either assets or liabilities in the consolidated statements of financial position and are measured at fair value, generally by obtaining quoted market prices or through the use of pricing models. See Note 14, Fair Value Measurements, for policies related to the determination of fair value. Fair values can be affected by changes in interest rates, foreign exchange rates, financial indices, values of securities, credit spreads, and market volatility and liquidity.

Accounting and Financial Statement Presentation

We designate derivatives as either:

(a)a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, including those denominated in a foreign currency (“fair value hedge”);
(b)a hedge of a forecasted transaction or the exposure to variability of cash flows to be received or paid related to a recognized asset or liability, including those denominated in a foreign currency (“cash flow hedge”);
(c)a hedge of a net investment in a foreign operation or
(d)a derivative not designated as a hedging instrument.

Our accounting for the ongoing changes in fair value of a derivative depends on the intended use of the derivative and the designation, as described above, and is determined when the derivative contract is entered into or at the time of redesignation. Hedge accounting is used for derivatives that are specifically designated in advance as hedges and that reduce our exposure to an indicated risk by having a high correlation between changes in the value of the derivatives and the items being hedged at both the inception of the hedge and throughout the hedge period.

Fair Value Hedges. When a derivative is designated as a fair value hedge and is determined to be highly effective, changes in its fair value, along with changes in the fair value of the hedged asset, liability or firm commitment attributable to the hedged risk, are reported in the same income statement line item that is used to report the earnings effect of the hedged item.

1. Nature of Operations and Significant Accounting Policies (continued)

For fair value hedges of fixed maturities, available-for-sale, these changes in fair value are reported in net investment income. Prior to 2019, these changes in fair value were recorded in net realized capital gains (losses). A fair value hedge determined to be highly effective may still result in a mismatch between the change in the fair value of the hedging instrument and the change in the fair value of the hedged item attributable to the hedged risk.

Cash Flow Hedges. When a derivative is designated as a cash flow hedge and is determined to be highly effective, changes in its fair value are recorded as a component of OCI. At the time the variability of cash flows being hedged impacts net income, the related portion of deferred gains or losses on the derivative instrument is reclassified and reported in net income.

Net Investment in a Foreign Operation Hedge. When a derivative is used as a hedge of a net investment in a foreign operation, its change in fair value, to the extent effective as a hedge, is recorded as a component of OCI. If the foreign operation is sold or upon complete or substantially complete liquidation, the deferred gains or losses on the derivative instrument are reclassified into net income.

Non-Hedge Derivatives. If a derivative does not qualify or is not designated for hedge accounting, all changes in fair value are reported in net income without considering the changes in the fair value of the economically associated assets or liabilities.

Hedge Documentation and Effectiveness Testing. At inception, we formally document all relationships between hedging instruments and hedged items, as well as our risk management objective and strategy for undertaking various hedge transactions. This process includes associating all derivatives designated as fair value or cash flow hedges with specific assets or liabilities on the consolidated statements of financial position or with specific firm commitments or forecasted transactions. Effectiveness of the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a hedge is determined to be highly effective, the hedge may still result in a mismatch between the change in the fair value of the hedging instrument and the change in the fair value of the hedged item attributable to the hedged risk.

We use qualitative and quantitative methods to assess hedge effectiveness. Qualitative methods may include monitoring changes to terms and conditions and counterparty credit ratings. Quantitative methods may include statistical tests including regression analysis and minimum variance and dollar offset techniques.

Termination of Hedge Accounting. We prospectively discontinue hedge accounting when (1) the criteria to qualify for hedge accounting is no longer met, e.g., a derivative is determined to no longer be highly effective in offsetting the change in fair value or cash flows of a hedged item; (2) the derivative expires, is sold, terminated or exercised or (3) we remove the designation of the derivative being the hedging instrument for a fair value or cash flow hedge.

If it is determined that a derivative no longer qualifies as an effective hedge, the derivative will continue to be carried on the consolidated statements of financial position at its fair value, with changes in fair value recognized prospectively in net realized capital gains (losses). The asset or liability under a fair value hedge will no longer be adjusted for changes in fair value pursuant to hedging rules and the existing basis adjustment is amortized to the consolidated statements of operations line associated with the asset or liability. The component of AOCI related to discontinued cash flow hedges that are no longer highly effective is amortized to the consolidated statements of operations consistent with the net income impacts of the original hedged cash flows. If a cash flow hedge is discontinued because it is probable the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income.

Embedded Derivatives. We purchase and issue certain financial instruments and products that contain a derivative that is embedded in the financial instrument or product. We assess whether this embedded derivative is clearly and closely related to the asset or liability that serves as its host contract. If we deem that the embedded derivative's terms are not clearly and closely related to the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the derivative is bifurcated from that contract and held at fair value on the consolidated statements of financial position, with changes in fair value reported in net income.

1. Nature of Operations and Significant Accounting Policies (continued)

Contractholder and Policyholder Liabilities

Contractholder and policyholder liabilities (contractholder funds, future policy benefits and claims and other policyholder funds) include reserves for investment contracts, individual and group annuities that provide periodic income payments, universal life insurance, variable universal life insurance, indexed universal life insurance, term life insurance, participating traditional individual life insurance, group dental and vision insurance, group critical illness, group accident, group short-term and long-term disability insurance, group life insurance, individual disability insurance and long-term care insurance. It also includes a provision for dividends on participating policies.

Investment contracts are contractholders' funds on deposit with us and generally include reserves for pension and annuity contracts. Reserves on investment contracts are equal to the cumulative deposits less any applicable charges and withdrawals plus credited interest. Reserves for universal life, variable universal life and indexed universal life insurance contracts are equal to cumulative deposits less charges plus credited interest, which represents the account balances that accrue to the benefit of the policyholders.

We hold additional reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses in later years; universal life, variable universal life and indexed universal life insurance contracts that contain no lapse guarantee features; and annuities with guaranteed minimum death benefits.

Reserves for individual and group annuities that provide periodic income payments, nonparticipating term life insurance and disability income contracts are computed on a basis of assumed investment yield, mortality, morbidity and expenses, including a provision for adverse deviation, which generally varies by plan, year of issue and policy duration. Investment yield is based on our experience. Mortality, morbidity and withdrawal rate assumptions are based on our experience and are periodically reviewed against both industry standards and experience.

Reserves for participating life insurance contracts are based on the net level premium reserve for death and endowment policy benefits. This net level premium reserve is calculated based on dividend fund interest rates and mortality rates guaranteed in calculating the cash surrender values described in the contract.

Participating business represented approximately 6%, 7% and 7% of our life insurance in force and 23%, 26% and 29% of the number of life insurance policies in force as of December 31, 2019, 2018 and 2017, respectively. Participating business represented approximately 21%, 24% and 30% of life insurance premiums for the years ended December 31, 2019, 2018 and 2017, respectively. The amount of dividends to policyholders is declared annually by Principal Life's Board of Directors. The amount of dividends to be paid to policyholders is determined after consideration of several factors including interest, mortality, morbidity and other expense experience for the year and judgment as to the appropriate level of statutory surplus to be retained by Principal Life. At the end of the reporting period, Principal Life establishes a dividend liability for the pro rata portion of the dividends expected to be paid on or before the next policy anniversary date.

Some of our policies and contracts require payment of fees or other policyholder assessments in advance for services that will be rendered over the estimated lives of the policies and contracts. These payments are established as unearned revenue liabilities upon receipt and included in other policyholder funds in the consolidated statements of financial position. These unearned revenue reserves are amortized to net income over the estimated lives of these policies and contracts in relation to the emergence of EGPs.

Short-Duration Contracts

We include the following group products in our short-duration insurance contracts disclosures: long-term disability (“LTD”), group life waiver, dental, vision, short-term disability (“STD”), critical illness, accident and group life.

Future policy benefits and claims include reserves for group life and disability insurance that provide periodic income payments. These reserves are computed using assumptions of mortality, morbidity and investment performance. These assumptions are based on our experience, industry results, emerging trends and future expectations. Future policy benefits and claims also include reserves for incurred but unreported group disability, dental, vision, critical illness, accident and life insurance claims.

1. Nature of Operations and Significant Accounting Policies (continued)

We recognize claims costs in the period the service was provided to our policyholders. However, claims costs incurred in a particular period are not known with certainty until after we receive, process and pay the claims. We determine the amount of this liability using actuarial methods based on historical claim payment patterns as well as emerging cost trends, where applicable, to determine our estimate of claim liabilities.

We have defined claim frequency as follows for each short-duration product:  

LTD: Claim frequency is based on submitted reserve claim counts.
Group Life Waiver: Claim frequency is based on submitted reserve claim counts, consistent with LTD.
Dental and Vision: Claim frequency is based on the claim form, which may include one or more procedures.
STD, Critical Illness and Accident: Claim frequency is based on submitted claims.
Group Life: Claim frequency is based on submitted life claims (lives, not coverages).

We did not make any significant changes to our methodologies or assumptions used to calculate the liability for unpaid claims for short-duration contracts during 2019.

Liability for Unpaid Claims

The liability for unpaid claims for both long-duration and short-duration contracts is an estimate of the ultimate net cost of reported and unreported losses not yet settled. This liability is estimated using actuarial analyses and case basis evaluations. Although considerable variability is inherent in such estimates, we believe the liability for unpaid claims is adequate. These estimates are continually reviewed and, as adjustments to this liability become necessary, such adjustments are reflected in net income. Our liability for unpaid claims does not include any allocated claim adjustment expenses.

We incur claim adjustment expenses for both long-duration and short-duration contracts that cannot be allocated to a specific claim. Our claim adjustment expense liability is estimated using actuarial analyses based on historical trends of expenses and expected claim runout patterns.  

See Note 8, Insurance Liabilities, under the caption “Liability for Unpaid Claims” for further details.

Recognition of Premiums and Other Considerations, Fees and Other Revenues and Benefits

Products with fixed and guaranteed premiums and benefits consist principally of whole life and term life insurance policies and individual disability income. Premiums from these products are recognized as premium revenue when due. Related policy benefits and expenses for individual life products are associated with earned premiums and result in the recognition of profits over the expected term of the policies and contracts.

Immediate annuities with life contingencies include products with fixed and guaranteed annuity considerations and benefits and consist principally of group and individual single premium annuities with life contingencies. Annuity considerations from these products are recognized as premium revenue. However, the collection of these annuity considerations does not represent the completion of the earnings process, as we establish annuity reserves using estimates for mortality and investment assumptions, which include provision for adverse deviation as required by U.S. GAAP. We anticipate profits to emerge over the life of the annuity products as we earn investment income, pay benefits and release reserves.

Group life, dental, vision, critical illness, accident and disability premiums are generally recorded as premium revenue over the term of the coverage. Certain group contracts contain experience premium refund provisions based on a pre-defined formula that reflects their claim experience. Experience premium refunds reduce revenue over the term of the coverage and are adjusted to reflect current experience. Related policy benefits and expenses are associated with earned premiums and result in the recognition of profits over the term of the policies and contracts. Fees for contracts providing claim processing or other administrative services are recorded as revenue over the period the service is provided.

1. Nature of Operations and Significant Accounting Policies (continued)

Universal life-type policies are insurance contracts with terms that are not fixed. Amounts received as payments for such contracts are not reported as premium revenues. Revenues for universal life-type insurance contracts consist of policy charges for the cost of insurance, policy initiation and administration, surrender charges and other fees that have been assessed against policy account values and investment income. Policy benefits and claims that are charged to expense include interest credited to contracts and benefit claims incurred in the period in excess of related policy account balances.

Investment contracts do not subject us to significant risks arising from policyholder mortality or morbidity and consist primarily of guaranteed investment contracts (“GICs”), funding agreements and certain deferred annuities. Amounts received as payments for investment contracts are established as investment contract liability balances and are not reported as premium revenues. Revenues for investment contracts consist of investment income and policy administration charges. Investment contract benefits that are charged to expense include benefit claims incurred in the period in excess of related investment contract liability balances and interest credited to investment contract liability balances.

Fees and other revenues are earned for asset management, investment advisory and distribution services provided to retail and institutional clients based largely upon contractual rates applied to the specified amounts in the clients’ portfolios, which include various platforms such as mutual funds, collective investment trusts and business trusts. Additionally, fees and other revenues are earned for administrative services performed including recordkeeping, trust and custody and reporting services for retirement savings plans, insurance companies, endowments and other financial institutions and other products. Fees and other revenues received for performance of asset management and administrative services are recognized as revenue when earned, typically when the service is performed.

Fees for managing customers’ mandatory retirement savings accounts in Chile are collected with each monthly deposit made by our customers. If a customer stops contributing before retirement age, we collect no fees but services are still provided. We recognize revenue from these long-term service contracts as services are performed over the life of the contract. 

Deferred Acquisition Costs

Incremental direct costs of contract acquisition as well as certain costs directly related to acquisition activities (underwriting, policy issuance and processing, medical and inspection and sales force contract selling) for the successful acquisition of new and renewal insurance policies and investment contract business are capitalized to the extent recoverable. Commissions and other incremental direct costs for the acquisition of long-term service contracts are also capitalized to the extent recoverable. Maintenance costs and acquisition costs that are not deferrable are charged to net income as incurred.

DAC for universal life-type insurance contracts and certain investment contracts are amortized over the expected lifetime of the contracts in relation to EGPs or, in certain circumstances, estimated gross revenues (“EGR”). This amortization is adjusted in the current period when EGPs or EGRs are revised. EGRs include similar assumptions as the revenue component of EGPs and the changes of future estimates and reflection of actual experience and market conditions is done in the same manner as EGPs.

For individual variable universal life insurance, individual variable annuities and group annuities that have separate account U.S. equity investment options, we utilize a mean reversion methodology (reversion to the mean assumption), a common industry practice, to determine the future domestic equity market growth rate assumption used for the calculation of EGPs.

DAC for participating life insurance policies are amortized in proportion to estimated gross margins (“EGM”) rather than EGPs. EGMs include similar assumption items as EGPs. We stopped selling participating business in the early 2000s. Some products allow for underwritten death benefit increases and cost of living adjustments, resulting in a small amount of new DAC each year, and the amortization schedules are modified as appropriate.

DAC for non-participating term life insurance and individual disability policies are amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policyholder liabilities. Once these assumptions are made for a given policy or group of policies, they will not be changed over the life of the policy unless a loss recognition event occurs.

1. Nature of Operations and Significant Accounting Policies (continued)

DAC on insurance policies and investment contracts are subject to recoverability testing at the time of policy issue and loss recognition testing on an annual basis, or when an event occurs that may warrant loss recognition. If loss recognition or impairment is necessary, DAC would be written off to the extent it is determined that future policy premiums and investment income or gross profits are not adequate to cover related losses and expenses.

DAC on short-duration group benefits policies are amortized over the estimated term of the underlying contracts.

Deferred Acquisition Costs on Internal Replacements

All insurance and investment contract modifications and replacements are reviewed to determine if the internal replacement results in a substantially changed contract. If so, the acquisition costs, sales inducements and unearned revenue associated with the new contract are deferred and amortized over the lifetime of the new contract. In addition, the existing DAC, sales inducement costs and unearned revenue balances associated with the replaced contract are written off. If an internal replacement results in a substantially unchanged contract, the acquisition costs, sales inducements and unearned revenue associated with the new contract are immediately recognized in the period incurred. In addition, the existing DAC, sales inducement costs or unearned revenue balance associated with the replaced contract is not written off, but instead is carried over to the new contract.

Long-Term Debt

Long-term debt includes notes payable, nonrecourse mortgages and other debt with a maturity date greater than one year at the date of issuance. Current maturities of long-term debt are classified as long-term debt in our consolidated statements of financial position. Long-term debt is primarily recorded at the unpaid principal balance, net of unamortized discount, premium and issuance costs.

Reinsurance

We enter into reinsurance agreements with other companies in the normal course of business in order to limit losses and minimize exposure to significant risks. We may assume reinsurance from or cede reinsurance to other companies. Assets and liabilities related to reinsurance ceded are reported on a gross basis. Premiums and expenses are reported net of reinsurance ceded. The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. We are contingently liable with respect to reinsurance ceded to other companies in the event the reinsurer is unable to meet the obligations it has assumed. As of December 31, 2019 and 2018, we had $465.5 million and $450.6 million of net ceded reinsurance recoverables related to claims that have been received, respectively. As of December 31, 2019 and 2018, $457.2 million, or 98%, and $435.6 million, or 97%, were with our five largest ceded reinsurers, respectively. Our total amount recoverable from reinsurers includes net ceded reinsurance recoverables related to claims that have been received and reserves ceded to reinsurers; however, it does not reflect potentially offsetting impacts of collateral. As of December 31, 2019 and 2018, the total amount recoverable from reinsurers was $961.4 million and $920.8 million, respectively,  and is recognized in premiums due and other receivables.

1. Nature of Operations and Significant Accounting Policies (continued)

The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows:

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Premiums and other considerations:

Direct

$

8,428.1

$

6,928.3

$

6,699.3

Assumed

1.6

 

1.7

 

1.9

Ceded

(563.1)

 

(520.4)

 

(483.8)

Net premiums and other considerations

$

7,866.6

$

6,409.6

$

6,217.4

Benefits, claims and settlement expenses:

Direct

$

10,463.6

$

8,667.7

$

8,216.3

Assumed

23.1

 

24.9

 

27.7

Ceded

(580.9)

 

(500.1)

 

(421.4)

Net benefits, claims and settlement expenses

$

9,905.8

$

8,192.5

$

7,822.6

Separate Accounts

The separate accounts are legally segregated and are not subject to the claims that arise out of any of our other business. The client, rather than us, directs the investments and bears the investment risk of these funds. The separate account assets represent the fair value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments and are presented as a summary total within the consolidated statements of financial position. An equivalent amount is reported as separate account liabilities, which represent the obligation to return the monies to the client. We receive fees for mortality, withdrawal and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses of the separate accounts are not reflected in the consolidated statements of operations.

Separate account assets and separate account liabilities include certain international retirement accumulation products where the segregated funds and associated obligation to the client are consolidated within our financial statements. We have determined that summary totals are the most meaningful presentation for these funds.

As of December 31, 2019 and December 31, 2018, the separate accounts included a separate account valued at $100.4 million and $94.9 million, respectively, which primarily included shares of our stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under our 2001 demutualization. These shares are included in both basic and diluted earnings per share calculations. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations.

Income Taxes

We file a U.S. consolidated income tax return that includes all of our qualifying subsidiaries. In addition, we file income tax returns in all states and foreign jurisdictions in which we conduct business. Our policy of allocating income tax expenses and benefits to companies in the group is generally based upon pro rata contribution of taxable income or operating losses. We are taxed at corporate rates on taxable income based on existing tax laws. Current income taxes are charged or credited to net income based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. Deferred income taxes are provided for the tax effect of temporary differences in the financial reporting and income tax bases of assets and liabilities, net operating loss carryforwards and tax credit carryforwards using enacted income tax rates and laws. The effect on deferred income tax assets and deferred income tax liabilities of a change in tax rates is recognized in net income in the period in which the change is enacted. Subsequent to a change in tax rates and laws, any stranded tax effects remaining in AOCI will be released only if an entire portfolio is liquidated, sold or extinguished.

1. Nature of Operations and Significant Accounting Policies (continued)

However, a specific exception to this rule was adopted effective January 1, 2018, to reclassify the stranded tax effects generated by U.S. tax reform from AOCI to retained earnings. Further details are included under the caption “Recent Accounting Pronouncements.”

Foreign Exchange

Assets and liabilities of our foreign subsidiaries and affiliates denominated in non-U.S. dollars, where the U.S. dollar is not the functional currency, are translated into U.S. dollar equivalents at the year-end spot foreign exchange rates. Resulting translation adjustments are reported as a component of stockholders' equity, along with any related hedge and tax effects. Revenues and expenses for these entities are translated at the average exchange rates. Revenue, expense and other foreign currency transaction and translation adjustments that affect cash flows are reported in net income, along with related hedge and tax effects.

Goodwill and Other Intangibles

Goodwill and other intangible assets include the cost of acquired subsidiaries in excess of the fair value of the net tangible assets recorded in connection with acquisitions. Goodwill and indefinite-lived intangible assets are not amortized. Rather, they are tested for impairment during the third quarter each year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested at the reporting unit level, which is a business one level below the operating segment, if financial information is prepared and regularly reviewed by management at that level. Once goodwill has been assigned to a reporting unit, it is no longer associated with a particular acquisition; therefore, all of the activities within a reporting unit, whether acquired or organically grown, are available to support the goodwill value. Impairment testing for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying value.

Intangible assets with a finite useful life are amortized as related benefits emerge and are reviewed periodically for indicators of impairment in value. If facts and circumstances suggest possible impairment, the sum of the estimated undiscounted future cash flows expected to result from the use of the asset is compared to the current carrying value of the asset. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized for the excess of the carrying amount of assets over their fair value.

Earnings Per Common Share

Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period and excludes the dilutive effect of equity awards. Diluted earnings per common share reflects the potential dilution that could occur if dilutive securities, such as options and non-vested stock grants, were exercised or resulted in the issuance of common stock.

v3.19.3.a.u2
Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2019
Goodwill and Other Intangible Assets  
Goodwill and Other Intangible Assets

2. Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill reported in our segments were as follows:

    

Retirement

    

Principal

    

    

U.S.

    

    

  

and Income

Global

Principal

Insurance

Solutions

Investors

International

Solutions

Corporate

Consolidated

(in millions)

Balance as of January 1, 2018

$

57.4

$

247.3

$

707.5

$

56.6

$

$

1,068.8

Goodwill from acquisitions (1)

65.0

46.8

2.1

113.9

Goodwill disposed (2)

(12.0)

(12.0)

Foreign currency

 

 

(5.0)

 

(65.7)

 

 

 

(70.7)

Balance as of December 31, 2018

57.4

307.3

676.6

56.6

2.1

1,100.0

Goodwill from acquisitions (3)

618.5

6.5

(1.1)

623.9

Foreign currency

1.5

(31.6)

(30.1)

Other (4)

2.2

(2.2)

Balance as of December 31, 2019

$

675.9

$

317.5

$

642.8

$

56.6

$

1.0

$

1,693.8

(1)Relates to the acquisitions of: a) RobustWealth, a financial technology company, which is consolidated within our Corporate segment with the majority of the goodwill allocated to our Principal Global Investors segment; b) INTERNOS, a London-based European real estate investment manager that, upon acquisition, became Principal Real Estate Europe Limited and is consolidated within our Principal Global Investors segment; c) MetLife Afore, S.A. de C.V., which was MetLife, Inc.’s pension fund management business in Mexico and is consolidated within our Principal International segment.
(2)Relates to sales of closed blocks of business in Mexico.
(3)Relates to the acquisitions of: a) Wells Fargo Institutional Retirement & Trust business consolidated within our Retirement and Income Solutions segment; b) a consolidating interest in Finisterre Capital LLP within our Principal Global Investors segment for which we previously held an equity method interest; c) measurement period adjustments related to RobustWealth within our Principal Global Investors segment and Corporate segment.
(4)Relates to the movement of our investment management company in Brazil from the Principal International segment to the Principal Global Investors segment.

On July 1, 2019, we completed the purchase of the Institutional Retirement & Trust business of Wells Fargo Bank, N.A. (the “Acquired Business”), which includes defined contribution, defined benefit, executive deferred compensation, employee stock ownership plans, institutional trust and custody, and institutional asset advisory businesses. The purchase price consisted of $1.2 billion cash paid at closing, which was funded with available cash and debt financing. See “Note 9, Debt” for further information on the debt financing. An additional earn-out payment of up to $150.0 million may be payable based upon the retention of fee revenue of the Acquired Business through December 31, 2020.

The fair value of the net assets acquired primarily relates to intangible assets. Of the acquired intangible assets, $618.5 million was assigned to goodwill and is not subject to amortization. The goodwill is largely related to the opportunities to realize substantial revenue and cost synergies while achieving scale in operations.

Of the remaining acquired intangible assets, $510.3 million was assigned to customer relationships, which are subject to amortization over a 23-year useful life, and $35.4 million was assigned to technology, which is subject to amortization over a 6-year useful life.

2. Goodwill and Other Intangible Assets (continued)

Finite Lived Intangible Assets

Amortized intangible assets primarily relate to customer relationship intangibles associated with the Acquired Business and previous acquisitions in Chile, Mexico and Hong Kong. The finite lived intangible assets that continue to be subject to amortization over a weighted average remaining expected life of 18 years were as follows:

December 31, 

    

2019

    

2018

  

(in millions)

Gross carrying value

$

1,346.3

$

810.2

Accumulated amortization

 

343.2

288.4

Net carrying value

$

1,003.1

$

521.8

The amortization expense for intangible assets with finite useful lives was $62.8 million, $53.9 million and $45.4 million for 2019, 2018 and 2017, respectively. As of December 31, 2019, the estimated amortization expense for the next five years is as follows (in millions):

Year ending December 31:

    

  

2020

$

74.5

2021

73.2

2022

72.4

2023

70.2

2024

69.0

Indefinite Lived Intangible Assets

The net carrying amount of unamortized indefinite lived intangible assets was $783.6 million and $793.3 million as of December 31, 2019 and 2018, respectively. As of both December 31, 2019 and 2018, $608.0 million relates to investment management contracts associated with our acquisition of WM Advisors, Inc. in 2006. The remaining balance primarily relates to the trade name intangible associated with our acquisition of Administradora de Fondos de Pensiones Cuprum S.A. in 2013.

v3.19.3.a.u2
Variable Interest Entities
12 Months Ended
Dec. 31, 2019
Variable Interest Entities  
Variable Interest Entities

3. Variable Interest Entities

We have relationships with various types of entities which may be VIEs. Certain VIEs are consolidated in our financial results. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Consolidation” for further details of our consolidation accounting policies. We did not provide financial or other support to investees designated as VIEs for the periods ended December 31, 2019 and December 31, 2018.

Consolidated Variable Interest Entities

Grantor Trust

We contributed undated subordinated floating rate notes to a grantor trust. The trust separated its cash flows by issuing an interest-only certificate and a residual certificate related to each note contributed. Each interest-only certificate entitles the holder to interest on the stated note for a specified term, while the residual certificate entitles the holder to interest payments subsequent to the term of the interest-only certificate and to all principal payments. We retained the interest-only certificates and the residual certificates were subsequently sold to third parties. We determined the grantor trust is a VIE due to insufficient equity to sustain it. We determined we are the primary beneficiary as a result of our contribution of securities into the trust and our significant continuing interest in the trust.

3.  Variable Interest Entities (continued)

Commercial Mortgage-Backed Securities

We sold commercial mortgage loans to a real estate mortgage investment conduit trust. The trust issued various commercial mortgage-backed securities (“CMBS”) certificates using the cash flows of the underlying commercial mortgage loans it purchased. This was considered a VIE due to insufficient equity to sustain itself. We determined we were the primary beneficiary as we retained the special servicing role for the assets within the trust as well as the ownership of the bond class that controls the unilateral kick-out rights of the special servicer. The trust was unwound in the third quarter of 2019.

Mandatory Retirement Savings Funds

We hold an equity interest in Chilean mandatory privatized social security funds in which we provide asset management services. We determined the mandatory privatized social security funds, which also include contributions for voluntary pension savings, voluntary non-pension savings and compensation savings accounts, are VIEs. This is because the equity holders as a group lack the power, due to voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance and also because equity investors are protected from below-average market investment returns relative to the industry's return, due to a regulatory guarantee that we provide. Further we concluded we are the primary beneficiary through our power to make decisions and our significant variable interest in the funds. The purpose of the funds, which reside in legally segregated entities, is to provide long-term retirement savings. The obligation to the customer is directly related to the assets held in the funds and, as such, we present the assets as separate account assets and the obligation as separate account liabilities within our consolidated statements of financial position.

Principal International Hong Kong offers retirement pension schemes in which we provide trustee, administration and asset management services to employers and employees under the Hong Kong Mandatory Provident Fund and Occupational Retirement Schemes Ordinance pension schemes. Each pension scheme has various guaranteed and non-guaranteed constituent funds, or investment options, in which customers can invest their money. The guaranteed funds provide either a guaranteed rate of return to the customer or a minimum guarantee on withdrawals under certain qualifying events. We determined the guaranteed funds are VIEs due to the fact the equity holders, as a group, lack the obligation to absorb expected losses due to the guarantee we provide. We concluded we are the primary beneficiary because we have the power to make decisions and to receive benefits and the obligation to absorb losses that could be potentially significant to the VIE. Therefore, we consolidate the underlying assets and liabilities of the funds and present as separate accounts or within the general account, depending on the terms of the guarantee.

Real Estate

We invest in several real estate limited partnerships and limited liability companies. The entities invest in real estate properties. Certain of these entities are VIEs based on the combination of our significant economic interest and related voting rights. We determined we are the primary beneficiary as a result of our power to control the entities through our significant ownership. Due to the nature of these real estate investments, the investment balance will fluctuate as we purchase and sell interests in the entities and as capital expenditures are made to improve the underlying real estate.

Sponsored Investment Funds

We sponsor and invest in certain investment funds for which we provide asset management services. Although our asset management fee is commensurate with the services provided and consistent with fees for similar services negotiated at arms-length, we have a variable interest for funds where our other interests are more than insignificant. The funds are VIEs as the equity holders lack power through voting rights to direct the activities of the entity that most significantly impact its economic performance. We determined we are the primary beneficiary of the VIEs where our interest in the entity is more than insignificant and we are the asset manager.

We also invest in certain series of another investment fund. These series are VIEs as the equity holders of each series lack the power to direct the most significant activities of the VIE. We determined we are the primary beneficiary of these series as our interest is more than insignificant and collectively we have the power to direct the most significant activities of the fund.

3. Variable Interest Entities (continued)

Assets and Liabilities of Consolidated Variable Interest Entities

The carrying amounts of our consolidated VIE assets, which can only be used to settle obligations of consolidated VIEs, and liabilities of consolidated VIEs for which creditors do not have recourse were as follows:

December 31, 2019

    

December 31, 2018

Total

Total

Total

Total

    

assets

    

liabilities

    

assets

    

liabilities

  

(in millions)

Grantor trust (1)

$

99.9

$

98.6

$

95.0

$

89.4

CMBS

 

 

 

6.4

 

Mandatory retirement savings funds (2)

 

39,891.1

 

39,524.9

 

37,915.7

 

37,579.3

Real estate (3)

 

479.7

 

88.0

 

379.2

 

70.6

Sponsored investment funds (4)

 

331.4

 

2.2

 

526.5

 

3.6

Total

$

40,802.1

$

39,713.7

$

38,922.8

$

37,742.9

(1)The assets of the grantor trust are primarily fixed maturities, available-for-sale. The liabilities are primarily other liabilities that reflect an embedded derivative of the forecasted transaction to deliver the underlying securities.
(2)The assets of the mandatory retirement savings funds include separate account assets and equity securities. The liabilities include separate account liabilities and contractholder funds.
(3)The assets of the real estate VIEs primarily include real estate and cash. Liabilities primarily include long-term debt and other liabilities.
(4)The assets of sponsored investment funds are primarily fixed maturities and equity securities, certain of which are reported with other investments, and cash. The consolidated statements of financial position included a $215.4 million and $325.7 million redeemable noncontrolling interest for sponsored investment funds as of December 31, 2019 and December 31, 2018, respectively.

Unconsolidated Variable Interest Entities

We hold a variable interest in a number of VIEs where we are not the primary beneficiary. Our investments in these VIEs are reported in fixed maturities, available-for-sale; fixed maturities, trading; equity securities and other investments in the consolidated statements of financial position and are described below.

Unconsolidated VIEs include certain CMBS, residential mortgage-backed pass-through securities ("RMBS") and other ABS. All of these entities were deemed VIEs because the equity within these entities is insufficient to sustain them. We determined we are not the primary beneficiary in the entities within these categories of investments. This determination was based primarily on the fact we do not own the class of security that controls the unilateral right to replace the special servicer or equivalent function.

We invest in cash collateralized debt obligations, collateralized bond obligations, collateralized loan obligations and other collateralized structures, which are VIEs due to insufficient equity to sustain the entities. We have determined we are not the primary beneficiary of these entities primarily because we do not control the economic performance of the entities and were not involved with the design of the entities or because we do not have a potentially significant variable interest in the entities for which we are the asset manager.

We have invested in various VIE trusts and similar entities as a debt holder. Most of these entities are classified as VIEs due to insufficient equity to sustain them. In addition, we have an entity classified as a VIE based on the combination of our significant economic interest and lack of voting rights. We have determined we are not the primary beneficiary primarily because we do not control the economic performance of the entities and were not involved with the design of the entities.

We have invested in partnerships and other funds, which are classified as VIEs. The entities are VIEs as equity holders lack the power to control the most significant activities of the entities because the equity holders do not have either the ability by a simple majority to exercise substantive kick-out rights or substantive participating rights. We have determined we are not the primary beneficiary because we do not have the power to direct the most significant activities of the entities.

3.  Variable Interest Entities (continued)

As previously discussed, we sponsor, invest in and have other interests in certain investment funds that are VIEs. We determined we are not the primary beneficiary of the VIEs for which we are the asset manager but do not have a potentially significant variable interest in the funds.

We hold an equity interest in Mexican mandatory privatized social security funds in which we provide asset management services. Our equity interest in the funds is considered a variable interest. We concluded the funds are VIEs because the equity holders as a group lack decision-making ability through their voting rights. We are not the primary beneficiary of the VIEs because although we, as the asset manager, have the power to direct the activities of the VIEs, we do not have a potentially significant variable interest in the funds.

The carrying value and maximum loss exposure for our unconsolidated VIEs were as follows:

Maximum exposure to

    

Asset carrying value

    

loss (1)

  

(in millions)

December 31, 2019

Fixed maturities, available-for-sale:

Corporate

$

238.2

$

225.7

Residential mortgage-backed pass-through securities

2,982.4

2,913.9

Commercial mortgage-backed securities

4,850.2

4,746.6

Collateralized debt obligations (2)

 

3,215.3

 

3,226.7

Other debt obligations

 

8,191.1

 

8,076.4

Fixed maturities, trading:

Residential mortgage-backed pass-through securities

 

282.3

 

282.3

Commercial mortgage-backed securities

 

28.2

 

28.2

Collateralized debt obligations (2)

20.9

20.9

Other debt obligations

13.2

13.2

Equity securities

123.2

123.2

Other investments:

Other limited partnership and fund interests (3)

 

911.9

 

1,467.0

December 31, 2018

Fixed maturities, available-for-sale:

Corporate

$

235.3

$

222.6

Residential mortgage-backed pass-through securities

2,460.6

2,488.5

Commercial mortgage-backed securities

3,945.6

4,023.1

Collateralized debt obligations (2)

 

2,420.8

 

2,451.3

Other debt obligations

 

7,153.2

 

7,196.6

Fixed maturities, trading:

Residential mortgage-backed pass-through securities

 

322.6

 

322.6

Commercial mortgage-backed securities

 

13.8

 

13.8

Collateralized debt obligations (2)

11.8

11.8

Other debt obligations

9.7

9.7

Equity securities

103.9

103.9

Other investments:

Other limited partnership and fund interests (3)

 

737.5

 

1,432.2

(1)Our risk of loss is limited to our initial investment measured at amortized cost for fixed maturities, available-for-sale. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading and equity securities. Our risk of loss is limited to our carrying value plus any unfunded commitments and/or guarantees and similar provisions for our other investments. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional equity when called upon to do so by the general partner or investment manager.
(2)Primarily consists of collateralized loan obligations backed by secured corporate loans.
(3)As of December 31, 2019 and December 31, 2018, the maximum exposure to loss for other limited partnership and fund interests includes $129.1 million and $132.2 million, respectively, of debt within certain of our managed international real estate funds that is fully secured by assets whose value exceeds the amount of the debt, but also includes recourse to the investment manager.

3. Variable Interest Entities (continued)

Money Market Funds

We are the investment manager for certain money market mutual funds. These types of funds are exempt from assessment under any consolidation model due to a scope exception for money market funds registered under Rule 2a-7 of the Investment Company Act of 1940 or similar funds. As of December 31, 2019 and December 31, 2018, money market mutual funds we manage held $4.0 billion and $3.0 billion in total assets, respectively. We have no contractual obligation to contribute to these funds; however, we provide support through the waiver of fees and through expense reimbursements. The amount of fees waived and expenses reimbursed was insignificant.

v3.19.3.a.u2
Investments
12 Months Ended
Dec. 31, 2019
Investments  
Investments

4. Investments

Fixed Maturities and Equity Securities

The amortized cost, gross unrealized gains and losses, other-than-temporary impairments in AOCI and fair value of available-for-sale securities were as follows:

Other-than-

Gross

Gross

temporary

Amortized

unrealized

unrealized

impairments in

    

cost

    

gains

    

losses

    

Fair value

    

AOCI (1)

  

(in millions)

December 31, 2019

Fixed maturities, available-for-sale:

U.S. government and agencies

$

1,627.0

$

100.2

$

3.0

$

1,724.2

$

Non-U.S. governments

 

852.3

 

144.1

 

0.2

 

996.2

 

States and political subdivisions

 

6,857.1

 

644.5

 

11.6

 

7,490.0

 

Corporate

 

36,993.1

 

3,706.5

 

52.2

 

40,647.4

 

Residential mortgage-backed pass-through securities

 

2,913.9

 

72.3

 

3.8

 

2,982.4

 

Commercial mortgage-backed securities

 

4,746.6

 

127.6

 

24.0

 

4,850.2

 

15.8

Collateralized debt obligations (2)

 

3,226.7

 

2.9

 

14.3

 

3,215.3

 

0.9

Other debt obligations

 

8,085.8

 

129.6

 

14.9

 

8,200.5

 

31.7

Total fixed maturities, available-for-sale

$

65,302.5

$

4,927.7

$

124.0

$

70,106.2

$

48.4

December 31, 2018

Fixed maturities, available-for-sale:

U.S. government and agencies

$

1,441.6

$

16.4

$

17.0

$

1,441.0

$

Non-U.S. governments

 

833.4

 

71.7

 

14.6

 

890.5

 

States and political subdivisions

 

6,125.0

 

196.0

 

95.3

 

6,225.7

 

Corporate

 

35,134.6

 

1,249.9

 

845.2

 

35,539.3

 

Residential mortgage-backed pass-through securities

 

2,488.5

 

21.9

 

49.8

 

2,460.6

 

Commercial mortgage-backed securities

 

4,023.1

 

17.1

 

94.6

 

3,945.6

 

16.3

Collateralized debt obligations (2)

 

2,451.3

 

 

30.5

 

2,420.8

 

1.2

Other debt obligations

 

7,228.3

 

39.4

 

82.7

 

7,185.0

 

36.1

Total fixed maturities, available-for-sale

$

59,725.8

$

1,612.4

$

1,229.7

$

60,108.5

$

53.6

(1)Excludes $62.3 million and $64.2 million as of December 31, 2019 and December 31, 2018, respectively, of net unrealized gains on impaired fixed maturities, available-for-sale related to changes in fair value subsequent to the impairment date, which are included in gross unrealized gains and gross unrealized losses.
(2)Primarily consists of collateralized loan obligations backed by secured corporate loans.

4. Investments (continued)

The amortized cost and fair value of fixed maturities, available-for-sale as of December 31, 2019, by expected maturity, were as follows:

    

Amortized cost

    

Fair value

  

(in millions)

Due in one year or less

$

2,138.3

$

2,154.0

Due after one year through five years

9,955.3

10,319.2

Due after five years through ten years

12,080.0

12,894.4

Due after ten years

22,155.9

25,490.2

Subtotal

46,329.5

50,857.8

Mortgage-backed and other asset-backed securities

18,973.0

19,248.4

Total

$

65,302.5

$

70,106.2

Actual maturities may differ because borrowers may have the right to call or prepay obligations. Our portfolio is diversified by industry, issuer and asset class. Credit concentrations are managed to established limits.

Net Investment Income

Major components of net investment income were as follows:

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Fixed maturities, available-for-sale (1)

$

2,606.0

$

2,479.9

$

2,342.3

Fixed maturities, trading

23.8

 

26.4

 

12.6

Equity securities, available-for-sale

 

 

21.7

Equity securities, trading

 

 

46.1

Equity securities

110.5

38.8

Mortgage loans

707.0

 

641.4

 

605.9

Real estate

191.1

 

158.8

 

129.4

Policy loans

44.0

 

45.0

 

45.6

Cash and cash equivalents

65.3

 

56.2

 

28.6

Derivatives (1)

(2.0)

 

0.1

 

(3.2)

Other

370.8

 

285.0

 

319.6

Total

4,116.5

 

3,731.6

 

3,548.6

Investment expenses

(118.1)

 

(102.4)

 

(89.3)

Net investment income

$

3,998.4

$

3,629.2

$

3,459.3

(1)Upon adoption of authoritative guidance effective January 1, 2019, the change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships are reported in net investment income with the earnings effect of fixed maturities, available-for-sale. Prior to 2019, the change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships were reported in net realized capital gains (losses). See Note 5, Derivative Financial Instruments, for further details.

4. Investments (continued)

Net Realized Capital Gains and Losses

Major components of net realized capital gains (losses) on investments were as follows:

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Fixed maturities, available-for-sale:

Gross gains

$

15.5

$

40.2

$

14.7

Gross losses

(15.3)

 

(74.8)

 

(27.2)

Net impairment losses

(43.5)

 

(29.1)

 

(81.7)

Hedging, net (1)

(9.3)

 

(39.6)

 

(28.5)

Fixed maturities, trading (2)

43.0

 

(9.0)

 

(8.0)

Equity securities, available-for-sale:

Gross gains

 

 

0.2

Net impairment losses

(0.1)

Equity securities, trading (3)

 

 

65.0

Equity securities (4)

84.5

(17.7)

Mortgage loans

3.0

 

6.2

 

9.0

Derivatives (1)

(120.3)

 

11.7

 

(149.8)

Other (5)

(10.4)

 

36.7

 

730.6

Net realized capital gains (losses)

$

(52.8)

$

(75.4)

$

524.2

(1)Upon adoption of authoritative guidance effective January 1, 2019, the change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships are reported in net investment income with the earnings effect of fixed maturities, available-for-sale. Prior to 2019, the change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships were reported in net realized capital gains (losses). See Note 5, Derivative Financial Instruments, for further details. Gains (losses) for fixed maturities, available-for-sale related to terminated cash flow hedges continue to be reflected in net realized capital gains (losses).
(2)Unrealized gains (losses) on fixed maturities, trading still held at the reporting date were $32.8 million, $(12.2) million and $(7.5) million for the years ended December 31, 2019, 2018 and 2017, respectively.
(3)Unrealized gains on equity securities, trading still held at the reporting date were $45.3 million for the year ended December 31, 2017. This excludes $34.9 million of unrealized gains on equity securities, trading still held at the reporting date for the year ended December 31, 2017 that were reported in net investment income.
(4)Unrealized gains (losses) on equity securities still held at the reporting date were $61.6 million and $(39.9) million for the years ended December 31, 2019 and 2018, respectively. This excludes $66.9 million and $4.9 million of unrealized gains on equity securities still held at the reporting date for the years ended December 31, 2019 and 2018, respectively, that were reported in net investment income.
(5)Further details relating to other gains in 2017 are included under the caption “ Real Estate Transactions."

Proceeds from sales of investments (excluding call and maturity proceeds) in fixed maturities, available-for-sale were $1,654.8 million, $3,067.2 million and $1,345.8 million in 2019, 2018 and 2017, respectively.

Other-Than-Temporary Impairments

We have a process in place to identify fixed maturity securities that could potentially have an impairment that is other than temporary. Prior to 2018, we also used this process to assess equity securities for impairment. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions and other similar factors. This process also involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues.

Each reporting period, all securities are reviewed to determine whether an other-than-temporary decline in value exists and whether losses should be recognized. We consider relevant facts and circumstances in evaluating whether a credit or interest rate related impairment of a security is other than temporary.

4. Investments (continued)

Relevant facts and circumstances considered include: (1) the extent and length of time the fair value has been below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events; (4) for structured securities, the adequacy of the expected cash flows; (5) our intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity and (6) for equity securities, our ability and intent to hold the security for a period of time that allows for the recovery in value. To the extent we determine a security is deemed to be other than temporarily impaired, an impairment loss is recognized.

The way in which impairment losses on fixed maturities are recognized in the financial statements is dependent on the facts and circumstances related to the specific security. If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, we recognize an other-than-temporary impairment in net income for the difference between amortized cost and fair value. If we do not expect to recover the amortized cost basis, we do not plan to sell the security and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, the recognition of the other-than-temporary impairment is bifurcated. We recognize the credit loss portion in net income and the noncredit loss portion in OCI (“bifurcated OTTI”). Prior to 2018, impairment losses on equity securities were recognized in net income and were measured as the difference between amortized cost and fair value.

Total other-than-temporary impairment losses, net of recoveries from the sale of previously impaired securities, were as follows:

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Fixed maturities, available-for-sale

$

(38.3)

$

10.6

$

(28.6)

Equity securities, available-for-sale

 

 

(0.1)

Total other-than-temporary impairment losses, net of recoveries from the sale of previously impaired securities

(38.3)

 

10.6

 

(28.7)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from OCI (1)

(5.2)

 

(39.7)

 

(53.1)

Net impairment losses on available-for-sale securities

$

(43.5)

$

(29.1)

$

(81.8)

(1)Represents the net impact of (a) gains resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI and (b) losses resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold.

We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The ABS cash flow estimates are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate security cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or liquidations using bond specific facts and circumstances including timing, security interests and loss severity.

4. Investments (continued)

The following table provides a rollforward of accumulated credit losses for fixed maturities with bifurcated credit losses. The purpose of the table is to provide detail of (1) additions to the bifurcated credit loss amounts recognized in net realized capital gains (losses) during the period and (2) decrements for previously recognized bifurcated credit losses where the loss is no longer bifurcated and/or there has been a positive change in expected cash flows or accretion of the bifurcated credit loss amount.

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Beginning balance

$

(117.5)

$

(124.3)

$

(139.9)

Credit losses for which an other-than-temporary impairment was not previously recognized

(6.8)

 

(11.3)

 

(15.0)

Credit losses for which an other-than-temporary impairment was previously recognized

(11.8)

 

(20.0)

 

(42.5)

Reduction for credit losses previously recognized on fixed maturities now sold, paid down or intended to be sold

54.3

 

29.5

 

63.3

Net reduction for positive changes in cash flows expected to be collected and amortization (1)

0.8

 

8.6

 

10.0

Foreign currency translation adjustment

 

 

(0.2)

Ending balance

$

(81.0)

$

(117.5)

$

(124.3)

(1)Amounts are recognized in net investment income.

Gross Unrealized Losses for Available-for-Sale Securities

For available-for-sale securities with unrealized losses, including other-than-temporary impairment losses reported in OCI, the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows:

  

December 31, 2019

Less than

Greater than or

    

twelve months

 

equal to twelve months

Total

    

    

Gross

 

    

Gross

    

Gross

Fair

unrealized

Fair

unrealized

Fair

unrealized

value

losses

    

value

    

losses

    

value

    

losses

  

(in millions)

Fixed maturities, available-for-sale:

U.S. government and agencies

$

100.0

$

1.9

$

74.2

$

1.1

$

174.2

$

3.0

Non-U.S. governments

 

17.6

 

0.2

 

12.4

 

 

30.0

 

0.2

States and political subdivisions

 

559.9

 

11.2

 

86.3

 

0.4

 

646.2

 

11.6

Corporate

 

1,041.5

 

27.8

 

394.7

 

24.4

 

1,436.2

 

52.2

Residential mortgage-backed pass- through securities

 

429.6

 

1.4

 

237.3

 

2.4

 

666.9

 

3.8

Commercial mortgage-backed securities

 

829.3

 

9.2

 

268.5

 

14.8

 

1,097.8

 

24.0

Collateralized debt obligations (1)

 

639.4

 

1.8

 

1,447.8

 

12.5

 

2,087.2

 

14.3

Other debt obligations

 

1,772.8

 

9.5

 

613.7

 

5.4

 

2,386.5

 

14.9

Total fixed maturities, available-for-sale

$

5,390.1

$

63.0

$

3,134.9

$

61.0

$

8,525.0

$

124.0

(1) Primarily consists of collateralized loan obligations backed by secured corporate loans.

Of the total amounts, Principal Life’s consolidated portfolio represented $8,380.7 million in available-for-sale fixed maturities with gross unrealized losses of $103.9 million. Of the available-for-sale fixed maturities within Principal Life’s consolidated portfolio in a gross unrealized loss position, 97% were investment grade (rated AAA through BBB-) with an average price of 99 (carrying value/amortized cost) as of December 31, 2019. Gross unrealized losses in our fixed maturities portfolio decreased during the year ended December 31, 2019, primarily due to a decrease in interest rates and tightening of credit spreads.

4. Investments (continued)

For those securities that had been in a continuous unrealized loss position for less than twelve months, Principal Life’s consolidated portfolio held 882 securities with a carrying value of $5,302.7 million and unrealized losses of $44.0 million reflecting an average price of 99 as of December 31, 2019. Of this portfolio, 98% was investment grade (rated AAA through BBB-) as of December 31, 2019, with associated unrealized losses of $43.1 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired.

For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, Principal Life’s consolidated portfolio held 502 securities with a carrying value of $3,078.0 million and unrealized losses of $59.9 million. The average credit rating of this portfolio was AA+ with an average price of 98 as of December 31, 2019. Of the $59.9 million in unrealized losses, the corporate sector accounts for $23.6 million in unrealized losses with an average price of 94 and an average credit rating of BBB-. The remaining unrealized losses also include $14.6 million within the commercial mortgage-backed securities sector with an average price of 95 and an average credit rating of AA+. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired.

Because we expected to recover our amortized cost, it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be at maturity, we did not consider these investments to be other-than-temporarily impaired as of December 31, 2019.

December 31, 2018

Less than

Greater than or

 

twelve months

 

equal to twelve months

Total

    

Gross

    

Gross

    

Gross

Fair

unrealized

Fair

unrealized

Fair

unrealized

    

value

    

losses

    

value

    

losses

    

value

    

losses

  

(in millions)

Fixed maturities, available-for-sale:

U.S. government and agencies

$

101.8

$

1.6

$

500.3

$

15.4

$

602.1

$

17.0

Non-U.S. governments

 

210.2

 

4.7

 

191.5

 

9.9

 

401.7

 

14.6

States and political subdivisions

 

1,359.9

 

33.9

 

1,590.3

 

61.4

 

2,950.2

 

95.3

Corporate

 

13,198.4

 

476.0

 

6,865.0

 

369.2

 

20,063.4

 

845.2

Residential mortgage-backed pass- through securities

 

236.7

 

1.0

 

1,410.2

 

48.8

 

1,646.9

 

49.8

Commercial mortgage-backed securities

 

790.3

 

11.6

 

2,223.2

 

83.0

 

3,013.5

 

94.6

Collateralized debt obligations (1)

 

2,233.3

 

24.0

 

162.6

 

6.5

 

2,395.9

 

30.5

Other debt obligations

 

985.5

 

4.9

 

3,665.1

 

77.8

 

4,650.6

 

82.7

Total fixed maturities, available-for-sale

$

19,116.1

$

557.7

$

16,608.2

$

672.0

$

35,724.3

$

1,229.7

(1) Primarily consists of collateralized loan obligations backed by secured corporate loans.

Of the total amounts, Principal Life’s consolidated portfolio represented $35,051.9 million in available-for-sale fixed maturities with gross unrealized losses of $1,202.9 million. Of the available-for-sale fixed maturities within Principal Life’s consolidated portfolio in a gross unrealized loss position, 95% were investment grade (rated AAA through BBB-) with an average price of 97 (carrying value/amortized cost) as of December 31, 2018. Gross unrealized losses in our fixed maturities portfolio increased during the year ended December 31, 2018, primarily due to widening of credit spreads and an increase in interest rates.

For those securities that had been in a continuous unrealized loss position for less than twelve months, Principal Life’s consolidated portfolio held 2,076 securities with a carrying value of $18,764.0 million and unrealized losses of $541.3 million reflecting an average price of 97 as of December 31, 2018. Of this portfolio, 92% was investment grade (rated AAA through BBB-) as of December 31, 2018, with associated unrealized losses of $473.7 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired.

4. Investments (continued)

For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, Principal Life’s consolidated portfolio held 2,335 securities with a carrying value of $16,287.9 million and unrealized losses of $661.6 million. The average credit rating of this portfolio was AA- with an average price of 96 as of December 31, 2018. Of the $661.6 million in unrealized losses, the corporate sector accounts for $360.4 million in unrealized losses with an average price of 95 and an average credit rating of A-. The remaining unrealized losses also include $82.2 million within the commercial mortgage-backed securities sector with an average price of 96 and an average credit rating of AA+.  The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired.

Because we expected to recover our amortized cost, it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be at maturity, we did not consider these investments to be other-than-temporarily impaired as of December 31, 2018.

Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments

The net unrealized gains and losses on investments in available-for-sale securities, the noncredit component of impairment losses on fixed maturities available-for-sale and the net unrealized gains and losses on derivative instruments in cash flow hedge relationships are reported as separate components of stockholders’ equity. The cumulative amount of net unrealized gains and losses on available-for-sale securities and derivative instruments in cash flow hedge relationships net of adjustments related to DAC and related actuarial balances, policyholder liabilities, noncontrolling interest and applicable income taxes was as follows:

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Net unrealized gains on fixed maturities, available-for-sale (1)

$

4,834.2

$

400.8

Noncredit component of impairment losses on fixed maturities, available-for-sale

(48.4)

 

(53.6)

Net unrealized gains on derivative instruments

94.1

 

118.5

Adjustments for assumed changes in amortization patterns

(261.0)

 

30.3

Adjustments for assumed changes in policyholder liabilities

(1,133.5)

 

(293.7)

Net unrealized gains on other investments and noncontrolling interest adjustments

96.8

 

68.8

Provision for deferred income taxes

(766.9)

 

(63.8)

Net unrealized gains on available-for-sale securities and derivative instruments

$

2,815.3

$

207.3

(1)Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships.

Mortgage Loans

Mortgage loans consist of commercial and residential mortgage loans. We evaluate risks inherent in our commercial mortgage loans in two classes: (1) brick and mortar property loans, including mezzanine loans, where we analyze the property’s rent payments as support for the loan, and (2) credit tenant loans (“CTL”), where we rely on the credit analysis of the tenant for the repayment of the loan. We evaluate risks inherent in our residential mortgage loan portfolio in two classes: (1) first lien mortgages and (2) home equity mortgages. The carrying amount of our mortgage loan portfolio was as follows:

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Commercial mortgage loans

$

15,017.2

$

13,996.3

Residential mortgage loans

1,496.7

 

1,368.0

Total amortized cost

16,513.9

 

15,364.3

Valuation allowance

(27.0)

 

(27.4)

Total carrying value

$

16,486.9

$

15,336.9

4. Investments (continued)

We periodically purchase mortgage loans as well as sell mortgage loans we have originated. Mortgage loans purchased and sold were as follows:

 

For the year ended December 31,

    

2019

    

2018

    

2017

  

(in millions)

Commercial mortgage loans:

Purchased

$

200.5

$

127.5

$

144.2

Sold

1.6

2.2

28.9

Residential mortgage loans:

Purchased

489.2

394.2

346.0

Sold

70.7

80.3

152.2

Our commercial mortgage loan portfolio consists primarily of non-recourse, fixed rate mortgages on stabilized properties. Our commercial mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:

  

December 31, 2019

December 31, 2018

Amortized

 

Percent

Amortized

Percent

    

cost

    

of total

    

cost

    

of total

   

($ in millions)

 

Geographic distribution

New England

$

613.9

4.1

%  

$

640.6

4.6

%

Middle Atlantic

4,139.7

27.5

 

3,927.3

28.0

East North Central

624.5

4.2

 

592.8

4.2

West North Central

237.2

1.6

 

205.8

1.5

South Atlantic

2,318.4

15.4

 

2,206.5

15.8

East South Central

438.5

2.9

 

422.5

3.0

West South Central

1,450.0

9.7

 

1,213.8

8.7

Mountain

931.8

6.2

 

968.6

6.9

Pacific

3,963.7

26.4

 

3,567.6

25.5

International

299.5

2.0

 

250.8

1.8

Total

$

15,017.2

 

100.0

%  

$

13,996.3

 

100.0

%

Property type distribution

Office

$

4,887.1

32.6

%

$

4,625.8

33.0

%

Retail

2,052.6

13.7

 

2,305.6

16.5

Industrial

2,268.5

15.1

 

2,312.9

16.5

Apartments

5,246.9

34.9

 

4,250.5

30.4

Hotel

90.8

0.6

 

99.8

0.7

Mixed use/other

471.3

3.1

 

401.7

2.9

Total

$

15,017.2

 

100.0

%  

$

13,996.3

 

100.0

%

Our residential mortgage loan portfolio is composed of first lien mortgages with an amortized cost of $1,485.7 million and $1,352.9 million and home equity mortgages with an amortized cost of $11.0 million and $15.1 million as of December 31, 2019 and December 31, 2018, respectively. Our first lien loans are concentrated in Chile and the United States. Our residential home equity mortgages are concentrated in the United States and are generally second lien mortgages comprised of closed-end loans and lines of credit.

Mortgage Loan Credit Monitoring

Commercial Credit Risk Profile Based on Internal Rating

We actively monitor and manage our commercial mortgage loan portfolio. All commercial mortgage loans are analyzed regularly and substantially all are internally rated, based on a proprietary risk rating cash flow model, in order to monitor the financial quality of these assets.

4. Investments (continued)

The model stresses expected cash flows at various levels and at different points in time depending on the durability of the income stream, which includes our assessment of factors such as location (macro and micro markets), tenant quality and lease expirations. Our internal rating analysis presents expected losses in terms of an S&P Global (“S&P”) bond equivalent rating. As the credit risk for commercial mortgage loans increases, we adjust our internal ratings downward with loans in the category “B+ and below” having the highest risk for credit loss. Internal ratings on commercial mortgage loans are updated at least annually and potentially more often for certain loans with material changes in collateral value or occupancy and for loans on an internal “watch list”.

Commercial mortgage loans that require more frequent and detailed attention are identified and placed on an internal “watch list”. Among the criteria that would indicate a potential problem are significant negative changes in ratios of loan to value or contract rents to debt service, major tenant vacancies or bankruptcies, borrower sponsorship problems, late payments, delinquent taxes and loan relief/restructuring requests.

The amortized cost of our commercial mortgage loan portfolio by credit risk, as determined by our internal rating system expressed in terms of an S&P bond equivalent rating, was as follows:

December 31, 2019

    

Brick and mortar

    

CTL

    

Total

  

(in millions)

A- and above

$

13,885.2

$

76.7

$

13,961.9

BBB+ thru BBB-

 

943.1

 

83.8

 

1,026.9

BB+ thru BB-

 

23.3

 

 

23.3

B+ and below

 

5.1

 

 

5.1

Total

$

14,856.7

$

160.5

$

15,017.2

 

December 31, 2018

    

Brick and mortar

    

CTL

    

Total

  

(in millions)

A- and above

$

12,735.2

$

84.3

$

12,819.5

BBB+ thru BBB-

 

977.3

 

105.7

 

1,083.0

BB+ thru BB-

 

88.3

 

 

88.3

B+ and below

 

5.5

 

 

5.5

Total

$

13,806.3

$

190.0

$

13,996.3

Residential Credit Risk Profile Based on Performance Status

Our residential mortgage loan portfolio is monitored based on performance of the loans. Monitoring on a residential mortgage loan increases when the loan is delinquent or earlier if there is an indication of potential impairment. We define non-performing residential mortgage loans as loans 90 days or greater delinquent or on non-accrual status.

The amortized cost of our performing and non-performing residential mortgage loans was as follows:

December 31, 2019

    

First liens

    

Home equity

    

Total

  

(in millions)

Performing

$

1,474.2

$

8.0

$

1,482.2

Non-performing

 

11.5

 

3.0

 

14.5

Total

$

1,485.7

$

11.0

$

1,496.7

4. Investments (continued)

December 31, 2018

    

First liens

    

Home equity

    

Total

  

(in millions)

Performing

$

1,340.3

$

10.8

$

1,351.1

Non-performing

 

12.6

 

4.3

 

16.9

Total

$

1,352.9

$

15.1

$

1,368.0

Non-Accrual Mortgage Loans

Commercial and residential mortgage loans are placed on non-accrual status if we have concern regarding the collectability of future payments or if a loan has matured without being paid off or extended. Factors considered may include conversations with the borrower, loss of major tenant, bankruptcy of borrower or major tenant, decreased property cash flow for commercial mortgage loans or number of days past due and other circumstances for residential mortgage loans. Based on an assessment as to the collectability of the principal, a determination is made to apply any payments received either against the principal, against the valuation allowance or according to the contractual terms of the loan. When a loan is placed on non-accrual status, the accrued unpaid interest receivable is reversed against interest income. Accrual of interest resumes after factors resulting in doubts about collectability have improved. Residential first lien mortgages in the Chilean market are carried on accrual for a longer period of delinquency than domestic loans, as assessment of collectability is based on the nature of the loans and collection practices in that market.

The amortized cost of mortgage loans on non-accrual status was as follows:

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Residential:

First liens

$

8.8

$

10.1

Home equity

3.0

 

4.3

Total

$

11.8

$

14.4

The aging of our mortgage loans, based on amortized cost, was as follows:

    

December 31, 2019

    

    

    

Recorded

investment

90 days or

90 days or

30-59 days

60-89 days

more past

Total

more and

    

past due

    

past due

    

due

    

past due

    

Current

    

Total loans

    

accruing

  

(in millions)

Commercial-brick and mortar

$

$

$

$

$

14,856.7

$

14,856.7

$

Commercial-CTL

160.5

160.5

Residential-first liens

46.6

9.3

11.2

67.1

1,418.6

1,485.7

2.7

Residential-home equity

0.8

0.3

1.1

9.9

11.0

Total

$

47.4

$

9.3

$

11.5

$

68.2

$

16,445.7

$

16,513.9

$

2.7

December 31, 2018

Recorded

investment

90 days or

90 days or

30-59 days

60-89 days

more past

Total

more and

    

past due

    

past due

    

due

    

past due

    

Current

    

Total loans

    

accruing

  

(in millions)

Commercial-brick and mortar

$

$

$

$

$

13,806.3

$

13,806.3

$

Commercial-CTL

190.0

190.0

Residential-first liens

44.3

8.4

12.1

64.8

1,288.1

1,352.9

2.5

Residential-home equity

0.8

0.6

0.4

1.8

13.3

15.1

Total

$

45.1

$

9.0

$

12.5

$

66.6

$

15,297.7

$

15,364.3

$

2.5

4. Investments (continued)

Mortgage Loan Valuation Allowance

We establish a valuation allowance to provide for the risk of credit losses inherent in our portfolio. The valuation allowance includes loan specific reserves for loans that are deemed to be impaired as well as reserves for pools of loans with similar risk characteristics where a property risk or market specific risk has not been identified but for which we anticipate a loss may occur. Mortgage loans on real estate are considered impaired when, based on current information and events, it is probable we will be unable to collect all amounts due according to contractual terms of the loan agreement. When we determine a loan is impaired, a valuation allowance is established equal to the difference between the carrying amount of the mortgage loan and the estimated value reduced by the cost to sell. Estimated value is based on either the present value of the expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price or fair value of the collateral. Subsequent changes in the estimated value are reflected in the valuation allowance. Amounts on loans deemed to be uncollectible are charged off and removed from the valuation allowance. The change in the valuation allowance provision is included in net realized capital gains (losses) on our consolidated statements of operations.

The valuation allowance is maintained at a level believed adequate by management to absorb estimated probable credit losses. Management’s periodic evaluation and assessment of the valuation allowance adequacy is based on known and inherent risks in the portfolio, adverse situations that may affect a borrower’s ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, portfolio delinquency information, underwriting standards, peer group information, current economic conditions, loss experience and other relevant factors. The evaluation of our impaired loan component is subjective, as it requires the estimation of timing and amount of future cash flows expected to be received on impaired loans.

We review our commercial mortgage loan portfolio and analyze the need for a valuation allowance for any loan that is delinquent for 60 days or more, in process of foreclosure, restructured, on the internal “watch list” or that currently has a valuation allowance. In addition to establishing allowance levels for specifically identified impaired commercial mortgage loans, management determines an allowance for all other loans in the portfolio for which historical experience and current economic conditions indicate certain losses exist. These loans are segregated by risk rating level with an estimated loss ratio applied against each risk rating level. The loss ratio is generally based upon historical loss experience for each risk rating level as adjusted for certain current environmental factors management believes to be relevant.

For our residential mortgage loan portfolio, we separate the loans into several homogeneous pools, each of which consist of loans of a similar nature including but not limited to loans similar in collateral, term and structure and loan purpose or type. We evaluate loan pools based on aggregated risk ratings, estimated specific loss potential in the different classes of credits, and historical loss experience by pool type. We adjust these quantitative factors for qualitative factors of present conditions. Qualitative factors include items such as economic and business conditions, changes in the portfolio, value of underlying collateral and concentrations. Residential mortgage loan pools exclude loans that have been restructured or impaired, as those loans are evaluated individually.

4. Investments (continued)

A rollforward of our valuation allowance and ending balances of the allowance and loan balance by basis of impairment method was as follows:

    

Commercial

    

Residential

    

Total

  

(in millions)

For the year ended December 31, 2019

Beginning balance

$

24.3

$

3.1

$

27.4

Provision

 

0.2

 

(3.2)

 

(3.0)

Charge-offs

 

 

(0.6)

 

(0.6)

Recoveries

 

 

3.2

 

3.2

Ending balance

$

24.5

$

2.5

$

27.0

Allowance ending balance by basis of impairment method:

Individually evaluated for impairment

$

$

1.4

$

1.4

Collectively evaluated for impairment

 

24.5

 

1.1

 

25.6

Allowance ending balance

$

24.5

$

2.5

$

27.0

Loan balance by basis of impairment method:

Individually evaluated for impairment

$

$

11.4

$

11.4

Collectively evaluated for impairment

 

15,017.2

 

1,485.3

 

16,502.5

Loan ending balance

$

15,017.2

$

1,496.7

$

16,513.9

For the year ended December 31, 2018

Beginning balance

$

25.8

$

6.9

$

32.7

Provision

 

(1.5)

 

(4.5)

 

(6.0)

Charge-offs

 

 

(2.4)

 

(2.4)

Recoveries

 

 

3.1

 

3.1

Ending balance

$

24.3

$

3.1

$

27.4

Allowance ending balance by basis of impairment method:

Individually evaluated for impairment

$

$

1.4

$

1.4

Collectively evaluated for impairment

 

24.3

 

1.7

 

26.0

Allowance ending balance

$

24.3

$

3.1

$

27.4

Loan balance by basis of impairment method:

Individually evaluated for impairment

$

$

9.2

$

9.2

Collectively evaluated for impairment

 

13,996.3

 

1,358.8

 

15,355.1

Loan ending balance

$

13,996.3

$

1,368.0

$

15,364.3

For the year ended December 31, 2017

Beginning balance

$

27.4

$

17.5

$

44.9

Provision

 

(1.6)

 

(10.4)

 

(12.0)

Charge-offs

 

 

(5.1)

 

(5.1)

Recoveries

 

 

4.9

 

4.9

Ending balance

$

25.8

$

6.9

$

32.7

Allowance ending balance by basis of impairment method:

Individually evaluated for impairment

$

$

4.5

$

4.5

Collectively evaluated for impairment

 

25.8

 

2.4

 

28.2

Allowance ending balance

$

25.8

$

6.9

$

32.7

Loan balance by basis of impairment method:

Individually evaluated for impairment

$

$

12.5

$

12.5

Collectively evaluated for impairment

 

12,897.3

 

1,273.4

 

14,170.7

Loan ending balance

$

12,897.3

$

1,285.9

$

14,183.2

Impaired Mortgage Loans

Impaired mortgage loans are loans with a related specific valuation allowance, loans whose carrying amount has been reduced to the expected collectible amount because the impairment has been considered other than temporary or a loan modification has been classified as a troubled debt restructuring (“TDR”).

4. Investments (continued)

Based on an assessment as to the collectability of the principal, a determination is made to apply any payments received either against the principal, against the valuation allowance or according to the contractual terms of the loan. Our recorded investment in and unpaid principal balance of impaired loans along with the related loan specific allowance for losses, if any, and the average recorded investment and interest income recognized during the time the loans were impaired were as follows:

December 31, 2019

Unpaid

Recorded

principal

Related

    

investment

    

balance

    

allowance

  

(in millions)

With no related allowance recorded:

Residential-first liens

$

0.8

$

$

With an allowance recorded:

Residential-first liens

 

6.8

 

5.1

 

0.2

Residential-home equity

 

3.8

 

5.0

 

1.2

Total:

Residential

$

11.4

$

10.1

$

1.4

 

December 31, 2018

 

 

Unpaid

 

Recorded

principal

Related

    

investment

    

balance

    

allowance

  

(in millions)

With no related allowance recorded:

Residential-first liens

$

1.6

$

1.6

$

With an allowance recorded:

Residential-first liens

 

2.2

 

2.2

 

Residential-home equity

 

5.4

 

6.5

 

1.4

Total:

Residential

$

9.2

$

10.3

$

1.4

  

Average

 

    

recorded

Interest income

    

investment

    

recognized

(in millions)

For the year ended December 31, 2019

With no related allowance recorded:

Residential-first liens

$

1.2

$

With an allowance recorded:

Residential-first liens

 

4.5

 

0.1

Residential-home equity

 

4.6

 

0.1

Total:

Residential

$

10.3

$

0.2

For the year ended December 31, 2018

With no related allowance recorded:

Residential-first liens

$

1.3

$

With an allowance recorded:

Residential-first liens

 

3.2

 

0.1

Residential-home equity

 

6.5

 

0.2

Total:

Residential

$

11.0

$

0.3

For the year ended December 31, 2017

With no related allowance recorded:

Residential-first liens

$

1.2

$

With an allowance recorded:

Residential-first liens

 

4.4

 

0.2

Residential-home equity

 

10.3

 

0.2

Total:

Residential

$

15.9

$

0.4

4. Investments (continued)

Mortgage Loan Modifications

Our commercial and residential mortgage loan portfolios can include loans that have been modified. We assess loan modifications on a case-by-case basis to evaluate whether a TDR has occurred. When we have commercial mortgage loan TDRs, they are modified to delay or reduce principal payments and to reduce or delay interest payments. The commercial mortgage loan modifications result in delayed cash receipts, a decrease in interest income and loan rates that are considered below market. When we have residential mortgage loan TDRs, they include modifications of interest-only payment periods, delays in principal balloon payments and interest rate reductions. Residential mortgage loan modifications result in delayed or decreased cash receipts and a decrease in interest income.

When we have commercial mortgage loan TDRs, they are reserved for in the mortgage loan valuation allowance at the estimated fair value of the underlying collateral reduced by the cost to sell.

When we have residential mortgage loan TDRs, they are specifically reserved for in the mortgage loan valuation allowance if losses result from the modification. Residential mortgage loans that have defaulted or have been discharged through bankruptcy are reduced to the expected collectible amount.

We did not have any significant loans that were modified and met the criteria of a TDR in 2019, 2018 and 2017.

Real Estate

Depreciation expense on invested real estate was $60.0 million, $54.1 million and $55.9 million in 2019, 2018 and 2017, respectively. Accumulated depreciation was $526.0 million and $487.2 million as of December 31, 2019 and 2018, respectively.

4. Investments (continued)

Real Estate Transactions

In September 2017, we entered an exchange agreement to exit certain real estate joint ventures. The transaction resulted in us transferring our interest in certain real estate properties in exchange for our joint venture partner’s interest in certain other real estate properties. In a subsequent transaction we sold certain of these real estate properties to a third party. Both transactions closed in September 2017 and resulted in a net pre-tax realized capital gain of $690.9 million (net after-tax realized capital gain of $410.8 million).

Other Investments

Other investments include interests in unconsolidated entities, domestic and international joint ventures and partnerships and properties owned jointly with venture partners and operated by the partners. Such investments are generally accounted for using the equity method. In applying the equity method, we record our share of income or loss reported by the equity investees in net investment income. Summarized financial information for these unconsolidated entities was as follows:  

December 31, 

    

2019

    

2018

(in millions)

Total assets

$

158,439.7

$

135,355.6

Total liabilities

88,455.8

 

80,265.4

Total equity

$

69,983.9

$

55,090.2

Net investment in unconsolidated entities (1)

$

1,825.5

$

1,723.7

For the year ended

December 31, 

    

2019

    

2018

    

2017

(in millions)

Total revenues

$

17,802.2

$

15,389.4

$

15,020.9

Net income

7,938.3

 

6,542.1

 

4,530.1

Our share of net income of unconsolidated entities (1)

222.5

 

161.6

 

232.7

(1)Our most significant equity investee is Brasilprev Seguros e Previdencia, a co-managed joint venture in Brazil.

In addition, other investments include $782.9 million and $830.7 million of direct financing leases as of December 31, 2019 and 2018, respectively. Our Chilean operations enter into private placement contracts for commercial, industrial and office space properties whereby our Chilean operations purchase the real estate and/or building from the seller-lessee but then lease the property back to the seller-lessee. Ownership of the property is transferred to the lessee by the end of the lease term. The direct financing lease receivables are carried at amortized cost. We actively monitor and manage our direct financing leases. All leases within the portfolio are analyzed regularly and internally rated, based on financial condition, payment history and loan-to-value.

Furthermore, other investments include $734.1 million and $502.6 million of cash surrender value of company owned life insurance as of December 31, 2019 and 2018, respectively.

Derivative assets are carried at fair value and reported as a component of other investments. See Note 5, Derivative Financial Instruments, for further details. Certain sponsored investment funds are also carried at fair value and reported as a component of other investments, with changes in fair value included in net realized capital gains (losses) on our consolidated statements of operations. The fair value of these funds was $678.7 million and $719.7 million as of December 31, 2019 and 2018, respectively.

4. Investments (continued)

Securities Posted as Collateral

As of December 31, 2019 and 2018, we posted $4,062.0 million and $3,761.3 million, respectively, in commercial mortgage loans and residential first lien mortgages to satisfy collateral requirements associated with our obligation under funding agreements with Federal Home Loan Bank of Des Moines (“FHLB Des Moines”). In addition, as of December 31, 2019 and 2018, we posted $2,749.4 million and $2,402.5 million, respectively, in fixed maturities, available-for-sale and trading securities to satisfy collateral requirements primarily associated with a reinsurance arrangement, our derivative credit support annex (collateral) agreements, Futures Commission Merchant (“FCM”) agreements, a lending arrangement and our obligation under funding agreements with FHLB Des Moines. Since we did not relinquish ownership rights on these instruments, they are reported as mortgage loans, fixed maturities, available-for-sale and fixed maturities, trading, respectively, on our consolidated statements of financial position. Of the securities posted as collateral, as of December 31, 2019 and 2018, $163.9 million and $124.2 million, respectively, could be sold or repledged by the secured party.

Balance Sheet Offsetting

Financial assets subject to master netting agreements or similar agreements were as follows:

Gross amounts not offset in the

consolidated statements

of financial position

 

Gross amount

 

    

    

 

    

of recognized

Financial

Collateral

    

assets (1)

    

instruments (2)

    

received

    

Net amount

   

(in millions)

December 31, 2019

Derivative assets

$

288.7

$

(88.4)

$

(197.6)

$

2.7

Reverse repurchase agreements

 

23.6

 

 

(23.6)

 

Total

$

312.3

$

(88.4)

$

(221.2)

$

2.7

December 31, 2018

Derivative assets

$

186.3

$

(70.5)

$

(108.1)

$

7.7

Reverse repurchase agreements

 

53.0

 

 

(53.0)

 

Total

$

239.3

$

(70.5)

$

(161.1)

$

7.7

(1)The gross amount of recognized derivative and reverse repurchase agreement assets are reported with other investments and cash and cash equivalents, respectively, on the consolidated statements of financial position. The above excludes $6.0 million and $7.7 million of derivative assets as of December 31, 2019 and December 31, 2018, respectively, that are not subject to master netting agreements or similar agreements. The gross amounts of derivative and reverse repurchase agreement assets are not netted against offsetting liabilities for presentation on the consolidated statements of financial position.
(2)Represents amount of offsetting derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets for presentation on the consolidated statements of financial position.

4. Investments (continued)

Financial liabilities subject to master netting agreements or similar agreements were as follows:

Gross amounts not offset in the

consolidated statements

of financial position

    

Gross amount

    

 

    

    

of recognized

Financial

Collateral

    

liabilities (1)

    

instruments (2)

    

pledged

    

Net amount

  

(in millions)

December 31, 2019

Derivative liabilities

$

216.0

$

(88.4)

$

(118.3)

$

9.3

December 31, 2018

Derivative liabilities

$

153.4

$

(70.5)

$

(52.3)

$

30.6

(1)The gross amount of recognized derivative liabilities is reported with other liabilities on the consolidated statements of financial position. The above excludes $314.5 million and $138.3 million of derivative liabilities as of December 31, 2019 and December 31, 2018, respectively, which are primarily embedded derivatives that are not subject to master netting agreements or similar agreements. The gross amounts of derivative liabilities are not netted against offsetting assets for presentation on the consolidated statements of financial position.
(2)Represents amount of offsetting derivative assets that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative liabilities for presentation on the consolidated statements of financial position.

The financial instruments that are subject to master netting agreements or similar agreements include right of setoff provisions. Derivative instruments include provisions to setoff positions covered under the agreements with the same counterparties and provisions to setoff positions outside of the agreements with the same counterparties in the event of default by one of the parties. Derivative instruments also include collateral or variation margin provisions, which are generally settled daily with each counterparty. See Note 5, Derivative Financial Instruments, for further details.

Repurchase and reverse repurchase agreements include provisions to setoff other repurchase and reverse repurchase balances with the same counterparty. Repurchase and reverse repurchase agreements also include collateral provisions with the counterparties. For reverse repurchase agreements we require the counterparties to pledge collateral with a value greater than the amount of cash transferred. We have the right but do not sell or repledge collateral received in reverse repurchase agreements. Repurchase agreements are structured as secured borrowings for all counterparties. We pledge fixed maturities available-for-sale, which the counterparties have the right to sell or repledge. Interest incurred on repurchase agreements is reported as part of operating expenses on the consolidated statements of operations. Net proceeds related to repurchase agreements are reported as a component of financing activities on the consolidated statements of cash flows. We did not have any outstanding repurchase agreements as of December 31, 2019 and December 31, 2018.

v3.19.3.a.u2
Derivative Financial Instruments
12 Months Ended
Dec. 31, 2019
Derivative Financial Instruments  
Derivative Financial Instruments

5. Derivative Financial Instruments

Derivatives are generally used to hedge or reduce exposure to market risks associated with assets held or expected to be purchased or sold and liabilities incurred or expected to be incurred. Derivatives are used to change the characteristics of our asset/liability mix consistent with our risk management activities. Derivatives are also used in asset replication strategies.

Types of Derivative Instruments

Interest Rate Contracts

Interest rate risk is the risk we will incur economic losses due to adverse changes in interest rates. Sources of interest rate risk include the difference between the maturity and interest rate changes of assets with the liabilities they support, timing differences between the pricing of liabilities and the purchase or procurement of assets and changing cash flow profiles from original projections due to prepayment options embedded within asset and liability contracts. We use various derivatives to manage our exposure to fluctuations in interest rates.

5. Derivative Financial Instruments (continued)

Interest rate swaps are contracts in which we agree with other parties to exchange, at specified intervals, the difference between fixed rate and/or floating rate interest amounts based upon designated market rates or rate indices and an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by any party. Cash is paid or received based on the terms of the swap. We use interest rate swaps primarily to more closely match the interest rate characteristics of assets and liabilities and to mitigate the risks arising from timing mismatches between assets and liabilities (including duration mismatches). We also use interest rate swaps to hedge against changes in the value of assets we anticipate acquiring and other anticipated transactions and commitments. Interest rate swaps are used to hedge against changes in the value of the guaranteed minimum withdrawal benefit (“GMWB”) liability. The GMWB rider on our variable annuity products provides for guaranteed minimum withdrawal benefits regardless of the actual performance of various equity and/or fixed income funds available with the product.

Interest rate options, including interest rate caps and interest rate floors, which can be combined to form interest rate collars, are contracts that entitle the purchaser to pay or receive the amounts, if any, by which a specified market rate exceeds a cap strike interest rate, or falls below a floor strike interest rate, respectively, at specified dates. We use interest rate options to manage prepayment risks in our assets and minimum guaranteed interest rates and lapse risks in our liabilities.

A swaption is an option to enter into an interest rate swap at a future date. We purchase  swaptions to hedge interest rate exposure for certain assets and liabilities. Swaptions not only hedge against the downside risk, but also allow us to take advantage of any upside benefits.

In exchange-traded futures transactions, we agree to purchase or sell a specified number of contracts, the values of which are determined by the values of designated classes of securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. We enter into exchange-traded futures with regulated futures commissions merchants who are members of a trading exchange. We have used exchange-traded futures to reduce market risks from changes in interest rates and to alter mismatches between the assets in a portfolio and the liabilities supported by those assets.

Foreign Exchange Contracts

Foreign currency risk is the risk we will incur economic losses due to adverse fluctuations in foreign currency exchange rates. This risk arises from foreign currency-denominated funding agreements issued to nonqualified institutional investors in the international market, foreign currency-denominated fixed maturity and equity securities, and our international operations, including expected cash flows and potential acquisition and divestiture activity. We use various derivatives to manage our exposure to fluctuations in foreign currency exchange rates.

Currency swaps are contracts in which we agree with other parties to exchange, at specified intervals, a series of principal and interest payments in one currency for that of another currency. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. The interest payments are primarily fixed-to-fixed rate; however, they may also be fixed-to-floating rate or floating-to-fixed rate. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date. We use currency swaps to reduce market risks from changes in currency exchange rates with respect to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell.

Currency forwards are contracts in which we agree with other parties to deliver or receive a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. We use currency forwards to reduce market risks from changes in currency exchange rates with respect to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell. We sometimes use currency forwards to hedge the currency risk associated with a business combination or to hedge certain net equity investments in or expected cash flows from our foreign operations.

5. Derivative Financial Instruments (continued)

Currency options are contracts that give the holder the right, but not the obligation to buy or sell a specified amount of the identified currency within a limited period of time at a contracted price. The contracts are net settled in cash, based on the differential in the current foreign exchange rate and the strike price. Purchased and sold options can be combined to form a foreign currency collar where we receive a payment if the foreign exchange rate is below the purchased option strike price and make a payment if the foreign exchange rate is above the sold option strike price. We use currency options to hedge expected cash flows from our foreign operations.

Equity Contracts

Equity risk is the risk that we will incur economic losses due to adverse fluctuations in common stock prices. We use various derivatives to manage our exposure to equity risk, which arises from products in which the interest we credit is tied to an external equity index as well as products subject to minimum contractual guarantees.

We purchase equity call spreads (“option collars”) to hedge the equity participation rates promised to contractholders in conjunction with our fixed deferred annuity and universal life products that credit interest based on changes in an external equity index. We use exchange-traded futures and equity put options to hedge against changes in the value of the GMWB liability related to the GMWB rider on our variable annuity product. The premium associated with certain options is paid quarterly over the life of the option contract.

Credit Contracts

Credit risk relates to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and interest. We use credit default swaps to enhance the return on our investment portfolio by providing comparable exposure to fixed income securities that might not be available in the primary market. They are also used to hedge credit exposures in our investment portfolio. Credit derivatives are used to sell or buy credit protection on an identified name or names on an unfunded or synthetic basis in return for receiving or paying a quarterly premium. The premium generally corresponds to a referenced name’s credit spread at the time the agreement is executed. In cases where we sell protection, we also buy a quality cash bond to match against the credit default swap, thereby entering into a synthetic transaction replicating a cash security. When selling protection, if there is an event of default by the referenced name, as defined by the agreement, we are obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced security in a principal amount equal to the notional value of the credit default swap.

Other Contracts

Embedded Derivatives. We purchase or issue certain financial instruments or products that contain a derivative instrument that is embedded in the financial instrument or product. When it is determined that the embedded derivative possesses economic characteristics that are not clearly or closely related to the economic characteristics of the host contract and a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host instrument for measurement purposes. The embedded derivative, which is reported with the host instrument in the consolidated statements of financial position, is carried at fair value.

We offer group annuity contracts that have guaranteed separate accounts as an investment option. We also offer funds with embedded fixed-rate guarantees as investment options in our defined contribution plans in Hong Kong.

We have structured investment relationships with trusts we have determined to be VIEs, which are consolidated in our financial statements. The notes issued by these trusts include obligations to deliver an underlying security to residual interest holders and the obligations contain an embedded derivative of the forecasted transaction to deliver the underlying security.

We have fixed deferred annuities and universal life products that credit interest based on changes in an external equity index. We also have certain variable annuity products with a GMWB rider, which allows the customer to make withdrawals of a specified annual amount, either for a fixed number of years or for the lifetime of the customer, even if the account value is fully exhausted. Declines in the equity markets may increase our exposure to benefits under contracts with the GMWB. We economically hedge the exposure in these contracts, as previously explained.

5. Derivative Financial Instruments (continued)

Exposure

Our risk of loss is typically limited to the fair value of our derivative instruments and not to the notional or contractual amounts of these derivatives. We are also exposed to credit losses in the event of nonperformance of the counterparties. Our current credit exposure is limited to the value of derivatives that have become favorable to us. This credit risk is minimized by purchasing such agreements from financial institutions with high credit ratings and by establishing and monitoring exposure limits. We also utilize various credit enhancements, including collateral and credit triggers to reduce the credit exposure to our derivative instruments.

Derivatives may be exchange-traded or they may be privately negotiated contracts, which are usually referred to as over-the-counter (“OTC”) derivatives. Certain of our OTC derivatives are cleared and settled through central clearing counterparties (“OTC cleared”), while others are bilateral contracts between two counterparties (“bilateral OTC”). Our derivative transactions are generally documented under International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements. Management believes that such agreements provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Under such agreements, in connection with an early termination of a transaction, we are permitted to set off our receivable from a counterparty against our payables to the same counterparty arising out of all included transactions. For reporting purposes, we do not offset fair value amounts of bilateral OTC derivatives for the right to reclaim cash collateral or the obligation to return cash collateral against fair value amounts recognized for derivative instruments executed with the same counterparties under master netting agreements. OTC cleared derivatives have variation margin that is legally characterized as settlement of the derivative exposure, which reduces their fair value in the consolidated statements of financial position.

We posted $271.6 million and $106.6 million in cash and securities under collateral arrangements as of December 31, 2019 and December 31, 2018, respectively, to satisfy collateral and initial margin requirements associated with our derivative credit support agreements and FCM agreements.

Certain of our derivative instruments contain provisions that require us to maintain an investment grade rating from each of the major credit rating agencies on our debt. If the ratings on our debt were to fall below investment grade, it would be in violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value, inclusive of accrued interest, of all derivative instruments with credit-risk-related contingent features that were in a liability position without regard to netting under derivative credit support annex agreements as of December 31, 2019 and December 31, 2018, was $164.7 million and $109.7 million, respectively. Cleared derivatives have contingent features that require us to post excess margin as required by the FCM. The terms surrounding excess margin vary by FCM agreement. With respect to derivatives containing collateral triggers, we posted collateral and initial margin of $271.6 million and $106.6 million as of December 31, 2019 and December 31, 2018, respectively, in the normal course of business, which reflects netting under derivative agreements. If the credit-risk-related contingent features underlying these agreements were triggered on December 31, 2019, we would be required to post an additional $42.6 million of collateral to our counterparties.

As of December 31, 2019 and December 31, 2018, we had received $156.8 million and $79.5 million, respectively, of cash collateral associated with our derivative credit support annex agreements and FCM agreements, for which we recorded a corresponding liability reflecting our obligation to return the collateral.

5. Derivative Financial Instruments (continued)

Notional amounts are used to express the extent of our involvement in derivative transactions and represent a standard measurement of the volume of our derivative activity. Notional amounts represent those amounts used to calculate contractual flows to be exchanged and are not paid or received, except for contracts such as currency swaps. Credit exposure represents the gross amount owed to us under derivative contracts as of the valuation date. The notional amounts and credit exposure of our derivative financial instruments by type were as follows:

    

December 31, 2019

    

December 31, 2018

(in millions)

Notional amounts of derivative instruments

Interest rate contracts:

Interest rate swaps

$

35,173.6

$

34,393.7

Interest rate options

1,416.9

 

1,126.9

Interest rate futures

142.5

 

260.0

Swaptions

62.0

 

Foreign exchange contracts:

Currency forwards

1,262.6

 

863.6

Currency swaps

1,027.2

 

898.6

Currency options

53.8

525.2

Equity contracts:

Equity options

1,672.8

 

1,522.5

Equity futures

149.5

 

491.7

Credit contracts:

Credit default swaps

165.0

 

420.0

Other contracts:

Embedded derivatives

9,742.3

 

9,452.3

Total notional amounts at end of period

$

50,868.2

$

49,954.5

Credit exposure of derivative instruments

Interest rate contracts:

Interest rate swaps

$

181.9

$

95.4

Interest rate options

28.3

 

16.3

Foreign exchange contracts:

Currency swaps

55.4

 

71.2

Currency forwards

4.9

 

2.8

Currency options

0.1

1.9

Equity contracts:

Equity options

30.5

 

7.7

Credit contracts:

Credit default swaps

0.5

 

2.4

Total gross credit exposure

301.6

 

197.7

Less: collateral received

208.3

 

122.9

Net credit exposure

$

93.3

$

74.8

5. Derivative Financial Instruments – (continued)

The fair value of our derivative instruments classified as assets and liabilities was as follows:

Derivative assets (1)

Derivative liabilities (2)

    

December 31, 2019

    

December 31, 2018

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Derivatives designated as hedging instruments

Interest rate contracts

$

$

$

21.3

$

16.1

Foreign exchange contracts

30.0

 

37.6

15.2

 

13.5

Total derivatives designated as hedging instruments

$

30.0

$

37.6

$

36.5

$

29.6

Derivatives not designated as hedging instruments

Interest rate contracts

$

204.2

$

108.0

$

16.7

$

22.6

Foreign exchange contracts

29.5

 

38.4

100.2

 

72.9

Equity contracts

30.5

 

7.7

63.1

 

27.6

Credit contracts

0.5

 

2.3

1.2

 

4.4

Other contracts

 

312.8

 

134.6

Total derivatives not designated as hedging instruments

264.7

 

156.4

494.0

 

262.1

Total derivative instruments

$

294.7

$

194.0

$

530.5

$

291.7

(1)The fair value of derivative assets is reported with other investments on the consolidated statements of financial position.
(2)The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivatives with a net liability fair value of $214.2 million and $45.2 million as of December 31, 2019 and December 31, 2018, respectively, are reported with contractholder funds on the consolidated statements of financial position.

Credit Derivatives Sold

When we sell credit protection, we are exposed to the underlying credit risk similar to purchasing a fixed maturity security instrument. Our credit derivative contracts sold reference a single name or reference security (referred to as “single name credit default swaps”). These instruments are either referenced in an OTC credit derivative transaction or embedded within an investment structure that has been fully consolidated into our financial statements.

These credit derivative transactions are subject to events of default defined within the terms of the contract, which normally consist of bankruptcy, failure to pay, or modified restructuring of the reference entity and/or issue. If a default event occurs for a reference name or security, we are obligated to pay the counterparty an amount equal to the notional amount of the credit derivative transaction. As a result, our maximum future payment is equal to the notional amount of the credit derivative. In certain cases, we also may have purchased credit protection with identical underlyings to certain of our sold protection transactions. As of December 31, 2019 and December 31, 2018, we did not purchase credit protection relating to our sold protection transactions. In certain circumstances, our potential loss could also be reduced by any amount recovered in the default proceedings of the underlying credit name.

5. Derivative Financial Instruments – (continued)

The following tables show our credit default swap protection sold by types of contract, types of referenced/underlying asset class and external agency rating for the underlying reference security. The maximum future payments are undiscounted and have not been reduced by the effect of any offsetting transactions, collateral or recourse features described above.

 

December 31, 2019

 

    

  

    

 

    

Weighted

Maximum

average

Notional

Fair

future

expected life

    

amount

    

value

    

payments

    

(in years)

(in millions)

Single name credit default swaps

Corporate debt

A

$

5.0

$

$

5.0

 

0.5

BBB

 

70.0

 

0.2

 

70.0

 

2.6

Sovereign

BBB

15.0

0.3

15.0

2.0

Total credit default swap protection sold

$

90.0

$

0.5

$

90.0

 

2.4

December 31, 2018

 

 

Weighted

Maximum

average

Notional

Fair

future

expected life

    

amount

    

value

    

payments

    

(in years)

(in millions)

Single name credit default swaps

Corporate debt

AAA

$

10.0

$

0.1

$

10.0

 

0.7

A

 

15.0

 

0.1

 

15.0

 

1.0

BBB

 

190.0

 

0.4

 

190.0

 

1.7

BB

 

10.0

 

 

10.0

 

0.5

CCC

15.0

(3.6)

15.0

0.9

Government/municipalities

AA

20.0

0.2

20.0

1.0

Sovereign

A

10.0

0.1

10.0

0.7

BBB

55.0

0.4

55.0

1.3

Total credit default swap protection sold

$

325.0

$

(2.3)

$

325.0

 

1.4

Fair Value and Cash Flow Hedges

Fair Value Hedges

We use fixed-to-floating rate interest rate swaps to more closely align the interest rate characteristics of certain assets and have used them to align the interest rate characteristics of certain liabilities. In general, these swaps are used in asset and liability management to modify duration, which is a measure of sensitivity to interest rate changes.

The net interest effect of interest rate swap transactions for derivatives in fair value hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations.

5. Derivative Financial Instruments – (continued)

The following amounts were recorded on the consolidated statements of financial position related to cumulative basis adjustments for fair value hedges. The amortized cost includes the amortized cost basis and the fair value hedging basis adjustment.

Cumulative amount of fair

value hedging basis adjustment

Line item in the consolidated statements

included in the amortized cost

of financial position in which the

Amortized cost of hedged item

of the hedged item

hedged item is included

    

December 31, 2019

    

December 31, 2018

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Fixed maturities, available-for-sale:

Active hedging relationships

$

142.0

$

137.0

$

18.1

$

12.4

Discontinued hedging relationships

159.3

298.9

7.7

13.3

Total fixed maturities, available-for-sale in active or discontinued hedging relationships

$

301.3

$

435.9

$

25.8

$

25.7

Cash Flow Hedges

We utilized floating-to-fixed rate interest rate swaps to eliminate the variability in cash flows of recognized financial assets and liabilities and forecasted transactions.

We enter into currency exchange swap agreements to convert both principal and interest payments of certain foreign denominated assets and liabilities into U.S. dollar denominated fixed-rate instruments to eliminate the exposure to future currency volatility on those items.

The net interest effect of interest rate swap and currency swap transactions for derivatives in cash flow hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations.

The maximum length of time we are hedging our exposure to the variability in future cash flows for forecasted transactions, excluding those related to the payments of variable interest on existing financial assets and liabilities, is 0.5 years. As of December 31, 2019, we had $0.0 million of net gains reported in AOCI on the consolidated statements of financial position related to active hedges of forecasted transactions. If a hedged forecasted transaction is no longer probable of occurring, cash flow hedge accounting is discontinued. If it is probable that the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income.

The following table shows the effect of derivatives in cash flow hedging relationships on the consolidated statements of financial position.

Amount of gain (loss) recognized in AOCI on derivatives

Derivatives in cash flow

for the year ended December 31,

hedging relationships

     

Related hedged item

     

2019

     

2018

     

2017

   

(in millions)

Interest rate contracts

Fixed maturities, available-for-sale

$

(9.9)

$

36.7

$

(51.7)

Foreign exchange contracts

Fixed maturities, available-for-sale

(9.4)

 

20.8

 

(68.5)

Foreign exchange contracts

Investment contracts

 

(0.1)

 

Total

$

(19.3)

$

57.4

$

(120.2)

We expect to reclassify net gains of $24.3 million from AOCI into net income in the next 12 months, which includes both net deferred gains on discontinued hedges and net losses on periodic settlements of active hedges. Actual amounts may vary from this amount as a result of market conditions.

5. Derivative Financial Instruments – (continued)

Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations

The following tables show the effect of derivatives in fair value and cash flow hedging relationships and the related hedged items on the consolidated statements of operations.

For the year ended December 31, 2019

 

Benefits,

 

Net investment

Net realized

claims and

 

income related

capital gains

settlement

 

to hedges

(losses) related to

expenses

 

of fixed

hedges of fixed

related to

Operating

 

maturities,

maturities,

hedges of

expenses

 

available-

available-

investment

related to

 

    

for-sale

    

for-sale

    

contracts

    

hedges of debt

  

(in millions)

 

Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported

$

3,998.4

$

(52.8)

$

9,905.8

$

4,503.9

 

  

 

  

Losses on fair value hedging relationships:

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

Gain recognized on hedged item

$

5.7

$

$

$

Loss recognized on derivatives

 

(6.0)

 

 

 

Amortization of hedged item basis adjustments

 

(4.2)

 

 

 

Amounts related to periodic settlements on derivatives

 

(3.4)

 

 

 

Total loss recognized for fair value hedging relationships

$

(7.9)

$

$

$

Gains (losses) on cash flow hedging relationships:

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

Gain (loss) reclassified from AOCI on derivatives

$

19.8

$

(0.6)

$

(0.1)

$

(4.8)

Gain reclassified from AOCI into net income as a result that a forecasted transaction is no longer probable of occurring

 

 

0.1

 

 

Foreign exchange contracts:

 

  

 

  

 

  

Gain reclassified from AOCI on derivatives

 

 

9.5

 

 

Amounts related to periodic settlements on derivatives

 

7.4

 

 

 

Total gain (loss) recognized for cash flow hedging relationships

$

27.2

$

9.0

$

(0.1)

$

(4.8)

5. Derivative Financial Instruments – (continued)

For the year ended December 31, 2018

 

Benefits,

 

Net investment

Net realized

claims and

 

income related

capital gains

settlement

 

to hedges

(losses) related to

expenses

 

of fixed

hedges of fixed

related to

Operating

 

maturities,

maturities,

hedges of

expenses

 

available-

available-

investment

related to

 

    

for-sale

    

for-sale

    

contracts

    

hedges of debt

  

(in millions)

 

Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported

$

3,629.2

$

(75.4)

$

8,192.5

$

4,136.7

 

  

 

  

Losses on fair value hedging relationships:

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

Loss recognized on hedged item

$

$

(6.6)

$

$

Gain recognized on derivatives

 

 

6.2

 

 

Amortization of hedged item basis adjustments

 

(6.7)

 

 

 

Amounts related to periodic settlements on derivatives

 

(5.9)

 

 

 

Total loss recognized for fair value hedging relationships

$

(12.6)

$

(0.4)

$

$

Gains (losses) on cash flow hedging relationships:

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

Gain (loss) reclassified from AOCI on derivatives

$

20.9

$

17.0

$

(0.1)

$

(10.7)

Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring

 

 

0.3

 

 

Foreign exchange contracts:

 

  

 

  

 

  

Gain reclassified from AOCI on derivatives

 

 

12.7

 

 

Amounts related to periodic settlements on derivatives

 

6.0

 

 

(0.1)

 

Total gain (loss) recognized for cash flow hedging relationships

$

26.9

$

30.0

$

(0.2)

$

(10.7)

5. Derivative Financial Instruments – (continued)

For the year ended December 31, 2017

 

Net

 

investment

Benefits,

 

income

Net realized capital gains (losses)

claims and

 

related

Related to

settlement

 

to hedges

hedges

expenses

Operating

 

of fixed

fixed

Related to

related to

expenses

 

maturities,

maturities,

hedges of

hedges of

related to

 

available-

available-

investment

investment

hedges

 

    

for-sale

    

for-sale

    

contracts

    

Total

    

contracts

    

of debt

  

(in millions)

 

Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported

$

3,459.3

$

524.2

$

7,822.6

$

3,893.8

Gains (losses) on fair value hedging relationships:

 

  

 

  

 

  

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

 

  

 

  

 

  

Gain (loss) recognized on hedged item

$

$

(5.2)

$

0.6

$

(4.6)

$

$

Gain (loss) recognized on derivatives

 

 

4.7

 

(0.6)

 

4.1

 

 

Amortization of hedged item basis adjustments

 

(11.6)

 

 

 

 

(0.5)

 

Amounts related to periodic settlements on derivatives

 

(10.3)

 

 

 

 

0.9

 

Total gain (loss) recognized for fair value hedging relationships

$

(21.9)

$

(0.5)

$

$

(0.5)

$

0.4

$

Gains (losses) on cash flow hedging relationships:

 

  

 

  

 

  

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

 

  

 

  

 

  

Gain (loss) reclassified from AOCI on derivatives

$

21.0

$

(0.6)

$

$

(0.6)

$

$

(10.8)

Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring

 

 

0.2

 

 

0.2

 

 

Foreign exchange contracts:

 

  

 

  

 

  

 

  

 

  

 

  

Gain reclassified from AOCI on derivatives

 

 

22.0

 

 

22.0

 

 

Amounts related to periodic settlements on derivatives

 

7.1

 

 

 

 

(1.1)

 

Total gain (loss) recognized for cash flow hedging relationships

$

28.1

$

21.6

$

$

21.6

$

(1.1)

$

(10.8)

Derivatives Not Designated as Hedging Instruments

Our use of futures, certain swaptions and swaps, option collars, options and forwards are effective from an economic standpoint, but they have not been designated as hedges for financial reporting purposes. As such, periodic changes in the market value of these instruments, which includes mark-to-market gains and losses as well as periodic and final settlements, primarily flow directly into net realized capital gains (losses) on the consolidated statements of operations.

The following table shows the effect of derivatives not designated as hedging instruments, including fair value changes of embedded derivatives that have been bifurcated from the host contract, on the consolidated statements of operations.

Amount of gain (loss) recognized in

net income on derivatives for the

year ended December 31, 

Derivatives not designated as hedging instruments

     

2019

     

2018

     

2017

  

(in millions)

Interest rate contracts

$

218.0

$

(27.6)

$

(26.9)

Foreign exchange contracts

(58.6)

 

(64.2)

 

59.4

Equity contracts

(132.9)

 

(31.0)

 

(181.3)

Credit contracts

(3.6)

 

(1.6)

 

(15.9)

Other contracts

(168.1)

 

108.5

 

11.5

Total

$

(145.2)

$

(15.9)

$

(153.2)

v3.19.3.a.u2
Closed Block
12 Months Ended
Dec. 31, 2019
Closed Block  
Closed Block

6. Closed Block

In connection with the 1998 MIHC formation, Principal Life formed a Closed Block to provide reasonable assurance to policyholders included therein that, after the formation of the MIHC, assets would be available to maintain dividends in aggregate in accordance with the 1997 policy dividend scales, if the experience underlying such scales continued. Assets of Principal Life were allocated to the Closed Block in an amount that produces cash flows which, together with anticipated revenue from policies and contracts included in the Closed Block, were expected to be sufficient to support the Closed Block policies. This includes, but is not limited to, provisions for payment of claims, certain expenses, charges and taxes, and to provide for continuation of policy and contract dividends in aggregate in accordance with the 1997 dividend scales, if the experience underlying such scales continues, and to allow for appropriate adjustments in such scales, if such experience changes. Due to adjustable life policies being included in the Closed Block, the Closed Block is charged with amounts necessary to properly fund for certain adjustments, such as face amount and premium increases, that are made to these policies after the Closed Block inception date. These amounts are referred to as Funding Adjustment Charges and are treated as capital transfers from the Closed Block.

Assets allocated to the Closed Block inure solely to the benefit of the holders of policies included in the Closed Block. Closed Block assets and liabilities are carried on the same basis as other similar assets and liabilities. Principal Life will continue to pay guaranteed benefits under all policies, including the policies within the Closed Block, in accordance with their terms. If the assets allocated to the Closed Block, the investment cash flows from those assets and the revenues from the policies included in the Closed Block, including investment income thereon, prove to be insufficient to pay the benefits guaranteed under the policies included in the Closed Block, Principal Life will be required to make such payments from its general funds. No additional policies were added to the Closed Block, nor was the Closed Block affected in any other way, as a result of the demutualization.

A policyholder dividend obligation (“PDO”) is required to be established for higher than expected earnings in the Closed Block that will need to be paid as dividends unless future performance of the Closed Block is less favorable than originally expected. A model of the Closed Block was established to produce the pattern of expected earnings, assets and liabilities in the Closed Block. These projections are utilized to determine ratios that will allow us to compare actual cumulative earnings to expected cumulative earnings and determine the amount of the PDO. As of December 31, 2019 and 2018, the PDO was $202.7 million and $36.6 million, respectively.

6.  Closed Block – (continued)

Closed Block liabilities and assets designated to the Closed Block were as follows:

     

December 31, 2019

     

December 31, 2018

  

(in millions)

 

Closed Block liabilities

Future policy benefits and claims

$

3,563.1

$

3,732.5

Other policyholder funds

6.6

 

6.5

Policyholder dividends payable

199.1

 

211.3

Policyholder dividends obligation

202.7

 

36.6

Other liabilities

7.8

 

9.5

Total Closed Block liabilities

3,979.3

 

3,996.4

Assets designated to the Closed Block

Fixed maturities, available-for-sale

2,269.6

 

2,176.4

Fixed maturities, trading

2.6

 

2.5

Equity securities

1.1

 

1.0

Mortgage loans

622.8

 

678.5

Policy loans

486.0

 

510.5

Other investments

46.4

 

33.8

Total investments

3,428.5

 

3,402.7

Cash and cash equivalents

47.5

 

42.1

Accrued investment income

38.1

 

39.5

Premiums due and other receivables

9.7

 

10.0

Deferred tax asset

29.5

 

30.5

Total assets designated to the Closed Block

3,553.3

 

3,524.8

Excess of Closed Block liabilities over assets designated to the Closed Block

426.0

 

471.6

Amounts included in accumulated other comprehensive income

0.9

 

5.2

Maximum future earnings to be recognized from Closed Block assets and liabilities

$

426.9

$

476.8

Closed Block revenues and expenses were as follows:

For the year ended December 31, 

     

2019

     

2018

     

2017

  

(in millions)

Revenues

Premiums and other considerations

$

227.6

$

244.2

$

275.6

Net investment income

154.4

 

160.5

 

169.4

Net realized capital gains (losses)

7.4

 

(3.4)

 

(5.8)

Total revenues

389.4

 

401.3

 

439.2

Expenses

Benefits, claims and settlement expenses

204.4

 

211.5

 

245.6

Dividends to policyholders

116.3

 

120.9

 

122.0

Operating expenses

2.9

 

3.3

 

3.5

Total expenses

323.6

 

335.7

 

371.1

Closed Block revenues, net of Closed Block expenses, before income taxes

65.8

 

65.6

 

68.1

Income taxes

12.9

 

11.1

 

46.0

Closed Block revenues, net of Closed Block expenses and income taxes

52.9

 

54.5

 

22.1

Funding adjustments

(3.0)

 

(0.5)

 

(4.4)

Closed Block revenues, net of Closed Block expenses, income taxes and funding adjustments

$

49.9

$

54.0

$

17.7

6. Closed Block – (continued)

The change in maximum future earnings of the Closed Block was as follows:

For the year ended December 31, 

     

2019

     

2018

     

2017

  

(in millions)

Beginning of year

$

476.8

$

532.1

$

549.8

Effects of implementation of accounting changes (1)

1.3

End of year

426.9

 

476.8

 

532.1

Change in maximum future earnings

$

(49.9)

$

(54.0)

$

(17.7)

(1)Includes the effects of implementation of accounting changes related to equity investments and the reclassification of certain tax effects.

Principal Life charges the Closed Block with U.S. federal income taxes, payroll taxes, state and local premium taxes and other state or local taxes, licenses and fees as provided in the plan of reorganization.

v3.19.3.a.u2
Deferred Acquisition Costs
12 Months Ended
Dec. 31, 2019
Deferred Acquisition Costs  
Deferred Acquisition Costs

7. Deferred Acquisition Costs

Acquisition costs deferred and amortized were as follows:

For the year ended December 31, 

     

2019

     

2018

     

2017

  

(in millions)

Balance at beginning of year

$

3,693.5

$

3,540.7

$

3,380.2

Costs deferred during the year

473.5

 

414.9

 

421.8

Amortized to expense during the year (1)

(347.0)

 

(253.5)

 

(234.6)

Adjustment related to unrealized (gains) losses on available-for-sale securities and derivative instruments

(298.7)

 

184.9

 

(26.7)

Other (2)

(193.5)

Balance at end of year

$

3,521.3

$

3,693.5

$

3,540.7

(1)Includes adjustments for revisions to EGPs.
(2)Reflects the impact of capitalized costs written off or transferred from DAC to a contract cost asset as a result of adopting revenue recognition guidance in 2018. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Recent Accounting Pronouncements” for further details.
v3.19.3.a.u2
Insurance Liabilities
12 Months Ended
Dec. 31, 2019
Insurance Liabilities  
Insurance Liabilities

8. Insurance Liabilities

Contractholder Funds

Major components of contractholder funds in the consolidated statements of financial position were as follows:

December 31, 

 

    

2019

    

2018

  

(in millions)

 

Liabilities for investment contracts:

Liabilities for individual annuities

$

13,457.5

$

12,913.9

GICs

10,423.5

 

10,321.7

Funding agreements

8,640.6

 

7,729.5

Other investment contracts

1,596.7

 

1,652.2

Total liabilities for investment contracts

34,118.3

 

32,617.3

Universal life and other reserves

7,249.2

 

7,082.4

Total contractholder funds

$

41,367.5

$

39,699.7

8.  Insurance Liabilities – (continued)

Our GICs and funding agreements contain provisions limiting or prohibiting early surrenders, which typically include penalties for early surrenders, minimum notice requirements or, in the case of funding agreements with survivor options, minimum pre-death holding periods and specific maximum amounts.

Funding agreements include those issued directly to nonqualified institutional investors and those issued to the FHLB Des Moines under their membership funding programs. As of December 31, 2019 and 2018, $4,010.9 million and $3,512.2 million, respectively, of liabilities were outstanding with respect to issuances under the program with FHLB Des Moines. In addition, we have five separate  programs where the funding agreements have been issued directly or indirectly to unconsolidated special purpose entities. Claims for principal and interest under funding agreements are afforded equal priority to claims of life insurance and annuity policyholders under insolvency provisions of Iowa Insurance Laws.

Principal Life was authorized to issue up to $4.0 billion of funding agreements under a program established in 1998 to support the prospective issuance of medium term notes by an unaffiliated entity in non-U.S. markets. As of December 31, 2019 and 2018, $75.2 million and $109.6 million, respectively, of liabilities were outstanding with respect to the issuance outstanding under this program. Principal Life was also authorized to issue up to Euro 4.0 billion (approximately USD$5.3 billion) of funding agreements under a program established in 2006 to support the prospective issuance of medium term notes by an unaffiliated entity in non-U.S. markets. The unaffiliated entity is an unconsolidated special purpose entity. As of December 31, 2019 and 2018, $112.2 million and $114.4 million, respectively, of liabilities were outstanding with respect to issuances outstanding under this program. Principal Life does not anticipate any new issuance activity under either of these programs due to the existence of the program established in 2011 described below.

In addition, Principal Life was authorized to issue up to $7.0 billion of funding agreements under a program established in 2001 to support the prospective issuance of medium term notes by an unaffiliated entity in both domestic and international markets. The unaffiliated entity is an unconsolidated special purpose entity. As of December 31, 2019 and 2018, $201.7 million and $201.6 million, respectively, of liabilities were being held with respect to issuances outstanding under this program. Principal Life does not anticipate any new issuance activity under this program, given our December 2005 termination of the dealership agreement for this program and the availability of the program established in 2011 described below.

Additionally, Principal Life was authorized to issue up to $9.0 billion of funding agreements under a program that was originally established in March 2004 to support the prospective issuance of medium term notes by unaffiliated entities in both domestic and international markets. Under this program, both the notes and the supporting funding agreements were registered with the United States Securities and Exchange Commission (“SEC”). As of both December 31, 2019 and 2018, $26.2 million of liabilities were being held with respect to issuances outstanding under this program. In contrast with direct funding agreements, GIC issuances and the other three funding agreement-backed medium term note programs described above, Principal Life's payment obligations on each funding agreement issued under this SEC-registered program are guaranteed by PFG. Principal Life does not anticipate any new issuance activity under this program due to the existence of the program established in 2011 described below.

Principal Life was authorized to issue up to $5.0 billion of funding agreements under a program that was originally established in 2011 to support the prospective issuance of medium term notes by an unaffiliated entity in both domestic and international markets. The unaffiliated entity is an unconsolidated special purpose entity. In June 2015, this program was amended to authorize issuance of up to an additional $4.0 billion in recognition of the use of nearly all $5.0 billion of existing issuance authorization. In November 2017, this program was amended to authorize issuance of up to an additional $4.0 billion. As of December 31, 2019 and 2018, $4,214.3 million and $3,765.3 million, respectively, of liabilities were being held with respect to issuances outstanding under this program. Similar to the SEC-registered program, Principal Life’s payment obligations on each funding agreement issued under this program are guaranteed by PFG. The program established in 2011 is not registered with the SEC.

8. Insurance Liabilities – (continued)

Liability for Unpaid Claims

The liability for unpaid claims is reported in future policy benefits and claims within our consolidated statements of financial position. Activity associated with unpaid claims was as follows:

For the year ended December 31, 

 

    

2019

    

2018

    

2017

  

(in millions)

 

Balance at beginning of year

$

2,252.7

$

2,130.5

$

2,001.3

Less: reinsurance recoverable

404.3

375.8

340.3

Net balance at beginning of year

1,848.4

1,754.7

1,661.0

Incurred:

Current year

1,361.3

 

1,268.8

 

1,196.6

Prior years

0.8

 

0.3

 

18.2

Total incurred

1,362.1

 

1,269.1

 

1,214.8

Payments:

Current year

869.4

 

815.7

 

767.2

Prior years

379.4

 

359.7

 

353.9

Total payments

1,248.8

 

1,175.4

 

1,121.1

Net balance at end of year

1,961.7

1,848.4

1,754.7

Plus: reinsurance recoverable

403.8

404.3

375.8

Balance at end of year

$

2,365.5

$

2,252.7

$

2,130.5

Amounts not included in the rollforward above:

Claim adjustment expense liabilities

$

57.9

$

54.6

$

50.7

Incurred liability adjustments relating to prior years, which affected current operations during 2019, 2018 and 2017, resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims.

Short-Duration Contracts

Claims Development

The following tables present undiscounted information about claims development by incurral year, including separate information about incurred claims and paid claims net of reinsurance for the periods indicated. The tables also include information on incurred but not reported claims and the cumulative number of reported claims.

The tables present information for the number of years for which claims incurred typically remain outstanding, but do not exceed ten years. The data is disaggregated into groupings of claims with similar characteristics, such as duration of the claim payment period and average claim amount, and with consideration to the overall size of the groupings. Outstanding liabilities equal total net incurred claims less total net paid claims plus outstanding liabilities for net unpaid claims of prior years.

8.  Insurance Liabilities – (continued)

LTD and Group Life Waiver Claims

Incurred

Cumulative

but not

number of

reported

reported

Net incurred claims (1)

claims

claims

December 31, 

   

2010

   

2011

   

2012

   

2013

   

2014

   

2015

   

2016

   

2017

   

2018

   

2019

   

2019

  

  

2019

($ in millions)

Incurral year

2010

$

184.1

$

176.7

$

176.2

$

172.0

$

162.7

$

155.7

$

154.1

$

153.4

$

152.1

$

151.8

$

0.1

5,649

2011

203.7

192.6

185.4

184.8

178.4

172.3

169.6

167.6

166.5

0.1

6,290

2012

217.9

200.0

191.1

189.5

181.8

174.8

173.3

171.9

0.1

6,444

2013

219.3

203.3

188.4

190.7

182.3

179.5

177.1

0.1

7,050

2014

242.2

231.4

214.4

218.1

206.2

201.9

0.1

7,596

2015

231.0

227.2

217.2

215.3

208.2

0.1

7,174

2016

229.8

228.4

219.4

219.5

5.4

6,161

2017

238.4

239.7

243.1

8.0

6,053

2018

239.4

245.1

3.8

5,668

2019

255.2

104.6

3,472

Total net incurred claims

$

2,040.3

    Net cumulative paid claims (1)

        

          

December 31, 

  

  

   

2010

   

2011

   

2012

   

2013

   

2014

   

2015

   

2016

   

2017

   

2018

   

2019

   

(in millions)

Incurral year

2010

$

10.4

$

46.5

$

67.1

$

78.4

$

85.9

$

94.2

$

100.9

$

107.2

$

112.1

$

116.7

                 

                  

2011

11.2

50.0

72.5

85.7

95.4

105.2

112.6

119.3

125.4

2012

13.8

55.1

80.8

93.7

104.6

112.9

120.0

126.1

2013

12.5

55.0

81.4

97.0

106.4

116.4

123.2

2014

16.1

66.0

96.3

111.8

122.3

132.4

2015

16.9

67.0

98.0

114.6

126.8

2016

16.2

70.6

105.6

124.9

2017

17.8

76.5

115.0

2018

20.1

79.9

2019

19.2

Total net paid claims

1,089.6

All outstanding liabilities for unpaid claims prior to 2010 net of reinsurance

237.8

Total outstanding liabilities for unpaid claims net of reinsurance

$

1,188.5

(1)2010-2018 unaudited.

8. Insurance Liabilities – (continued)

Dental, Vision, STD, Critical Illness and Accident Claims

Incurred

Cumulative

but not

number of

reported

reported

Net incurred claims (1)

claims

claims

December 31, 

    

2018

    

2019

    

2019

    

2019

  

($ in millions)

Incurral year

2018

$

648.3

$

640.0

$

3,032,617

2019

724.7

45.0

3,184,519

Total net incurred claims

$

1,364.7

Net cumulative

paid claims (1)

December 31, 

2018

    

2019

    

    

(in millions)

Incurral year

2018

$

589.1

$

640.0

2019

653.5

Total net paid claims

1,293.5

All outstanding liabilities for unpaid claims prior to 2018 net of reinsurance

Total outstanding liabilities for unpaid claims net of reinsurance

$

71.2

(1)2018 unaudited.

8. Insurance Liabilities – (continued)

Group Life Claims

Incurred

Cumulative

but not

number of

reported

reported

Net incurred claims (1)

claims

claims

December 31, 

    

2018

    

2019

    

2019

    

2019

  

($ in millions)

Incurral year

2018

$

239.6

$

238.4

$

0.7

5,220

2019

228.3

23.0

4,625

Total net incurred claims

$

466.7

Net cumulative

paid claims (1)

December 31, 

    

2018

    

2019

    

    

(in millions)

Incurral year

2018

$

193.9

$

236.5

2019

181.7

Total net paid claims

418.2

All outstanding liabilities for unpaid claims prior to 2018 net of reinsurance

1.0

Total outstanding liabilities for unpaid claims net of reinsurance

$

49.5

(1)2018 unaudited.

Reconciliation of Unpaid Claims to Liability for Unpaid Claims

Our reconciliation of net outstanding liabilities for unpaid claims of short-duration contracts to the liability for unpaid claims follows:

December 31, 2019

Dental, Vision, STD,

LTD and Group Life

Critical Illness and

    

Waiver

    

Accident

    

Group Life

    

Consolidated

  

(in millions)

Net outstanding liabilities for unpaid claims

$

1,188.5

$

71.2

$

49.5

$

1,309.2

Reconciling items:

Reinsurance recoverable on unpaid claims

56.4

0.9

57.3

Impact of discounting

(215.0)

(215.0)

Liability for unpaid claims - short-duration contracts

$

1,029.9

$

71.2

$

50.4

1,151.5

Insurance contracts other than short-duration

1,214.0

Liability for unpaid claims

$

2,365.5

8. Insurance Liabilities – (continued)

Claim Duration and Payout

Our historical average percentage of claims paid in each year from incurral was as follows:

December 31, 2019 (1)

Dental, Vision, STD,

LTD and Group Life

Critical Illness and

Group

Year

    

Waiver

    

Accident

    

Life

1

7.6

%  

91.7

%  

81.7

%

2

24.2

8.0

17.0

3

14.9

4

8.1

5

5.6

6

5.3

7

4.2

8

3.9

9

3.5

10

3.1

(1)Unaudited.

Discounting

The following table provides the carrying amount of liabilities reported at present value for short-duration contract unpaid claims. We use a range of discount rates to derive the present value of the unpaid claims. The ranges of discount rates as well as the aggregate amount of discount deducted to derive the liabilities for unpaid claims and interest accretion recognized are also disclosed. Interest accretion is included in benefits, claims and settlement expenses within our consolidated statements of operations.

  

Dental, Vision, STD,

  

LTD and Group Life

Critical Illness and

 

    

Waiver

 

Accident

Group Life

($ in millions)

Carrying amount of liabilities for unpaid claims

    

    

    

December 31, 2019

$

1,029.9

$

71.2

$

50.4

December 31, 2018

1,020.0

59.3

49.7

Range of discount rates

December 31, 2019

3.3

-

7.0

%

-

%

-

%

December 31, 2018

3.3

-

7.0

-

-

Aggregate amount of discount

December 31, 2019

$

215.0

$

$

December 31, 2018

217.7

Interest accretion

For the year ended:

December 31, 2019

$

34.2

$

$

December 31, 2018

34.5

December 31, 2017

35.0

v3.19.3.a.u2
Debt
12 Months Ended
Dec. 31, 2019
Debt  
Debt

9. Debt

Short-Term Debt

The components of short-term debt were as follows:

December 31, 2019

 

Financing

Short-term debt

 

Obligor/Applicant

    

structure

    

Maturity

    

Capacity

    

outstanding

  

(in millions)

 

PFG, Principal Financial Services, Inc. ("PFS"),

Principal Life as co-borrowers

 

Credit facility

 

November 2023

$

600.0

$

PFG, PFS, Principal Life and Principal Financial

 

  

 

  

 

  

 

Services V (UK) LTD as co-borrowers

 

Credit facility

 

November 2023

 

200.0

 

Principal International Chile (1)

 

Unsecured lines of credit

 

  

 

134.5

 

93.4

Principal Life

 

Unsecured line of credit

September 2020

 

60.0

 

Total

 

  

 

  

$

994.5

$

93.4

December 31, 2018

 

Financing

Short-term debt

 

Obligor/Applicant

    

structure

    

Maturity

    

Capacity

    

outstanding

  

(in millions)

 

PFG, PFS, Principal Life as co-borrowers

 

Credit facility

 

November 2023

$

600.0

$

PFG, PFS, Principal Life and Principal Financial

 

  

 

  

 

  

 

  

Services V (UK) LTD as co-borrowers

 

Credit facility

 

November 2023

 

200.0

 

Principal International Chile (1)

 

Unsecured lines of credit

 

141.4

 

42.9

Principal Life

 

Unsecured line of credit

September 2019

 

60.0

 

Total

$

1,001.4

$

42.9

(1)The unsecured lines of credit can be used for repurchase agreements or other borrowings. Each line has a maturity of less than one year.

Our revolving credit facilities are committed and available for general corporate purposes. These credit facilities also provide 100% back-stop support for our commercial paper program, of which we had no outstanding balances as of December 31, 2019 and 2018. The weighted-average interest rate on short-term borrowings as of December 31, 2019 and 2018, was 3.4% and 3.9%, respectively.

9. Debt – (continued)

Long-Term Debt

The components of long-term debt were as follows:

December 31, 2019

 

    

Principal

    

Net unamortized
discount,
premium and
debt issuance
costs

    

Carrying
amount

  

(in millions)

 

3.3% notes payable, due 2022

$

300.0

$

(1.0)

$

299.0

3.125% notes payable, due 2023

300.0

(1.0)

 

299.0

3.4% notes payable, due 2025

400.0

(2.6)

 

397.4

3.1% notes payable, due 2026

350.0

(2.5)

347.5

3.7% notes payable, due 2029

500.0

(6.1)

493.9

6.05% notes payable, due 2036

505.6

(2.4)

 

503.2

4.625% notes payable, due 2042

300.0

(3.2)

 

296.8

4.35% notes payable, due 2043

300.0

(3.3)

 

296.7

4.3% notes payable, due 2046

300.0

(3.3)

296.7

4.7% notes payable, due 2055

400.0

(4.9)

 

395.1

Non-recourse mortgages and notes payable

 

107.6

 

1.2

 

108.8

Total long-term debt

$

3,763.2

$

(29.1)

$

3,734.1

December 31, 2018

    

Principal

    

Net unamortized
discount,
premium and
debt issuance
costs

    

Carrying
amount

  

(in millions)

3.3% notes payable, due 2022

$

300.0

$

(1.5)

$

298.5

3.125% notes payable, due 2023

300.0

(1.2)

298.8

3.4% notes payable, due 2025

400.0

(3.0)

 

397.0

3.1% notes payable, due 2026

350.0

(2.7)

347.3

6.05% notes payable, due 2036

505.6

(2.6)

 

503.0

4.625% notes payable, due 2042

300.0

(3.3)

 

296.7

4.35% notes payable, due 2043

300.0

(3.3)

296.7

4.3% notes payable, due 2046

300.0

(3.3)

296.7

4.7% notes payable, due 2055

400.0

(4.9)

 

395.1

Non-recourse mortgages and notes payable

128.5

1.3

 

129.8

Total long-term debt

$

3,284.1

$

(24.5)

$

3,259.6

Net discount, premium and issuance costs associated with issuing these notes are amortized to expense over the respective terms using the interest method.

On May 7, 2019, we issued $500.0 million of senior notes. The notes bear interest at 3.7% and will mature in 2029. Interest on the notes is payable semi-annually on May 15 and November 15 each year, beginning on November 15, 2019. The proceeds from these notes, along with available cash, were used to fund the acquisition of the Acquired Business.

9. Debt – (continued)

On November 10, 2016, we issued $650.0 million of senior notes. We issued a $350.0 million series of notes that bear interest at 3.1% and will mature in 2026 and a $300.0 million series of notes that bear interest at 4.3% and will mature in 2046. Interest on the notes is payable semi-annually on May 15 and November 15 each year, beginning on May 15, 2017. The proceeds from these notes were used to redeem our notes payable due in 2017 and 2019. We incurred a one-time cost to extinguish this debt before the scheduled maturity date.

On May 7, 2015, we issued $400.0 million of senior notes. The notes bear interest at 3.4% and will mature in 2025. Interest on the notes is payable semi-annually on May 15 and November 15 each year, beginning on November 15, 2015. In addition, on May 7, 2015, we issued $400.0 million of junior subordinated notes, which are subordinated to all our senior debt. The notes are callable in 2020 and have a maturity date in 2055. The notes initially bear a fixed rate of interest at 4.7% and convert to a floating rate at the date the notes become callable. Interest on the notes is payable semi-annually on May 15 and November 15 each year. After the call date the notes will bear interest at 3-month LIBOR plus 3.044%, reset quarterly and payable in arrears in February, May, August and November each year. We have the right to defer interest payments on the junior subordinated notes for up to 5 years without resulting in a default, during which time interest will be compounded. The proceeds from these notes were used to redeem preferred stock, with the remainder available for general corporate purposes.

On November 16, 2012, we issued $900.0 million of senior notes. We issued a $300.0 million series of notes that bore interest at 1.85% and were to mature in 2017. These notes were repaid following our November 2016 debt issuance. We issued a $300.0 million series of notes that bear interest at 3.125% and will mature in 2023 and a $300.0 million series of notes that bear interest at 4.35% and will mature in 2043. Interest on the notes is payable semi-annually on May 15 and November 15 each year, beginning on May 15, 2013. The proceeds were used to fund our acquisition of Cuprum.

On September 5, 2012, we issued $600.0 million of senior notes. We issued a $300.0 million series of notes that bear interest at 3.3% and will mature in 2022 and a $300.0 million series of notes that bear interest at 4.625% and will mature in 2042. Interest on the notes is payable semi-annually on March 15 and September 15 each year, beginning on March 15, 2013. The proceeds were used for the repayment of the $400.0 million aggregate principal amount of notes due in 2014 and to partially fund our acquisition of Cuprum.

On May 18, 2009, we issued $750.0 million of senior notes. We issued a $400.0 million series of notes that bore interest at 7.875% and were to mature on May 15, 2014. These notes were repaid following our November 2012 debt issuance. We issued a $350.0 million series of notes that bore interest at 8.875% and were to mature on May 15, 2019. These notes were repaid following our November 2016 debt issuance. Interest on the notes was payable semi-annually on May 15 and November 15 each year, beginning on November 15, 2009. The proceeds were primarily used to refinance $440.9 million of notes that matured on August 15, 2009, with the remaining proceeds being used for general corporate purposes.

On October 16 and December 5, 2006, we issued $500.0 million and $100.0 million, respectively, of senior notes. The notes bear interest at a rate of 6.05% per year. Interest on the notes is payable semi-annually on April 15 and October 15 each year and began on April 15, 2007. The notes will mature on October 15, 2036. A portion of the proceeds were used to fund the 2006 acquisition of WM Advisors, Inc., with the remaining proceeds being used for general corporate purposes. A tender offer in the fourth quarter of 2016 resulted in redemption of $94.4 million of the senior notes. We incurred a one-time cost to extinguish this debt before the scheduled maturity date.

The non-recourse mortgages and notes payable are primarily financings for real estate developments. Outstanding principal balances as of December 31, 2019, ranged from $3.7 million to $64.2 million per development with interest rates ranging from 3.9% to 4.8%. Outstanding principal balances as of December 31, 2018, ranged from $3.8 million to $58.4 million per development with interest rates ranging from 3.9% to 4.8%. Outstanding debt is secured by the underlying real estate properties, which were reported as real estate on our consolidated statements of financial position with a carrying value of $238.2 million and $307.3 million as of December 31, 2019 and 2018, respectively.

9. Debt – (continued)

As of December 31, 2019, future annual maturities of long-term debt were as follows (in millions):

Year ending December 31:

    

    

  

2020

$

65.9

2021

1.8

2022

300.7

2023

314.0

2024

17.5

Thereafter

3,034.2

Total future maturities of long-term debt

$

3,734.1

Contingent Funding Agreements for Senior Debt Issuance

On March 8, 2018, we entered into two contingent funding agreements: (1) a 10-year contingent funding agreement with a Delaware trust (“2028 Trust”) formed by us in connection with the sale by the trust of $400.0 million pre-capitalized trust securities redeemable February 15, 2028 ("2028 P-Caps") in a Rule 144A private placement and (2) a 30-year contingent funding agreement with a Delaware trust (“2048 Trust”) formed by us in connection with the sale by the trust of $350.0 million pre-capitalized trust securities redeemable February 15, 2048 ("2048 P-Caps") in a Rule 144A private placement. The trusts invested the proceeds from the sale of the 2028 P-Caps and 2048 P-Caps in a portfolio of principal and interest strips of U.S. Treasury securities. The contingent funding agreements provide us a put option that gives us the right to sell at any time: (1) to the 2028 Trust up to $400.0 million of its 4.111% Senior Notes due 2028 ("4.111% Senior Notes") and (2) to the 2048 Trust up to $350.0 million of its 4.682% Senior Notes due 2048 (“4.682% Senior Notes”) and receive in exchange a corresponding amount of the principal and interest strips of U.S. Treasury securities held by the trusts. The 4.111% Senior Notes and 4.682% Senior Notes will not be issued unless and until a put option is exercised. We agreed to pay a semi-annual put premium of 1.275% and 1.580% per annum on the unexercised portion of the put option to the 2028 Trust and 2048 Trust, respectively, and to reimburse the trusts for expenses. The put option premiums are recorded in operating expenses in the consolidated statements of operations. The 4.111% Senior Notes and 4.682% Senior Notes will be fully, irrevocably and unconditionally guaranteed by PFS. In addition, our obligations under the put option agreement and the expense reimbursement agreement with the trusts are also guaranteed by PFS. The contingent funding agreements with the trusts provide us with a source of liquid assets, which could be used to meet future financial obligations or to provide additional capital.

The put options described above will be exercised automatically in full if we fail to make certain payments to the trusts, including any failure to pay the put option premium or expense reimbursements when due, if such failure is not cured within 30 days, and upon certain bankruptcy events involving us or PFS. We are also required to exercise the put option in full: (i) if we reasonably believe that our consolidated shareholders’ equity, calculated in accordance with U.S. GAAP but excluding AOCI and noncontrolling interest, has fallen below $4.0 billion, subject to adjustment in certain cases; (ii) upon the occurrence of an event of default under the 4.111% Senior Notes and 4.682% Senior Notes; and (iii) if certain events occur relating to each trust’s status as an "investment company" under the Investment Company Act of 1940. In addition, we are required to purchase from the trusts any principal and interest strips of U.S. Treasury securities that are due and not paid.

We have an unlimited right to unwind a prior voluntary exercise of the put options by repurchasing all of the 4.111% Senior Notes and 4.682% Senior Notes held by the trusts in exchange for a corresponding amount of principal and interest strips of U.S. Treasury securities. If the put options have been fully exercised, the 4.111% Senior Notes and 4.682% Senior Notes issued may be redeemed by us prior to their maturity at par or, if greater, at a make-whole redemption price, in each case plus accrued and unpaid interest to the date of redemption. The 2028 P-Caps are to be redeemed by the 2028 Trust on February 15, 2028, or upon any early redemption of the 4.111% Senior Notes. The 2048 P-Caps are to be redeemed by the 2048 Trust on February 15, 2048, or upon any early redemption of the 4.682% Senior Notes.

v3.19.3.a.u2
Income Taxes
12 Months Ended
Dec. 31, 2019
Income Taxes  
Income Taxes

10. Income Taxes

Income Taxes (Benefits)

Our income taxes (benefit) were as follows:

For the year ended December 31, 

 

    

2019

    

2018

    

2017

  

(in millions)

 

Current income taxes (benefits):

U.S. federal

$

31.9

$

(48.9)

$

(4.4)

State

18.1

 

10.3

 

48.9

Foreign

45.6

 

51.7

 

38.1

Tax benefit of operating loss carryforward

(3.0)

 

(13.5)

 

(21.5)

Total current income taxes (benefits)

92.6

 

(0.4)

 

61.1

Deferred income taxes (benefits):

U.S. federal

108.6

 

224.3

 

(208.2)

State

6.9

 

19.2

 

42.5

Foreign

41.1

 

(12.4)

 

32.3

Total deferred income taxes (benefits)

156.6

 

231.1

 

(133.4)

Income taxes (benefits)

$

249.2

$

230.7

$

(72.3)

Our income before income taxes was as follows:

For the year ended December 31,

    

2019

    

2018

    

2017

  

(in millions)

Domestic

 

$

1,365.1

 

$

1,658.1

 

$

1,848.5

Foreign

328.2

126.3

403.7

Total income before income taxes

 

$

1,693.3

 

$

1,784.4

 

$

2,252.2

Effective Income Tax Rate

Our provision for income taxes may not have the customary relationship of taxes to income. A reconciliation between the U.S. corporate income tax rate and the effective income tax rate was as follows:

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

 

U.S. corporate income tax rate

 

21

%  

21

%  

35

%

Dividends received deduction

(5)

(4)

(8)

Tax credits

(3)

(3)

(2)

Impact of equity method presentation

(2)

(1)

(2)

Impact of the Tax Cuts and Jobs Act

(3)

(25)

Interest exclusion from taxable income

(1)

(1)

State income taxes

1

1

2

Local country permanent tax adjustments

1

1

Other

2

2

(2)

Effective income tax rate

15

%  

13

%  

(3)

%

The U.S. tax reform enacted on December 22, 2017, made broad and complex changes to the U.S. Internal Revenue Code applicable to us. The U.S. statutory tax rate was reduced from 35% to 21% effective January 1, 2018. Other provisions of U.S. tax reform effective January 1, 2018, included, but were not limited to: 1) provisions reducing the dividends received deduction; 2) essentially eliminating U.S. federal income taxes on dividends from foreign subsidiaries; 3) retaining an element of current inclusion of certain earnings of controlled foreign corporations; 4) eliminating the corporate alternative minimum tax (“AMT”); and, 5) changing how existing AMT credits are realized.

10.  Income Taxes – (continued)

Unrecognized Tax Benefits

Our changes in unrecognized tax benefits were as follows:

For the year ended December 31, 

 

    

2019

    

2018

    

2017

  

(in millions)

 

Balance at beginning of period

$

42.1

$

194.1

$

207.8

Additions based on tax positions related to the current year

0.1

 

0.8

 

7.2

Additions for tax positions of prior years

23.1

 

43.7

 

20.2

Reductions for tax positions related to the current year

(3.2)

 

(10.6)

 

(3.3)

Reductions for tax positions of prior years

(0.5)

 

(23.2)

 

(1.1)

Settlements

(162.7)

(36.7)

Balance at end of period (1)

$

61.6

$

42.1

$

194.1

(1)If recognized, $4.4 million of the above amount of unrecognized tax benefits would reduce our 2019 effective income tax rate. We recognize interest and penalties related to uncertain tax positions in operating expenses within the consolidated statements of operations.

As of December 31, 2019, 2018 and 2017, we had recognized $0.9 million, $1.6 million and $125.5 million of accumulated pre-tax interest and penalties related to unrecognized tax benefits, respectively. We do not believe there is a reasonable possibility the total amount of the unrecognized tax benefits will significantly increase or decrease in the next twelve months considering recent settlements and the status of current and pending Internal Revenue Service (“IRS”) examinations. Settlement agreements applicable to tax years 1995 to 2003 were executed in 2018 with the Department of Justice, as previously approved by the Joint Committee of Taxation in August 2017. In 2019, an IRS 30-day letter on examination of tax years 2009 through 2012 was received, and the IRS began its examination of tax years 2015 through 2017.

10. Income Taxes – (continued)

Net Deferred Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Our significant components of net deferred income taxes were as follows:

December 31, 

 

    

2019

    

2018

  

(in millions)

 

Deferred income tax assets:

Investments, including derivatives

$

237.0

$

165.6

Insurance liabilities

143.2

 

Net operating and capital loss carryforwards

71.1

 

80.8

Tax credit carryforwards

106.0

163.3

Employee benefits

338.9

 

327.3

Foreign currency translation

14.0

28.1

Other deferred income tax assets

45.2

 

33.8

Gross deferred income tax assets

955.4

 

798.9

Valuation allowance

(16.7)

 

(17.0)

Total deferred income tax assets

938.7

 

781.9

Deferred income tax liabilities:

Deferred acquisition costs

(562.9)

 

(615.8)

Investments, including derivatives

(443.7)

 

(298.1)

Net unrealized gains on available-for-sale securities

(1,039.9)

 

(98.1)

Real estate

(147.9)

 

(144.9)

Intangible assets

(342.3)

 

(310.0)

Insurance liabilities

(60.2)

Other deferred income tax liabilities

(75.0)

 

(71.9)

Total deferred income tax liabilities

(2,611.7)

 

(1,599.0)

Total net deferred income tax liabilities

$

(1,673.0)

$

(817.1)

Our net deferred income taxes by jurisdiction were as follows:

December 31, 

 

    

2019

    

2018

  

(in millions)

 

Deferred income tax assets:

State

$

94.9

$

108.2

Foreign

28.7

33.1

Net deferred income tax assets

123.6

 

141.3

Deferred income tax liabilities:

U.S. federal

(1,507.6)

 

(708.2)

Foreign

(289.0)

 

(250.2)

Net deferred income tax liabilities

(1,796.6)

 

(958.4)

Total net deferred income tax liabilities

$

(1,673.0)

$

(817.1)

10.  Income Taxes – (continued)

In management’s judgment, total deferred income tax assets are more likely than not to be realized. Included in the deferred income tax asset are tax carryforwards available to offset future taxable income or income taxes. As of December 31, 2019 and 2018, we had tax credit carryforwards for U.S. federal income tax purposes of $106.0 million and $163.3 million, respectively. Alternative minimum, foreign and general business tax credit carryovers were generated during and since the period we utilized net operating losses, primarily attributable to our captive reinsurance companies that joined our consolidated U.S. federal income tax return beginning in 2012 and 2013. The AMT credit carryforwards became refundable in 2018 and will be fully recovered by 2021, and the other tax credits will expire by 2028 if unused. As of December 31, 2019, all accumulated U.S. federal tax credit carryforwards are anticipated to be utilized before expiration; therefore, no valuation allowance has been provided for the related deferred income tax assets.

As of December 31, 2019 and 2018, domestic state net operating loss carryforwards were $190.4 million and $309.6 million, respectively, and will expire between 2026 and 2036. As of December 31, 2019 and 2018, foreign net operating loss carryforwards were $186.1 million and $191.3 million, respectively, with some expiring in 2019 while others never expire. We maintain valuation allowances by jurisdiction against the deferred income tax assets related to certain of these carryforwards and other items, as utilization of these income tax benefits fail the more likely than not criteria in certain jurisdictions. As of December 31, 2019 and 2018, valuation allowances of $16.7 million and $17.0 million, respectively, had been recorded against the income tax benefits associated primarily with foreign net operating loss carryforwards. Adjustments to the valuation allowance will be made if there is a change in management’s assessment of the amount of the deferred income tax assets that are more likely than not to be realized. Provisions of the U.S. tax reform did not affect the valuation allowance assessment.

The effects of tax legislation on deferred taxes are recognized in the period of enactment. The State of Iowa coupled with the Internal Revenue Code effective January 1, 2019, and subsequently issued interpretative guidance in the fourth quarter of 2019 on application of the U.S. Global Intangible Low Taxed Income rules. The State of Iowa's interpretation resulted in an $11.1 million increase in total income tax expense for adjustments to deferred tax assets and liabilities. The primary impact of U.S. tax reform on our 2017 financial results was associated with the effect of reducing the U.S. statutory tax rate from 35% to 21% on our deferred tax balances as of December 31, 2017, and a one-time deemed repatriation tax on certain unremitted earnings of foreign subsidiaries. The effects of the U.S. tax reform were reflected in the 2017 financial statements as determined or as reasonably estimated provisional amounts based on available information subject to interpretation in accordance with the SEC’s Staff Accounting Bulletin No. 118 (“SAB 118”). The provisional amounts were primarily associated with estimation of the one-time deemed repatriation tax considering complexity as well as limited and changing technical tax guidance. Further, the provisional amounts also apply in regard to other potential technical interpretations of accounting and taxing authorities related to elements of the U.S. tax reform subject to change. Proposed regulations issued August 1, 2018, clarifying the calculation of the one-time deemed repatriation tax, allowed for final determination of the 2017 provisional amount. The impact of final §965 regulations issued on January 15, 2019, and subsequent clarification was immaterial. The one-time deemed repatriation tax in 2017 was based on the greater of unremitted earnings and profits from foreign operations of our subsidiaries determined as of November 2, 2017 or December 31, 2017, which amounted to $43.0 million. The provisional amount of $43.0 million reported in 2017 was adjusted by $5.9 million in 2018 to $48.9 million to reflect the SAB 118 final determination within the required one-year measurement period.

Deferred tax liabilities are recognized for taxes payable on the unremitted earnings from foreign operations of our subsidiaries, except where it is our intention to indefinitely reinvest a portion or all of these undistributed earnings. As of December 31, 2019 and 2018, any applicable taxes that would be due upon repatriation were not provided on approximately $1,001.5 million and $1,184.0 million, respectively, of such accumulated but undistributed earnings from operations of foreign subsidiaries. We currently do not intend to repatriate these unremitted earnings because we have several liquidity options to fund our domestic operations and obligations. These options include investing and financing activities, such as issuing debt, as well as cash flow and dividends from domestic operations. As of December 31, 2019 and 2018, it was not practicable to determine the amount of the unrecognized deferred tax liability that would arise if foreign earnings were remitted, due to the complexity of our international holding company structure, and other significant tax attributes and varying state tax laws. Under the participation exemption available on distributions post-U.S. tax reform, taxes on remittances would be limited to foreign currency gains or losses, foreign withholding taxes, and state income taxes, which we would anticipate to be immaterial.

10.  Income Taxes – (continued)

As of December 31, 2019, deferred taxes were also not provided on the approximately $106.2 million of excess book carrying value over tax basis with respect to the original investment in our foreign subsidiaries. A tax liability will be recognized when we no longer plan to indefinitely reinvest a portion or all of these earnings or when we plan to sell a portion or all of our ownership interest.

Other Tax Information

Income tax returns are filed in U.S. federal jurisdiction as well as various states and foreign jurisdictions where we and one or more of our subsidiaries conduct business. Although determined by jurisdiction, with few exceptions our tax uncertainties relate primarily to the U.S. federal jurisdiction. The IRS has completed examination of our consolidated U.S. federal income tax returns for years prior to 2009. A settlement was reached in 2018 with the Department of Justice involving a suit in the Court of Federal Claims, requesting refunds for the years 1995-2003. IRS claims for refund for tax years 2004 through 2008, following settlement of a partnership matter with the Department of Justice in March 2019, are expected to be finalized in 2020 following review by the Joint Committee of Taxation. As of December 31, 2019 and 2018, we had $195.3 million and $193.0 million, respectively, of current income tax receivables associated with outstanding audit issues reported as other assets in our consolidated statements of financial position.

We filed claims for refund for tax years 2006 through 2008 in 2015 and tax year 2012 in 2016. The IRS commenced audit of our U.S. federal income tax return for 2009 in the fourth quarter of 2011, 2010 in the first quarter of 2012, 2011 in the first quarter of 2013, 2012 in the third quarter of 2015 and 2015 through 2017 in the first quarter of 2019. The U.S. federal statute of limitations expired for years prior to 2009, except for pending audit issues. The statute was extended until December 31, 2020, for 2009 through 2012, has expired for 2013 and 2014, and was extended or remains open for tax years 2015 through 2017 through October 15, 2021. The ultimate settlement of earlier tax years can be adjusted into subsequent tax years regardless of statute status. We do not expect the results of these audits, subsequent related adjustments or developments in other tax areas for all open tax years to significantly change the possible increase in the amount of unrecognized tax benefits, but the outcome of tax reviews is uncertain and unforeseen results can occur.

We believe we have adequate defenses against, or sufficient provisions for, contested issues, but final resolution could take several years while legal remedies are pursued. Consequently, we do not expect the resolved issues from tax years 1995-2003 or those that might arise in tax years subsequent to 2003 to have a material impact on our net income.

v3.19.3.a.u2
Employee and Agent Benefits
12 Months Ended
Dec. 31, 2019
Employee and Agent Benefits  
Employee and Agent Benefits

11. Employee and Agent Benefits

We provide a U.S. qualified defined benefit pension plan, covering U.S. employees that meet certain eligibility requirements and certain agents contracted on or before December 31, 2018. A final average pay benefit formula has been in place for plan participants employed prior to January 1, 2002. For agents, this formula ended on December 31, 2018, and for employees the formula will end on December 31, 2022. The final average pay benefit is based on the years of service and generally the employee's or agent's average annual compensation during the last five years prior to the earliest of termination, retirement or the formula end date. A cash balance benefit was added on January 1, 2002. A participant's cash balance account is credited with an amount based on the participant’s salary, age and service. These credits accrue with interest. For plan participants hired on and after January 1, 2002, only the cash balance benefit applies. For pre-2002 participants, the pension benefit earned prior to the final average pay formula end date is the greater of the final average pay benefit or the cash balance benefit earned before the end date. They will also earn a new cash balance benefit for service after the formula end date.

In addition, we sponsor non-qualified defined benefit plans subject to Section 409A of the Internal Revenue Code. This plan is for certain highly compensated employees and agents to replace the benefit that cannot be provided by the qualified defined benefit pension plan due to IRS limits. These nonqualified plans generally parallel the qualified plan but offer different payment options. No agent will become a new participant in the nonqualified plan after December 31, 2018.

We provide certain health care, life insurance and long-term care benefits for retired employees, their beneficiaries and covered dependents ("other postretirement benefits").

11. Employee and Agent Benefits – (continued)

While virtually all U.S. employees continue to have access to the post-retirement health care and life insurance benefits, only those U.S. employees that were hired prior to January 1, 2002, and retired prior to January 1, 2011, (post-65 medical) or January 1, 2020, (life insurance and pre-65 medical) were eligible to receive subsidized benefits. All others pay the full cost of coverage. The long-term care plan was subsidized only for those who retired prior to January 1, 2000, and is no longer accessible. The subsidy level for all benefits varies by plan, age, service and retirement date.

The funding policy for all employee benefit plans is to fund the cost of providing pension benefits in the years that the employees and agents are providing service, taking into account the funding status of the trust. For the qualified defined benefit plan, this policy will be subject to an amount no lower than the minimum annual contribution required under the Employee Retirement Income Security Act (“ERISA”), and, generally, not greater than the maximum amount that can be deducted for U.S. federal income tax purposes. While we designate assets to cover the computed liability of the nonqualified pension plan, the assets are not included as part of the asset balances presented in this footnote as they do not qualify as plan assets in accordance with U.S. GAAP.

Obligations and Funded Status

The plans' combined funded status, reconciled to amounts recognized in the consolidated statements of financial position, was as follows:

Other postretirement

 

Pension benefits

benefits

 

December 31, 

December 31, 

 

    

2019

    

2018

    

2019

    

2018

 

(in millions)

 

Change in benefit obligation

    

Benefit obligation at beginning of year

$

(3,239.2)

$

(3,383.6)

$

(98.9)

$

(109.1)

Service cost

(66.0)

 

(73.0)

 

(0.1)

Interest cost

(126.5)

 

(119.5)

(3.7)

 

(3.5)

Actuarial gain (loss)

(506.4)

 

220.9

(4.8)

 

7.9

Participant contributions

 

(4.4)

 

(3.7)

Benefits paid

123.6

 

109.6

12.2

 

9.7

Plan amendments

122.4

 

6.4

(1.8)

Other

(0.1)

Benefit obligation at end of year

$

(3,692.1)

$

(3,239.2)

$

(101.4)

$

(98.9)

Change in plan assets

Fair value of plan assets at beginning of year

$

2,498.2

$

2,542.2

$

643.9

$

696.8

Actual return on plan assets

520.9

 

(122.2)

95.5

 

(47.7)

Employer contribution

30.5

 

187.8

1.2

 

0.8

Participant contributions

 

4.4

 

3.7

Benefits paid

(123.6)

 

(109.6)

(12.2)

 

(9.7)

Fair value of plan assets at end of year

$

2,926.0

$

2,498.2

$

732.8

$

643.9

Amount recognized in statement of financial position

Other assets

$

$

$

635.1

$

546.9

Other liabilities

(766.1)

 

(741.0)

(3.7)

 

(1.9)

Total

$

(766.1)

$

(741.0)

$

631.4

$

545.0

Amount recognized in accumulated other comprehensive (income) loss

Total net actuarial (gain) loss

$

737.5

$

673.3

$

(17.4)

$

40.2

Prior service benefit

(137.8)

 

(26.7)

(7.3)

 

(10.2)

Pre-tax accumulated other comprehensive (income) loss

$

599.7

$

646.6

$

(24.7)

$

30.0

The accumulated benefit obligation for all defined benefit pension plans was $3,599.5 million and $3,029.0 million as of December 31, 2019 and 2018, respectively.

11. Employee and Agent Benefits – (continued)

Employer contributions to the pension plans include contributions made directly to the qualified pension plan assets and contributions from corporate assets to pay nonqualified pension benefits. Benefits paid from the pension plans include both qualified and nonqualified plan benefits. Nonqualified pension plan assets are not included as part of the asset balances presented in this footnote. The nonqualified pension plan assets are held in Rabbi trusts for the benefit of all nonqualified plan participants. The assets held in a Rabbi trust are available to satisfy the claims of general creditors only in the event of bankruptcy. Therefore, these assets are fully consolidated in our consolidated statements of financial position and are not reflected in our funded status as they do not qualify as plan assets under U.S. GAAP. The market value of assets held in these trusts was $377.8 million and $348.8 million as of December 31, 2019 and 2018, respectively.

Pension Plan Changes and Plan Gains/Losses

During the second quarter of 2019, we amended The Principal Pension Plan and The Principal Financial Group Nonqualified Defined Benefit Plan for Employees to end traditional benefit accruals as of December 31, 2022, and begin cash balance accruals January 1, 2023. We remeasured the associated plan assets and pension benefit obligations as of May 31, 2019, resulting in a net actuarial loss of $59.0 million and a total plan amendment gain of $122.4 million. The net actuarial loss is composed of an increase in benefit obligation of $237.6 million resulting from the reduction in discount rate compared to December 31, 2018, partially offset by a $178.6 million asset gain. The net plan amendment gain was recorded in AOCI and will be amortized over the average future working lifetimes of the plans.

On January 1, 2010, benefits under the Principal Pension Plan were frozen for certain participants. The nonqualified plan was amended January 1, 2019, to change the basis for determining lump sums. This gave rise to a total prior service benefit of $6.4 million as of December 31, 2018. The qualified plan and agent nonqualified plan were amended on December 28, 2017, to freeze final average pay accruals for agents after December 31, 2018, but continue cash balance accruals. This gave rise to a total prior service benefit of $23.1 million as of December 31, 2017. The amendments also freeze plan eligibility for agents under both the qualified and nonqualified plans.

For the year ended December 31, 2019, the pension plans had an actuarial loss primarily due to a decrease in the discount rate. For the year ended December 31, 2018, the pension plans had an actuarial gain primarily due to an increase in the discount rate.

Other Postretirement Plan Changes and Plan Gains/Losses

For the year ended December 31, 2019, the other postretirement benefit plans had an actuarial loss primarily due to a decrease in the discount rate and a gain from actual and projected medical claims cost being lower than expected. For the year ended December 31, 2018, the other postretirement benefit plans had an actuarial gain primarily due to an increase in the discount rate and a gain from actual and projected medical claims cost being lower than expected.

Information for Pension Plans With an Accumulated Benefit Obligation in Excess of Plan Assets

For 2019 and 2018, both the qualified and nonqualified plans had accumulated benefit obligations in excess of plan assets. As noted previously, the nonqualified plans have assets that are deposited in trusts that fail to meet the U.S. GAAP requirements to be included in plan assets; however, these assets are included in our consolidated statements of financial position.

December 31, 

 

    

2019

    

2018

 

(in millions)

 

Projected benefit obligation

$

3,692.1

$

3,239.2

Accumulated benefit obligation

3,599.5

 

3,029.0

Fair value of plan assets

2,926.0

 

2,498.2

11. Employee and Agent Benefits – (continued)

Information for Other Postretirement Benefit Plans With an Accumulated Postretirement Benefit Obligation in Excess of Plan Assets

December 31, 

 

    

2019

    

2018

 

(in millions)

 

Accumulated postretirement benefit obligation

$

3.8

$

2.1

Fair value of plan assets

 

0.2

Components of Net Periodic Benefit Cost

Pension benefits

Other postretirement benefits

 

For the year ended December 31, 

 

    

2019

    

2018

    

2017

    

2019

    

2018

    

2017

   

(in millions)

 

Service cost

$

66.0

$

73.0

$

67.1

$

$

0.1

$

0.1

Interest cost

126.5

 

119.5

 

124.4

3.7

 

3.5

 

3.9

Expected return on plan assets

(148.8)

 

(157.0)

 

(144.2)

(33.2)

 

(33.6)

 

(27.5)

Amortization of prior service benefit

(11.3)

 

(3.4)

 

(2.3)

(1.2)

 

(13.9)

 

(34.6)

Recognized net actuarial (gain) loss

70.1

 

67.8

 

68.0

0.1

 

(1.5)

 

Net periodic benefit cost (income)

$

102.5

$

99.9

$

113.0

$

(30.6)

$

(45.4)

$

(58.1)

The components of net periodic benefit cost including the service cost component are included in operating expenses on the consolidated statements of operations.

The pension plans' actuarial gains and losses are amortized using a straight-line amortization method over the average remaining service period of plan participants. For the qualified pension plan, gains and losses are amortized without use of the 10% allowable corridor. For the nonqualified pension plans and other postretirement benefit plans, the corridors allowed are used.

Pension

Other postretirement

 

benefits

benefits

 

For the year ended December 31, 

 

    

2019

    

2018

    

2019

    

2018

 

(in millions)

 

Other changes recognized in accumulated other comprehensive (income) loss

Net actuarial (gain) loss

$

134.3

$

58.3

$

(57.5)

$

73.4

Prior service (benefit) cost

(122.4)

(6.4)

1.7

Amortization of gain (loss)

(70.1)

 

(67.8)

(0.1)

 

1.5

Amortization of prior service benefit

11.3

 

3.4

1.2

 

13.9

Total recognized in pre-tax accumulated other comprehensive (income) loss

$

(46.9)

$

(12.5)

$

(54.7)

$

88.8

Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss

$

55.6

$

87.4

$

(85.3)

$

43.4

Net actuarial (gain) loss and net prior service cost benefit have been recognized in AOCI.

The estimated net actuarial (gain) loss and prior service cost (benefit) that will be amortized from AOCI into net periodic benefit cost for the pension benefits during the 2020 fiscal year are $75.4 million and $(16.8) million, respectively. The estimated net actuarial (gain) loss and prior service cost (benefit) for the postretirement benefits that will be amortized from AOCI into net periodic benefit cost during the 2020 fiscal year are $(0.1) million and $(0.9) million, respectively.

11. Employee and Agent Benefits – (continued)

Assumptions

Weighted-average assumptions used to determine benefit obligations as disclosed under the Obligations and Funded Status section

Pension benefits

For the year ended December 31, 

     

2019

     

2018

Discount rate

3.25

%  

4.15

%

Rate of compensation increase:

Cash balance benefit

4.95

%  

4.94

%

Traditional benefit

2.98

%  

2.73

%

Other postretirement benefits

For the year ended December 31, 

    

2019

    

2018

Discount rate

2.95

%  

3.95

%

Rate of compensation increase

N/A

N/A

Weighted average assumptions used to determine net periodic benefit cost

Pension benefits

For the year ended December 31, 

    

2019

    

2018

    

2017

Discount rate (1)

3.70

%  

3.60

%  

4.15

%

Expected long-term return on plan assets

5.95

%  

6.30

%  

6.70

%

Rate of compensation increase:

Cash balance benefit

4.94

%  

4.96

%  

5.02

%

Traditional benefit

2.73

%  

2.77

%  

2.82

%

Other postretirement benefits

For the year ended December 31, 

    

2019

    

2018

    

2017

Discount rate

3.95

%  

3.35

%  

3.75

%

Expected long-term return on plan assets

5.19

%  

4.85

%  

4.40

%

Rate of compensation increase

N/A

2.39

%  

2.44

%

(1)During the second quarter of 2019, we amended The Principal Pension Plan and The Principal Financial Group Nonqualified Defined Benefit Plan for Employees to end traditional benefit accruals as of December 31, 2022, and begin cash balance accruals January 1, 2023. We remeasured the associated plan assets and pension benefit obligations as of May 31, 2019. A discount rate of 4.15% was used until the remeasurement date at which time a discount rate of 3.70% was used. See "Pension Plan Changes and Plan Gains/Losses" for further details.

The assumed salary growth rates used to project benefits for the projected benefit obligation are age-based for home office employees.  The rate labeled cash balance benefit (relative to employees accruing a cash balance) is the lifecount-weighted average rate of salary growth in the coming year only, as the impact of salary assumption for cash balance benefits are limited to the upcoming year service cost. The rate labeled traditional benefit (relative to employees still accruing a final average pay benefit) is the lifecount-weighted average (at each age) of the single annual growth rate at the age that is equivalent to applying the scale from that age to assumed termination or retirement ages.

11. Employee and Agent Benefits – (continued)

For the pension benefits, the discount rate is determined by projecting future benefit payments inherent in the projected benefit obligation and discounting those cash flows using a spot yield curve for high quality corporate bonds. The plans’ expected benefit payments are discounted to determine a present value using the yield curve and the discount rate is the level rate that produces the same present value. The expected return on plan assets is the long-term rate we expect to be earned based on the long-term investment policy of the plans and the various classes of invested funds. A weighted average rate was developed based on those overall rates and the target asset allocation of the plans.

For other postretirement benefits, the discount rate is determined by projecting future benefit payments inherent in the accumulated postretirement benefit obligation and discounting those cash flows using a spot yield curve for high quality corporate bonds. The plans’ expected benefit payments are discounted to determine a present value using the yield curve and the discount rate is the level rate that produces the same present value. The 5.19% expected long-term return on plan assets for 2019 was based on the weighted average expected long-term asset returns for the medical, life and long-term care plans. The expected long-term rates for the home office medical/life, agent medical/life, long-term care and post-65 medical plans were 5.25%, 4.95%, 4.35% and 5.00%, respectively.

Assumed Health Care Cost Trend Rates Used to Determine Net Periodic Benefit Cost

December 31, 

 

   

2019

    

2018

Health care cost trend rate assumed for next year under age 65

6.75

%  

7.00

%

Health care cost trend rate assumed for next year age 65 and over

6.00

%  

6.00

%

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)

4.50

%  

4.50

%

Year that the rate reaches the ultimate trend rate (under age 65)

2029

2026

Year that the rate reaches the ultimate trend rate (65 and older)

2026

2025

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

  

1-percentage

1-percentage

 

    

point increase

    

point decrease

 

(in millions)

 

Effect on total of service cost and interest cost components

$

$

Effect on accumulated postretirement benefit obligation

(1.2)

1.1

Pension Plan and Other Postretirement Benefit Plan Assets

Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels.

Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets.
Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset, either directly or indirectly.
Level 3 – Fair values are based on significant unobservable inputs for the asset.

11. Employee and Agent Benefits – (continued)

Our pension plan assets consist of investments in pooled separate accounts and single client separate accounts. Net asset value (“NAV”) of the pooled separate accounts is calculated in a manner consistent with U.S. GAAP for investment companies and is determinative of their fair value. Several of the pooled separate accounts invest in publicly quoted mutual funds or actively managed stocks. The fair value of the underlying mutual funds or stocks is used to determine the NAV of the separate account, which is not publicly quoted. Some of the pooled separate accounts also invest in fixed income securities. The fair value of the underlying securities is based on quoted prices of similar assets and used to determine the NAV of the separate account. Some of the pooled separate accounts invest in real estate properties. The fair value is based on discounted cash flow valuation models that utilize public real estate market data inputs such as transaction prices, market rent growth, vacancy levels, leasing absorption, market capitalization rates and discount rates.

The single client separate accounts invest in fixed income securities, hedge funds, a pooled separate account investment and other assets. The fixed income securities include U.S. Treasury bonds for which the fair value is based on quoted prices of identical assets in active markets. The fair value of the other fixed income securities is determined either from prices obtained from third party pricing vendors who use observable market information to determine prices or from internal models using substantially all observable inputs or a matrix pricing valuation approach. The hedge funds are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. The NAV of the pooled separate account investment is calculated in a manner consistent with U.S. GAAP for investment companies and is determinative of its fair value. The carrying amounts of other assets, which are highly liquid in nature, are used to approximate fair value.

Our other postretirement benefit plan assets consist of cash, investments in fixed income security portfolios, investments in equity security portfolios, investments in alternative mutual fund portfolios and investment in a real estate mutual fund. Because of the nature of cash, its carrying amount approximates fair value. The fair value of fixed income investment funds, U.S. equity portfolios and international equity portfolios is based on quoted prices in active markets for identical assets. The fair value of the alternative mutual fund portfolios and the real estate mutual fund are based on quoted market prices, which represent the NAV of shares held by the other postretirement benefit plan.

11. Employee and Agent Benefits – (continued)

Pension Plan Assets

The fair value of the qualified pension plan’s assets by asset category as of the most recent measurement date was as follows:

December 31, 2019

Assets

Amount

Fair value hierarchy level

measured at

measured at

    

fair value

    

net asset value

    

Level 1

    

Level 2

    

Level 3

(in millions)

Asset category

Pooled separate account investments:

U.S. large cap equity portfolios (1)

$

509.7

$

$

$

509.7

$

U.S. small/mid cap equity portfolios (2)

 

90.9

 

 

90.9

 

Balanced asset portfolios (3)

 

78.5

 

 

78.5

 

International equity portfolios (4)

 

328.6

 

 

328.6

 

Real estate investment portfolios (5)

 

193.5

 

 

193.5

 

Single client separate account investments:

Fixed income securities:

U.S. government and agencies

485.9

485.9

States and political subdivisions

26.1

26.1

Corporate

1,009.1

1,009.1

Commercial mortgage-backed securities

32.7

32.7

Other debt obligations

7.1

7.1

Hedge funds (6)

129.0

129.0

Pooled separate account investment (7)

31.5

31.5

Other (8)

3.4

3.4

Total

$

2,926.0

$

129.0

$

485.9

$

2,311.1

$

December 31, 2018

 

Assets

Amount

Fair value hierarchy level

 

measured at

measured at

 

    

fair value

    

net asset value

    

Level 1

    

Level 2

    

Level 3

 

(in millions)

 

Asset category

Pooled separate account investments:

U.S. large cap equity portfolios (1)

$

387.7

$

$

$

387.7

$

U.S. small/mid cap equity portfolios (2)

 

64.4

 

 

64.4

 

Balanced asset portfolios (3)

 

116.3

 

 

116.3

 

International equity portfolios (4)

 

220.9

 

 

220.9

 

Real estate investment portfolios (5)

 

133.6

133.6

Single client separate account investments:

Fixed income securities:

U.S. government and agencies

418.8

418.8

States and political subdivisions

24.0

24.0

Corporate

934.5

934.5

Commercial mortgage-backed securities

30.7

30.7

Other debt obligations

8.0

8.0

Hedge funds (6)

124.7

124.7

Pooled separate account investment (7)

23.9

23.9

Other (8)

10.7

0.3

10.4

Total

$

2,498.2

$

124.7

$

419.1

$

1,954.4

$

(1)The portfolios invest primarily in publicly traded equity securities of large U.S. companies.
(2)The portfolios invest primarily in publicly traded equity securities of mid-sized and small U.S. companies.

11. Employee and Agent Benefits – (continued)

(3)The portfolios are a combination of underlying fixed income and equity investment options. These investment options may include balanced, asset allocation, target-date and target-risk investment options. Although typically lower risk than investment options that invest solely in equities, all investment options in this category have the potential to lose value.
(4)The portfolios invest primarily in publicly traded equity securities of non-U.S. companies.
(5)The portfolio invests primarily in U.S. commercial real estate properties through a separate account.
(6)The hedge funds have varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these hedge funds.
(7)The single client separate accounts invest in a money market pooled separate account.
(8)Includes cash and net (payables)/receivables for the single client separate accounts.

We have established an investment policy that provides the investment objectives and guidelines for the pension plan. Our investment strategy is to achieve the following:

Obtain a reasonable long-term return consistent with the level of risk assumed and at a cost of operation within prudent levels. Performance benchmarks are monitored.
Ensure sufficient liquidity to meet the emerging benefit liabilities for the plan.
Provide for diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the pension plan consistent with market and economic risk.

In administering the qualified pension plan’s asset allocation strategy, we consider the projected liability stream of benefit payments, the relationship between current and projected assets of the plan and the projected actuarial liabilities streams, the historical performance of capital markets adjusted for the perception of future short- and long-term capital market performance and the perception of future economic conditions.

According to our investment policy, the target asset allocation for the qualified plan is:

Asset category

    

Target allocation

Fixed income security portfolios

25

%

-

80

%

Equity portfolios

5

%

-

60

%

Real estate investment portfolios

10

%

Alternatives

5

%

11. Employee and Agent Benefits – (continued)

Other Postretirement Benefit Plan Assets

The fair value of the other postretirement benefit plans’ assets by asset category as of the most recent measurement date was as follows:

December 31, 2019

Assets

Fair value hierarchy level

measured at

    

fair value

    

Level 1

    

Level 2

    

Level 3

 

(in millions)

Asset category

Cash and cash equivalents

$

0.6

$

0.6

$

$

Fixed income security portfolios:

Fixed income investment funds (1)

 

370.5

 

331.0

 

39.5

 

U.S. equity portfolios (2)

 

254.5

 

210.3

 

44.2

 

International equity portfolios (3)

 

107.2

 

88.9

 

18.3

 

Total

$

732.8

$

630.8

$

102.0

$

December 31, 2018

Assets

Fair value hierarchy level

measured at

    

fair value

    

Level 1

    

Level 2

    

Level 3

 

(in millions)

Asset category

Cash and cash equivalents

$

0.3

$

0.3

$

$

Fixed income security portfolios:

Fixed income investment funds (1)

 

203.7

 

166.2

 

37.5

 

U.S. equity portfolios (2)

 

135.8

 

101.0

 

34.8

 

International equity portfolios (3)

61.2

 

47.4

 

13.8

 

Alternative mutual fund portfolios (4)

 

235.4

235.4

Real estate mutual fund (5)

 

7.5

7.5

Total

$

643.9

$

557.8

$

86.1

$

(1)The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not limited to, corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities, U.S. Treasury securities, agency securities, asset-backed securities and collateralized mortgage obligations.
(2)The portfolios invest primarily in publicly traded equity securities of large U.S. companies.
(3)The portfolios invest primarily in publicly traded equity securities of non-U.S. companies.
(4)The portfolios invest primarily in equities, corporate bonds, foreign currencies, convertible securities and derivatives.
(5)The mutual fund invests primarily in U.S. commercial real estate properties.

As of December 31, 2019 and 2018, $101.8 million and $86.1 million of assets, respectively, in cash, fixed income security portfolios, U.S. equity portfolios and international equity portfolios were included in a trust owned life insurance contract.

The investment strategies for the other postretirement benefit plans are similar to those employed by the qualified pension plan. According to our investment policy, the target asset allocation for the other postretirement benefit plans is:

Asset category

    

Target allocation

U.S. equity portfolios

35

%

International equity portfolios

15

%

Fixed income security portfolios

50

%

11. Employee and Agent Benefits – (continued)

Contributions

Our funding policy for the qualified pension plan is to fund the plan annually in an amount at least equal to the minimum annual contribution required under ERISA and, generally, not greater than the maximum amount that can be deducted for U.S. federal income tax purposes. We do not anticipate contributions will be needed to satisfy the minimum funding requirements of ERISA for our qualified plan. We are unable to estimate the amount that may be contributed, but it is possible that we may fund the plans in 2020 up to $35.0 million. This includes funding for both our qualified and nonqualified pension plans. While we designate assets to cover the computed liability of the nonqualified plan, the assets are not included as part of the asset balances presented in this footnote as they do not qualify as plan assets in accordance with U.S. GAAP. We may contribute to our other postretirement benefit plans in 2020 pending future analysis.

Estimated Future Benefit Payments

The estimated future benefit payments, which reflect expected future service, are:

    

Other postretirement

benefits (gross benefit

payments, including

    

Pension benefits

    

prescription drug benefits)

 

(in millions)

Year ending December 31:

2020

$

164.5

$

14.0

2021

150.1

12.2

2022

161.4

11.5

2023

170.1

10.6

2024

177.9

9.8

2025-2029

1,014.6

37.9

The above table reflects the total estimated future benefits to be paid from the plan, including both our share of the benefit cost and the participants' share of the cost, which is funded by their contributions to the plan.

The assumptions used in calculating the estimated future benefit payments are the same as those used to measure the benefit obligation for the year ended December 31, 2019.

11. Employee and Agent Benefits – (continued)

Defined Benefit Pension Plans Supplemental Information

Certain key summary data is shown below separately for qualified and nonqualified plans.

For the year ended December 31, 

 

2019

2018

 

Qualified

Nonqualified

Qualified

Nonqualified

 

    

Plan

    

Plan

    

Total

    

Plan

    

Plan

    

Total

   

(in millions)

 

Amount recognized in statement of financial position

Other assets

$

$

$

$

$

$

Other liabilities

(258.7)

(507.4)

(766.1)

 

(266.3)

(474.7)

(741.0)

Total

$

(258.7)

$

(507.4)

$

(766.1)

$

(266.3)

$

(474.7)

$

(741.0)

Amount recognized in accumulated other comprehensive loss

Total net actuarial loss

$

567.6

$

169.9

$

737.5

$

544.4

$

128.9

$

673.3

Prior service benefit

(110.3)

(27.5)

(137.8)

 

(11.0)

(15.7)

(26.7)

Pre-tax accumulated other comprehensive loss

$

457.3

$

142.4

$

599.7

$

533.4

$

113.2

$

646.6

Components of net periodic benefit cost

Service cost

$

59.7

$

6.3

$

66.0

$

65.7

$

7.3

$

73.0

Interest cost

108.0

18.5

126.5

 

102.0

17.5

119.5

Expected return on plan assets

(148.8)

(148.8)

 

(157.0)

(157.0)

Amortization of prior service benefit

(7.8)

(3.5)

(11.3)

 

(1.5)

(1.9)

(3.4)

Recognized net actuarial loss

57.6

12.5

70.1

 

53.6

14.2

67.8

Net periodic benefit cost

$

68.7

$

33.8

$

102.5

$

62.8

$

37.1

$

99.9

Other changes recognized in accumulated other comprehensive (income) loss

Net actuarial (gain) loss

$

80.8

$

53.5

$

134.3

$

81.7

$

(23.4)

$

58.3

Prior service benefit

(107.2)

(15.2)

(122.4)

(6.4)

(6.4)

Amortization of net loss

(57.6)

(12.5)

(70.1)

 

(53.6)

(14.2)

(67.8)

Amortization of prior service benefit

7.8

3.5

11.3

 

1.5

1.9

3.4

Total recognized in pre-tax accumulated other comprehensive (income) loss

$

(76.2)

$

29.3

$

(46.9)

$

29.6

$

(42.1)

$

(12.5)

Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss

$

(7.5)

$

63.1

$

55.6

$

92.4

$

(5.0)

$

87.4

Defined Contribution and Deferred Compensation Plans

In addition, we have defined contribution plans that are generally available to all U.S. employees and agents. Eligible participants could not contribute more than $19,000 of their compensation to the plans in 2019. Effective January 1, 2006, we made several changes to the retirement programs. In general, the pension and supplemental executive retirement plan benefit formulas were reduced and the 401(k) matching contribution was increased. Employees who were ages 47 or older with at least ten years of service on December 31, 2005, could elect to retain the prior benefit provisions and forgo receipt of the additional matching contributions. The employees who elected to retain the prior benefit provisions are referred to as “Grandfathered Choice Participants.” We match the Grandfathered Choice Participant's contribution at a 50% contribution rate up to a maximum matching contribution of 3% of the participant's compensation. For all other participants, we match the participant's contributions at a 75% contribution rate up to a maximum matching contribution of 6% of the participant's compensation. The defined contribution plans allow employees to choose among various investment options, including our common stock, which is available through our Employee Stock Ownership Plan (“ESOP”). We contributed $55.3 million, $53.4 million and $48.9 million in 2019, 2018 and 2017, respectively, to our qualified defined contribution plans.

The number of shares of our common stock allocated to participants in the ESOP was 2.2 million and 2.4 million as of December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, the fair value of the ESOP, which includes earned and unearned common stock, was $119.8 million and $105.1 million, respectively. The ESOP’s total assets include our common stock and cash. The ESOP purchases our common stock on the open market. The number of shares of our common stock held within the ESOP is treated as outstanding in both our basic and diluted earnings per share calculations.

11. Employee and Agent Benefits – (continued)

We also have nonqualified deferred compensation plans available to select employees and agents that allow them to defer compensation amounts in excess of limits imposed by U.S. federal tax law with respect to the qualified plans. For certain nonqualified deferred compensation plans that include an employer matching contribution, in 2019 we matched the Grandfathered Choice Participant's deferral at a 50% match deferral rate up to a maximum matching deferral of 3% of the participant's compensation. For all other participants in nonqualified deferred compensation plans that include an employer matching contribution, we matched the participant's deferral at a 75% match deferral rate up to a maximum matching deferral of 6% of the participant's compensation. We contributed $3.2 million, $3.4 million and $3.8 million in 2019, 2018 and 2017, respectively, to our nonqualified deferred compensation plans.

v3.19.3.a.u2
Contingencies, Guarantees, Indemnifications and Leases
12 Months Ended
Dec. 31, 2019
Contingencies, Guarantees, Indemnifications and Leases  
Contingencies, Guarantees, Indemnifications and Leases

12. Contingencies, Guarantees, Indemnifications and Leases

Litigation and Regulatory Contingencies

We are regularly involved in litigation, both as a defendant and as a plaintiff, but primarily as a defendant. Litigation naming us as a defendant ordinarily arises out of our business operations as a provider of asset management and accumulation products and services, individual life insurance, specialty benefits insurance and our investment activities. Some of the lawsuits may be class actions, or purport to be, and some may include claims for unspecified or substantial punitive and treble damages.

We may discuss such litigation in one of three ways. We accrue a charge to income and disclose legal matters for which the chance of loss is probable and for which the amount of loss can be reasonably estimated. We may disclose contingencies for which the chance of loss is reasonably possible and provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. Finally, we may voluntarily disclose loss contingencies for which the chance of loss is remote in order to provide information concerning matters that potentially expose us to possible losses.

In addition, regulatory bodies such as state insurance departments, the SEC, the Financial Industry Regulatory Authority ("FINRA"), the Department of Labor ("DOL") and other regulatory agencies in the U.S. and in international locations in which we do business, regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, ERISA and laws governing the activities of broker-dealers. We receive requests from regulators and other governmental authorities relating to industry issues and may receive additional requests, including subpoenas and interrogatories, in the future.

On November 12, 2014, Frederick Rozo filed a class action lawsuit in the United States District Court for the Southern District of Iowa against Principal Life and us. We were later dismissed as a defendant. The Plaintiff alleged that defendants breached fiduciary duties and engaged in prohibited transactions under ERISA in connection with a general account guaranteed product known as the Principal Fixed Income Option (“PFIO”). On May 12, 2017, the district court certified a nationwide class of participants and beneficiaries who had funds invested in one of the PFIO contracts. On September 25, 2018, the district court granted Principal Life’s motion for summary judgment. On February 3, 2020, the Eighth Circuit Court of Appeals reversed that ruling and remanded the case back to the district court. Principal Life will continue to aggressively defend the case.  

While the outcome of any pending or future litigation or regulatory matter cannot be predicted, management does not believe any such matter will have a material adverse effect on our business or financial position. As of December 31, 2019, we had no estimated loss accrued related to the legal matter discussed above because we believe the chance of loss from this matter is not probable and the amount of loss cannot be reasonably estimated.

To the extent such matters present a reasonably possible chance of loss, we are generally not able to estimate the possible loss or range of loss associated therewith. The outcome of such matters is always uncertain and unforeseen results can occur. It is possible that such outcomes could require us to pay damages or make other expenditures or establish accruals in amounts that we could not estimate at December 31, 2019.

12. Contingencies, Guarantees, Indemnifications and Leases(continued)

Guarantees and Indemnifications

In the normal course of business, we have provided guarantees to third parties primarily related to former subsidiaries and joint ventures. The terms of these agreements range in duration and often are not explicitly defined. The maximum exposure under these agreements as of December 31, 2019, was approximately $118.0 million. At inception, the fair value of such guarantees was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. Should we be required to perform under these guarantees, we generally could recover a portion of the loss from third parties through recourse provisions included in agreements with such parties, the sale of assets held as collateral that can be liquidated in the event performance is required under the guarantees or other recourse generally available to us; therefore, such guarantees would not result in a material adverse effect on our business or financial position. While the likelihood is remote, such outcomes could materially affect net income in a particular quarter or annual period. Furthermore, in connection with our P-Caps contingent funding agreements, we are required to purchase any principal and interest strips of U.S. Treasury securities that are due and not paid from the associated unconsolidated trusts. The maximum exposure under these agreements as of December 31, 2019, was $750.0 million. See Note 9, Debt, for further details.

We manage mandatory privatized social security funds in Chile. By regulation, we have a required minimum guarantee on the funds’ relative return. Because the guarantee has no limitation with respect to duration or amount, the maximum exposure of the guarantee in the future is indeterminable.

We are also subject to various other indemnification obligations issued in conjunction with divestitures, acquisitions and financing transactions whose terms range in duration and often are not explicitly defined. Certain portions of these indemnifications may be capped, while other portions are not subject to such limitations; therefore, the overall maximum amount of the obligation under the indemnifications cannot be reasonably estimated. At inception, the fair value of such indemnifications was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. While we are unable to estimate with certainty the ultimate legal and financial liability with respect to these indemnifications, we believe that performance under these indemnifications would not result in a material adverse effect on our business or financial position. While the likelihood is remote, performance under these indemnifications could materially affect net income in a particular quarter or annual period.

Guaranty Funds

Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for certain obligations of insolvent insurance companies to policyholders and claimants. A state’s fund assesses its members based on their pro rata market share of written premiums in the state for the classes of insurance for which the insolvent insurer was engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. We accrue liabilities for guaranty fund assessments when an assessment is probable, can be reasonably estimated and when the event obligating us to pay has occurred. While we cannot predict the amount and timing of any future assessments, we have established reserves we believe are adequate for assessments relating to insurance companies that are currently subject to insolvency proceedings. As of December 31, 2019 and 2018, the liability balance for guaranty fund assessments, which is not discounted, was $21.7 million and $22.2 million, respectively, and was reported within other liabilities in the consolidated statements of financial position. As of December 31, 2019 and 2018, $10.0 million and $10.4 million, respectively, related to premium tax offsets were included in premiums due and other receivables in the consolidated statements of financial position.

12. Contingencies, Guarantees, Indemnifications and Leases – (continued)

Leases

As a lessee, we lease office space, data processing equipment, office furniture and office equipment under various operating leases. We also lease buildings and hardware storage equipment under finance leases. Lease assets and liabilities are recognized at the commencement of a lease based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. Lease term may include options to extend or terminate the lease when it is reasonably certain we will exercise the option. Leases with an initial term of twelve months or less are not recorded on the consolidated statements of financial position. We recognize lease expense for leases on a straight-line basis over the lease term. Some of our lease agreements include payments for property taxes, insurance, utilities or common area maintenance, which are not based on an index or rate. These payments are recognized in net income in the period in which the obligation has occurred.

We sublease certain office space to third parties, which are primarily operating leases. We record sublease income on a straight-line basis over the lease term.

The lease assets and liabilities were as follows:

December 31, 2019

 

    

(in millions)

 

Assets

 

  

Operating lease assets (1)

$

190.0

Finance lease assets (1)

 

31.4

Total lease assets

$

221.4

Liabilities

 

  

Operating lease liabilities (2)

$

197.5

Finance lease liabilities (2)

 

31.8

Total lease liabilities

$

229.3

(1)Operating and finance lease assets are primarily reported within property and equipment on the consolidated statements of financial position.

(2)

Operating and finance lease liabilities are reported within other liabilities on the consolidated statements of financial position.

As of December 31, 2018, we had capital lease assets of $32.6 million.

The lease cost was as follows:

    

For the year ended

 

December 31, 2019

 

(in millions)

 

Finance lease cost (1):

 

  

Amortization of right-of-use assets

$

14.6

Interest on lease liabilities

 

1.0

Operating lease cost (1)

 

55.8

Other lease cost (1) (2)

 

8.0

Sublease income (3)

 

(1.7)

Total lease cost

$

77.7

(1)

Finance, operating and other lease costs are primarily included in operating expenses on the consolidated statements of operations.

(2)

Other lease cost primarily reflects variable and short-term lease costs.

(3)

Sublease income is included in fees and other revenues on the consolidated statements of operations.

12. Contingencies, Guarantees, Indemnifications and Leases – (continued)

Rental expense for operating leases for the years ended December 31, 2018 and 2017, was $36.7 million and $44.0 million, respectively. Depreciation expense for capital leases for the years ended December 31, 2018 and 2017, was $12.9 million and $13.4 million, respectively.

Payments for operating leases and finance leases for the year ended December 31, 2019, were $56.1 million and $15.1 million, respectively. The following represents future payments due by period for lease obligations:

   

Operating leases

   

Finance leases

   

Total

 

(in millions)

For the twelve months ending December 31:

2020

$

53.9

$

14.8

$

68.7

2021

43.7

11.7

55.4

2022

35.3

3.9

39.2

2023

25.9

1.9

27.8

2024

18.3

0.5

18.8

2025 and thereafter

51.7

0.1

51.8

Total lease payments

228.8

32.9

261.7

Less: interest

31.3

1.1

32.4

Present value of lease liabilities

$

197.5

$

31.8

$

229.3

The weighted-average remaining lease term and weighted-average discount rates were as follows:

    

For the year ended

 

December 31, 2019

Weighted-average remaining lease term (in years):

 

  

Operating leases

 

6.7

Finance leases

 

2.6

Weighted-average discount rate:

 

  

Operating leases

 

3.9

%

Finance leases

 

2.7

%

v3.19.3.a.u2
Stockholders' Equity
12 Months Ended
Dec. 31, 2019
Stockholders' Equity  
Stockholders' Equity

13. Stockholders' Equity

Common Stock Dividends

For the year ended December 31,

    

2019

    

2018

    

2017

 

Dividends declared per common share

$

2.18

$

2.10

$

1.87

Reconciliation of Outstanding Common Shares

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

(in millions)

 

Beginning balance

279.5

289.0

287.7

Shares issued

2.6

2.6

4.9

Treasury stock acquired

(5.5)

(12.1)

(3.6)

Ending balance

276.6

279.5

289.0

13. Stockholders' Equity – (continued)

In February 2016, our Board of Directors authorized a share repurchase program of up to $400.0 million of our outstanding common stock, which was completed in February 2018. In May 2017, our Board of Directors authorized a share repurchase program of up to $250.0 million of our outstanding common stock, which was completed in April 2018. In May 2018, our Board of Directors authorized a share repurchase program of up to $300.0 million of our outstanding common stock, which was completed in December 2018. In November 2018, our Board of Directors authorized a share repurchase program of up to $500.0 million of our outstanding common stock, which has no expiration. Shares repurchased under these programs are accounted for as treasury stock, carried at cost and reflected as a reduction to stockholders’ equity.

Other Comprehensive Income (Loss)

For the year ended December 31, 2019

    

Pre-Tax

    

Tax

    

After-Tax

 

(in millions)

Net unrealized gains on available-for-sale securities during the period

$

4,414.1

$

(947.0)

$

3,467.1

Reclassification adjustment for losses included in net income (1)

 

47.4

 

(9.7)

 

37.7

Adjustments for assumed changes in amortization patterns

 

(293.0)

 

61.5

 

(231.5)

Adjustments for assumed changes in policyholder liabilities

 

(847.7)

 

190.5

 

(657.2)

Net unrealized gains on available-for-sale securities

 

3,320.8

 

(704.7)

 

2,616.1

Noncredit component of impairment losses on fixed maturities, available-for-sale during the period

 

5.2

(1.1)

4.1

Adjustments for assumed changes in amortization patterns

 

(1.4)

0.3

(1.1)

Noncredit component of impairment losses on fixed maturities, available-for-sale (2)

 

3.8

(0.8)

3.0

Net unrealized losses on derivative instruments during the period

 

(0.5)

(0.5)

Reclassification adjustment for gains included in net income (3)

 

(23.9)

4.9

(19.0)

Adjustments for assumed changes in amortization patterns

 

3.1

(0.6)

2.5

Adjustments for assumed changes in policyholder liabilities

 

7.9

(1.9)

6.0

Net unrealized losses on derivative instruments

 

(13.4)

2.4

(11.0)

Foreign currency translation adjustment during the period

(112.3)

7.5

(104.8)

Reclassification adjustment for losses included in net income (4)

26.1

26.1

Foreign currency translation adjustment

 

(86.2)

7.5

(78.7)

Unrecognized postretirement benefit obligation during the period

 

43.6

(8.6)

35.0

Amortization of amounts included in net periodic benefit cost (5)

 

57.7

(15.4)

42.3

Net unrecognized postretirement benefit obligation

 

101.3

(24.0)

77.3

Other comprehensive income

$

3,326.3

$

(719.6)

$

2,606.7

13. Stockholders' Equity – (continued)

For the year ended December 31, 2018

    

Pre-Tax

    

Tax

    

After-Tax

 

(in millions)

Net unrealized losses on available-for-sale securities during the period

$

(2,517.5)

$

515.4

$

(2,002.1)

Reclassification adjustment for losses included in net income (1)

 

56.4

 

(5.3)

 

51.1

Adjustments for assumed changes in amortization patterns

 

185.9

 

(39.1)

 

146.8

Adjustments for assumed changes in policyholder liabilities

 

346.9

 

(72.3)

 

274.6

Net unrealized losses on available-for-sale securities

 

(1,928.3)

 

398.7

 

(1,529.6)

Noncredit component of impairment losses on fixed maturities, available-for-sale during the period

 

39.7

(8.4)

31.3

Adjustments for assumed changes in amortization patterns

 

(5.3)

1.1

(4.2)

Adjustments for assumed changes in policyholder liabilities

(0.8)

0.1

(0.7)

Noncredit component of impairment losses on fixed maturities, available-for-sale (2)

 

33.6

(7.2)

26.4

Net unrealized gains on derivative instruments during the period

 

50.4

(3.4)

47.0

Reclassification adjustment for gains included in net income (3)

 

(40.1)

4.2

(35.9)

Adjustments for assumed changes in amortization patterns

 

0.3

(0.1)

0.2

Adjustments for assumed changes in policyholder liabilities

 

5.7

(1.0)

4.7

Net unrealized gains on derivative instruments

 

16.3

(0.3)

16.0

Foreign currency translation adjustment

 

(303.9)

16.3

(287.6)

Unrecognized postretirement benefit obligation during the period

 

(125.3)

29.4

(95.9)

Amortization of amounts included in net periodic benefit cost (5)

 

49.0

(14.0)

35.0

Net unrecognized postretirement benefit obligation

 

(76.3)

15.4

(60.9)

Other comprehensive loss

$

(2,258.6)

$

422.9

$

(1,835.7)

13. Stockholders' Equity – (continued)

For the year ended December 31, 2017

    

Pre-Tax

    

Tax

    

After-Tax

 

(in millions)

Net unrealized gains on available-for-sale securities during the period

$

1,074.2

$

(341.6)

$

732.6

Reclassification adjustment for losses included in net income (1)

 

67.8

 

(23.5)

 

44.3

Adjustments for assumed changes in amortization patterns

 

(26.2)

 

9.3

 

(16.9)

Adjustments for assumed changes in policyholder liabilities

 

(184.6)

 

64.1

 

(120.5)

Net unrealized gains on available-for-sale securities

 

931.2

 

(291.7)

 

639.5

Noncredit component of impairment losses on fixed maturities, available-for-sale during the period

 

53.1

(17.0)

36.1

Adjustments for assumed changes in amortization patterns

 

(6.4)

2.3

(4.1)

Adjustments for assumed changes in policyholder liabilities

(1.3)

0.5

(0.8)

Noncredit component of impairment losses on fixed maturities, available-for-sale (2)

 

45.4

(14.2)

31.2

Net unrealized losses on derivative instruments during the period

 

(46.7)

16.0

(30.7)

Reclassification adjustment for gains included in net income (3)

 

(31.6)

10.8

(20.8)

Adjustments for assumed changes in amortization patterns

 

3.9

(1.3)

2.6

Adjustments for assumed changes in policyholder liabilities

 

9.6

(3.3)

6.3

Net unrealized losses on derivative instruments

 

(64.8)

22.2

(42.6)

Foreign currency translation adjustment during the period

 

171.6

4.7

176.3

Reclassification adjustment for losses included in net income (4)

2.6

2.6

Foreign currency translation adjustment

174.2

4.7

178.9

Unrecognized postretirement benefit obligation during the period

 

24.0

(3.8)

20.2

Amortization of amounts included in net periodic benefit cost (5)

 

31.1

(14.0)

17.1

Net unrecognized postretirement benefit obligation

 

55.1

(17.8)

37.3

Other comprehensive income

$

1,141.1

$

(296.8)

$

844.3

(1)Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations.
(2)Represents the net impact of (1) unrealized gains resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold and (2) unrealized losses resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI.
(3)See Note 5, Derivative Financial Instruments – Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations, for further details.
(4)Pre-tax reclassification adjustments primarily relate to deconsolidated sponsored investment funds and are reported in net realized capital gains (losses) on the consolidated statements of operations. For the years ended December 31, 2019 and 2017, $5.7 million and $2.0 million, respectively, of the reclassification relates to noncontrolling interest and is reported in net income attributable to noncontrolling interest on the consolidated statements of operations.
(5)Amount is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of operations. See Note 11, Employee and Agent Benefits – Components of Net Periodic Benefit Cost, for further details.

13. Stockholders' Equity – (continued)

Accumulated Other Comprehensive Income (Loss)

Noncredit

Net unrealized

component of

Net unrealized

Foreign

Unrecognized

Accumulated

gains on

impairment losses

gains

currency

postretirement

other

available-for-sale

on fixed maturities

on derivative

translation

benefit

comprehensive

   

securities

   

available-for-sale

   

instruments

   

adjustment

   

obligation

   

income (loss)

   

(in millions)

Balances as of January 1, 2017

$

831.2

$

(89.5)

$

85.3

$

(1,093.8)

$

(408.4)

$

(675.2)

Other comprehensive income during the period, net of adjustments

 

595.2

 

 

(21.8)

 

174.7

 

20.2

 

768.3

Amounts reclassified from AOCI

 

44.3

 

31.2

 

(20.8)

 

0.6

 

17.1

 

72.4

Other comprehensive income

 

639.5

 

31.2

 

(42.6)

 

175.3

 

37.3

 

840.7

Balances as of December 31, 2017

1,470.7

(58.3)

42.7

(918.5)

(371.1)

165.5

Other comprehensive loss during the period, net of adjustments

 

(1,580.6)

 

 

51.9

 

(283.2)

 

(95.9)

 

(1,907.8)

Amounts reclassified from AOCI

 

51.1

 

26.4

 

(35.9)

 

 

35.0

 

76.6

Other comprehensive loss

 

(1,529.5)

26.4

16.0

(283.2)

(60.9)

(1,831.2)

Purchase of subsidiary shares from noncontrolling interest

(1.6)

(1.6)

Effects of implementation of accounting change related to equity investments, net

(1.0)

(1.0)

Effects of implementation of accounting change accounting change related to revenue recognition, net

25.6

25.6

Effects of implementation of accounting change related to the reclassification of certain tax effects, net

249.8

(15.2)

5.7

(81.8)

(80.9)

77.6

Balances as of December 31, 2018

190.0

(47.1)

64.4

(1,259.5)

(512.9)

(1,565.1)

Other comprehensive income during the period, net of adjustments

2,578.3

8.0

(102.7)

35.0

2,518.6

Amounts reclassified from AOCI

37.7

3.0

(19.0)

20.4

42.3

84.4

Other comprehensive income

2,616.0

3.0

(11.0)

(82.3)

77.3

2,603.0

Balances as of December 31, 2019

$

2,806.0

$

(44.1)

$

53.4

$

(1,341.8)

$

(435.6)

$

1,037.9

Noncontrolling Interest

Interests held by unaffiliated parties in consolidated entities are reflected in noncontrolling interest, which represents the noncontrolling partners’ share of the underlying net assets of our consolidated subsidiaries. Noncontrolling interest that is not redeemable is reported in the equity section of the consolidated statements of financial position.

The noncontrolling interest holders in certain of our consolidated entities maintain an equity interest that is redeemable at the option of the holder, which may be exercised on varying dates. Since redemption of the noncontrolling interest is outside of our control, this interest is excluded from stockholders’ equity and reported separately as redeemable noncontrolling interest on the consolidated statements of financial position. Our redeemable noncontrolling interest primarily relates to consolidated sponsored investment funds for which interests are redeemed at fair value from the net assets of the funds.

For our redeemable noncontrolling interest related to other consolidated subsidiaries, redemptions are required to be purchased at fair value or a value based on a formula that management intended to reasonably approximate fair value based on a fixed multiple of earnings over a measurement period. The carrying value of the redeemable noncontrolling interest is compared to the redemption value at each reporting period. Any adjustments to the carrying amount of the redeemable noncontrolling interest for changes in redemption value prior to exercise of the redemption option are determined after the attribution of net income or loss of the subsidiary and are recognized in the redemption value as they occur. Adjustments to the carrying value of redeemable noncontrolling interest result in adjustments to additional paid-in capital and/or retained earnings. Adjustments are recorded in retained earnings to the extent the redemption value of the redeemable noncontrolling interest exceeds its fair value and will impact the numerator in our earnings per share calculations. All other adjustments to the redeemable noncontrolling interest are recorded in additional paid-in capital.

13. Stockholders' Equity – (continued)

Following is a reconciliation of the changes in the redeemable noncontrolling interest (in millions):

For the year ended December 31,

   

2019

   

2018

   

2017

 

(in millions)

Beginning balance

$

391.2

$

101.3

$

97.5

Net income (loss) attributable to redeemable noncontrolling interest

33.6

(2.1)

7.0

Redeemable noncontrolling interest of deconsolidated entities (1)

(505.4)

(10.6)

(61.1)

Contributions from redeemable noncontrolling interest

 

402.1

 

355.0

 

94.1

Distributions to redeemable noncontrolling interest

 

(66.3)

 

(36.8)

 

(39.0)

Purchase of subsidiary shares from redeemable noncontrolling interest

 

(1.1)

 

(7.1)

 

(4.4)

Change in redemption value of redeemable noncontrolling interest

 

5.4

 

(7.0)

 

5.9

Stock-based compensation attributable to redeemable noncontrolling interest

0.1

0.1

Other comprehensive income (loss) attributable to redeemable noncontrolling interest

 

5.3

 

(1.6)

 

1.3

Ending balance

$

264.9

$

391.2

$

101.3

(1)We deconsolidated certain sponsored investment funds as they no longer met the requirements for consolidation.

Dividend Limitations

The declaration and payment of our common stock dividends is subject to the discretion of our Board of Directors and will depend on our overall financial condition, results of operations, capital levels, cash requirements, future prospects, receipt of dividends from Principal Life (as described below), risk management considerations and other factors deemed relevant by the Board. No significant restrictions limit the payment of dividends by us, except those generally applicable to corporations incorporated in Delaware.

Under Iowa law, we may pay dividends only from the earned surplus arising from our business and must receive the prior approval of the Commissioner of Insurance of the State of Iowa (“the Commissioner”) to pay stockholder dividends or make any other distribution if such distribution would exceed certain statutory limitations. Iowa law gives the Commissioner discretion to disapprove requests for distributions in excess of these limitations. Extraordinary dividends include those made, together with dividends and other distributions, within the preceding twelve months that exceed the greater of (i) 10% of our statutory policyholder surplus as of the previous year-end or (ii) the statutory net gain from operations from the previous calendar year, not to exceed earned surplus. Based on this limitation and 2019 statutory results, Principal Life could pay approximately $1,060.3 million in ordinary stockholder dividends in 2020 without prior regulatory approval. However, because the dividend test is based on dividends previously paid over rolling 12-month periods, if paid before a specified date during 2020, some or all of such dividends may be extraordinary and require regulatory approval.

On May 1, 2017, Principal Life sold its ownership interest in Principal Global Investors, LLC to Principal Life's direct parent, Principal Financial Services, Inc. in connection with a corporate reorganization designed to better utilize and allocate capital internally. Subsequent to the sale, Principal Life paid an extraordinary dividend of $1,068.4 million to its parent, which was approved by the Commissioner, primarily from proceeds received from the sale.

v3.19.3.a.u2
Fair Value Measurements
12 Months Ended
Dec. 31, 2019
Fair Value Measurements  
Fair Value Measurements

14. Fair Value Measurements

We use fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, particularly policyholder liabilities other than investment contracts, are excluded from these fair value disclosure requirements.

14. Fair Value Measurements – (continued)

Valuation Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety considering factors specific to the asset or liability.

Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 – Fair values are based on at least one significant unobservable input for the asset or liability.

Determination of Fair Value

The following discussion describes the valuation methodologies and inputs used for assets and liabilities measured at fair value on a recurring basis or disclosed at fair value. The techniques utilized in estimating the fair value of financial instruments are reliant on the assumptions used. Care should be exercised in deriving conclusions about our business, its value or financial position based on the fair value information of financial instruments presented below.

Fair value estimates are made based on available market information and judgments about the financial instrument at a specific point in time. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. We validate prices through an investment analyst review process, which includes validation through direct interaction with external sources, review of recent trade activity or use of internal models. In circumstances where broker quotes are used to value an instrument, we generally receive one non-binding quote. Broker quotes are validated through an investment analyst review process, which includes validation through direct interaction with external sources and use of internal models or other relevant information.  We did not make any significant changes to our valuation processes during 2019.

Fixed Maturities

Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities. When available, the fair value of fixed maturities is based on quoted prices of identical assets in active markets. These are reflected in Level 1 and primarily include U.S. Treasury bonds and actively traded redeemable corporate preferred securities.  

When quoted prices of identical assets in active markets are not available, our first priority is to obtain prices from third party pricing vendors. We have regular interaction with these vendors to ensure we understand their pricing methodologies and to confirm they are utilizing observable market information. Their methodologies vary by asset class and include inputs such as estimated cash flows, benchmark yields, reported trades, broker quotes, credit quality, industry events and economic events. Fixed maturities with validated prices from pricing services, which includes the majority of our public fixed maturities in all asset classes, are generally reflected in Level 2. Also included in Level 2 are corporate bonds when quoted market prices are not available, for which an internal model using substantially all observable inputs or a matrix pricing valuation approach is used. In the matrix approach, securities are grouped into pricing categories that vary by sector, rating and average life. Each pricing category is assigned a risk spread based on studies of observable public market data from the investment professionals assigned to specific security classes. The expected cash flows of the security are then discounted back at the current Treasury curve plus the appropriate risk spread. Although the matrix valuation approach provides a fair valuation of each pricing category, the valuation of an individual security within each pricing category may also be impacted by company specific factors.

14. Fair Value Measurements – (continued)

If we are unable to price a fixed maturity security using prices from third party pricing vendors or other sources specific to the asset class, we may obtain a broker quote or utilize an internal pricing model specific to the asset utilizing relevant market information, to the extent available and where at least one significant unobservable input is utilized. These are reflected in Level 3 in the fair value hierarchy and can include fixed maturities across all asset classes. As of December 31, 2019, less than 1% of our total fixed maturities were Level 3 securities valued using internal pricing models.

The primary inputs, by asset class, for valuations of the majority of our Level 2 investments from third party pricing vendors or our internal pricing valuation approach are described below.

U.S. Government and Agencies/Non-U.S. Governments. Inputs include recently executed market transactions, interest rate yield curves, maturity dates, market price quotations and credit spreads relating to similar instruments.

States and Political Subdivisions. Inputs include Municipal Securities Rulemaking Board reported trades, U.S. Treasury and other benchmark curves, material event notices, new issue data and obligor credit ratings.

Corporate. Inputs include recently executed transactions, market price quotations, benchmark yields, issuer spreads and observations of equity and credit default swap curves related to the issuer. For private placement corporate securities valued through the matrix valuation approach inputs include the current Treasury curve and risk spreads based on sector, rating and average life of the issuance.

RMBS, CMBS, Collateralized Debt Obligations and Other Debt Obligations. Inputs include cash flows, priority of the tranche in the capital structure, expected time to maturity for the specific tranche, reinvestment period remaining and performance of the underlying collateral including prepayments, defaults, deferrals, loss severity of defaulted collateral and, for RMBS, prepayment speed assumptions. Other inputs include market indices and recently executed market transactions.

Equity Securities

Equity securities include mutual funds, common stock, non-redeemable preferred stock and required regulatory investments. Fair values of equity securities are determined using quoted prices in active markets for identical assets when available, which are reflected in Level 1. When quoted prices are not available, we may utilize internal valuation methodologies appropriate for the specific asset that use observable inputs such as underlying share prices or the NAV, which are reflected in Level 2. Fair values might also be determined using broker quotes or through the use of internal models or analysis that incorporate significant assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities, which are reflected in Level 3. 

Derivatives

The fair values of exchange-traded derivatives are determined through quoted market prices, which are reflected in Level 1. Exchange-traded derivatives include futures that are settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of OTC cleared derivatives are determined through market prices published by the clearinghouses, which are reflected in Level 2. The clearinghouses may utilize the overnight indexed swap (“OIS”) curve in their valuation. Variation margin associated with OTC cleared derivatives is settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of bilateral OTC derivative instruments are determined using either pricing valuation models that utilize market observable inputs or broker quotes. The majority of our bilateral OTC derivatives are valued with models that use market observable inputs, which are reflected in Level 2. Significant inputs include contractual terms, interest rates, currency exchange rates, credit spread curves, equity prices and volatilities. These valuation models consider projected discounted cash flows, relevant swap curves and appropriate implied volatilities. Certain bilateral OTC derivatives utilize unobservable market data, primarily independent broker quotes that are nonbinding quotes based on models that do not reflect the result of market transactions, which are reflected in Level 3.

14. Fair Value Measurements – (continued)

Our non-cleared derivative contracts are generally documented under ISDA Master Agreements, which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Collateral arrangements are bilateral and based on current ratings of each entity. We utilize the LIBOR interest rate curve to value our positions, which includes a credit spread. This credit spread incorporates an appropriate level of nonperformance risk into our valuations given the current ratings of our counterparties, as well as the collateral agreements in place. Counterparty credit risk is routinely monitored to ensure our adjustment for non-performance risk is appropriate. Our centrally cleared derivative contracts are conducted with regulated centralized clearinghouses, which provide for daily exchange of cash collateral or variation margin equal to the difference in the daily market values of those contracts that eliminates the non-performance risk on these trades.

Interest Rate Contracts. For non-cleared contracts we use discounted cash flow valuation techniques to determine the fair value of interest rate swaps and swaptions using observable swap curves as the inputs. These are reflected in Level 2. For centrally cleared contracts we use published prices from clearinghouses. These are reflected in Level 2. In addition, we have interest rate options and have had swaptions that are valued using broker quotes. These are reflected in Level 3.

Foreign Exchange Contracts. We use discounted cash flow valuation techniques that utilize observable swap curves and exchange rates as the inputs to determine the fair value of foreign currency swaps. These are reflected in Level 2. Currency forwards and currency options are valued using observable market inputs, including forward currency exchange rates. These are reflected in Level 2. In addition, we have a limited number of non-standard currency swaps and currency options that are valued using broker quotes. These are reflected within Level 3.

Equity Contracts. We use an option pricing model using observable implied volatilities, dividend yields, index prices and swap curves as the inputs to determine the fair value of equity options. These are reflected in Level 2.

Credit Contracts. We use either the ISDA Credit Default Swap Standard discounted cash flow model that utilizes observable default probabilities and recovery rates as inputs or broker prices to determine the fair value of credit default swaps. These are reflected in Level 3.

Other Investments

Other investments reported at fair value include invested assets of consolidated sponsored investment funds, unconsolidated sponsored investment funds, other investment funds reported at fair value, commercial mortgage loans of consolidated VIEs for which the fair value option was elected, equity method real estate investments for which the fair value option was elected and certain redeemable and nonredeemable preferred stock. In addition, in 2017 we had other investment funds for which the fair value option was elected.

Invested assets of consolidated sponsored investment funds include equity securities, fixed maturities and other investments, for which fair values are determined as previously described, and are reflected in Level 1 and Level 2.

The fair value of unconsolidated sponsored investment funds and other investment funds is determined using the NAV of the fund. The NAV of the fund represents the price at which we would be able to initiate a transaction. Investments for which the NAV represents a quoted price in an active market for identical assets are reflected in Level 1. Investments that do not have a quoted price in an active market are reflected in Level 2.

Commercial mortgage loans of a consolidated VIE were valued using the more observable fair value of the liabilities of the consolidated collateralized financing entity (“CCFE”) under the measurement alternative guidance and were reflected in Level 2. The liabilities were affiliated so were not reflected in our consolidated results. The trust was unwound in the third quarter of 2019.

14. Fair Value Measurements – (continued)

Equity method real estate investments for which the fair value option was elected are reflected in Level 3. The equity method real estate investments consist of underlying real estate and debt. The real estate fair value is estimated using a discounted cash flow valuation model that utilizes public real estate market data inputs such as transaction prices, market rents, vacancy levels, leasing absorption, market cap rates and discount rates. The debt fair value is estimated using a discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements.

The fair value of certain redeemable and nonredeemable  preferred stock is based on an internal model using unobservable inputs, which is reflected in Level 3. In 2018, the fair value of redeemable preferred stock was based on observable inputs and was reflected in Level 2.

Cash Equivalents

Certain cash equivalents are reported at fair value on a recurring basis and include money market instruments and other short-term investments with maturities of three months or less. Fair values of these cash equivalents may be determined using public quotations, when available, which are reflected in Level 1. When public quotations are not available, because of the highly liquid nature of these assets, carrying amounts may be used to approximate fair values, which are reflected in Level 2.

Separate Account Assets

Separate account assets include equity securities, debt securities, cash equivalents and derivative instruments, for which fair values are determined as previously described, and are reflected in Level 1, Level 2 and Level 3. Separate account assets also include commercial mortgage loans, for which the fair value is estimated by discounting the expected total cash flows using market rates that are applicable to the yield, credit quality and maturity of the loans. The market clearing spreads vary based on mortgage type, weighted average life, rating and liquidity. These are reflected in Level 3. Finally, separate account assets include real estate, for which the fair value is estimated using discounted cash flow valuation models that utilize various public real estate market data inputs. In addition, each property is appraised annually by an independent appraiser. The real estate included in separate account assets is recorded net of related mortgage encumbrances for which the fair value is estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. The real estate within the separate accounts is reflected in Level 3.

Investment and Universal Life Contracts

Certain universal life, annuity and other investment contracts include embedded derivatives that have been bifurcated from the host contract and are measured at fair value on a recurring basis, which are reflected in Level 3. The key assumptions for calculating the fair value of the embedded derivative liabilities are market assumptions (such as equity market returns, interest rate levels, market volatility and correlations) and policyholder behavior assumptions (such as lapse, mortality, utilization and withdrawal patterns). Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The embedded derivative liabilities are valued using models that incorporate a spread reflecting our own creditworthiness.

The assumption for our own non-performance risk for investment contracts and any embedded derivatives bifurcated from certain universal life, annuity and investment contracts is based on the current market credit spreads for debt-like instruments we have issued and are available in the market.

Other Liabilities

Certain obligations reported in other liabilities include embedded derivatives to deliver underlying securities of structured investments to third parties. The fair value of the embedded derivatives is calculated based on the value of the underlying securities that are valued based on prices obtained from third party pricing vendors as utilized and described in our discussion of how fair value is determined for fixed maturities, which are reflected in Level 2.

14. Fair Value Measurements – (continued)

Certain obligations of consolidated VIEs for which the fair value option was elected were included in other liabilities. The synthetic entity that had these obligations matured in the first quarter of 2017. The VIEs' unaffiliated obligations were valued utilizing internal pricing models, which were reflected in Level 3.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis were as follows:

December 31, 2019

Assets/

Amount

(liabilities)

measured at

Fair value hierarchy level

measured at

net asset

    

fair value

    

value (4)

    

Level 1

    

Level 2

    

Level 3

   

(in millions)

Assets

Fixed maturities, available-for-sale:

U.S. government and agencies

$

1,724.2

$

$

1,320.0

$

404.2

$

Non-U.S. governments

 

996.2

 

1.4

 

994.8

 

States and political subdivisions

 

7,490.0

 

 

7,490.0

 

Corporate

 

40,647.4

 

18.5

 

40,547.2

 

81.7

Residential mortgage-backed securities

 

2,982.4

 

 

2,982.4

 

Commercial mortgage-backed securities

 

4,850.2

 

 

4,837.3

 

12.9

Collateralized debt obligations (1)

 

3,215.3

 

 

3,016.3

 

199.0

Other debt obligations

 

8,200.5

 

 

8,109.2

 

91.3

Total fixed maturities, available-for-sale

 

70,106.2

 

1,339.9

 

68,381.4

 

384.9

Fixed maturities, trading

 

675.9

 

0.5

 

675.1

 

0.3

Equity securities

 

1,879.4

 

645.8

 

1,233.6

 

Derivative assets (2)

 

294.7

 

 

265.4

 

29.3

Other investments

 

796.0

78.3

 

335.2

 

343.5

 

39.0

Cash equivalents

 

1,299.0

 

40.9

 

1,258.1

 

Sub-total excluding separate account assets

 

75,051.2

78.3

 

2,362.3

 

72,157.1

 

453.5

Separate account assets

 

165,468.0

129.0

 

95,652.5

 

60,718.5

 

8,968.0

Total assets

$

240,519.2

$

207.3

$

98,014.8

$

132,875.6

$

9,421.5

Liabilities

Investment and universal life contracts (3)

$

(214.2)

$

$

$

$

(214.2)

Derivative liabilities (2)

(217.7)

(201.4)

(16.3)

Other liabilities (3)

 

(98.9)

 

 

(98.9)

 

Total liabilities

$

(530.8)

$

$

$

(300.3)

$

(230.5)

Net assets

$

239,988.4

$

207.3

$

98,014.8

$

132,575.3

$

9,191.0

14. Fair Value Measurements – (continued)

December 31, 2018

Assets/

Amount

(liabilities)

measured at

Fair value hierarchy level

measured at

net asset

    

fair value

    

value (4)

    

Level 1

    

Level 2

    

Level 3

   

(in millions)

Assets

Fixed maturities, available-for-sale:

U.S. government and agencies

$

1,441.0

$

$

1,027.8

$

413.2

$

Non-U.S. governments

 

890.5

 

2.7

 

883.2

 

4.6

States and political subdivisions

 

6,225.7

 

 

6,225.7

 

Corporate

 

35,539.3

 

19.2

 

35,462.2

 

57.9

Residential mortgage-backed securities

 

2,460.6

 

 

2,460.6

 

Commercial mortgage-backed securities

 

3,945.6

 

 

3,936.1

 

9.5

Collateralized debt obligations (1)

 

2,420.8

 

 

2,412.5

 

8.3

Other debt obligations

 

7,185.0

 

 

7,126.5

 

58.5

Total fixed maturities, available-for-sale

 

60,108.5

 

1,049.7

 

58,920.0

 

138.8

Fixed maturities, trading

 

636.1

 

 

636.1

 

Equity securities

 

1,843.7

 

661.2

 

1,182.5

 

Derivative assets (2)

 

194.0

 

 

175.4

 

18.6

Other investments

 

828.6

75.4

 

125.9

 

610.1

 

17.2

Cash equivalents

1,775.9

46.3

1,729.6

Sub-total excluding separate account assets

 

65,386.8

75.4

 

1,883.1

 

63,253.7

 

174.6

Separate account assets

 

144,987.9

124.6

 

79,572.0

 

56,675.8

 

8,615.5

Total assets

$

210,374.7

$

200.0

$

81,455.1

$

119,929.5

$

8,790.1

Liabilities

Investment and universal life contracts (3)

$

(45.2)

$

$

$

$

(45.2)

Derivative liabilities (2)

(157.1)

(141.6)

(15.5)

Other liabilities (3)

 

(91.5)

 

 

(91.5)

 

Total liabilities

$

(293.8)

$

$

$

(233.1)

$

(60.7)

Net assets

$

210,080.9

$

200.0

$

81,455.1

$

119,696.4

$

8,729.4

(1)Primarily consists of collateralized loan obligations backed by secured corporate loans.
(2)Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes in Level 3 Fair Value Measurements tables. Refer to Note 5, Derivative Financial Instruments, for further information on fair value by class of derivative instruments.
(3)Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported.
(4)Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $19.9 million and $32.0 million as of December 31, 2019 and December 31, 2018, respectively. Separate account assets using the NAV practical expedient consist of hedge funds with varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these hedge funds.

14. Fair Value Measurements – (continued)

Changes in Level 3 Fair Value Measurements

The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows:

For the year ended December 31, 2019

Total realized/unrealized

gains (losses)

Changes in

Beginning

unrealized

asset/

Net

Ending

gains (losses)

(liability)

purchases,

asset/

included in

balance

Included

Included in

sales,

(liability)

net income

as of

in net

other

issuances

Transfers

Transfers

balance as of

relating to

January 1,

income

comprehensive

and

into

out of

December 31, 

positions

   

2019

   

(1)

   

income (3)

   

settlements (4)

   

Level 3

   

Level 3

   

2019

   

still held (1)

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

4.6

$

$

$

(4.6)

$

$

$

$

Corporate

 

57.9

 

 

2.5

17.2

 

4.1

 

 

81.7

 

Commercial mortgage-backed securities

 

9.5

 

(3.8)

 

3.4

2.4

 

3.7

 

(2.3)

 

12.9

 

(2.9)

Collateralized debt obligations

 

8.3

 

(2.6)

 

0.9

122.5

 

69.9

 

 

199.0

 

(2.6)

Other debt obligations

 

58.5

 

 

0.8

100.0

 

8.3

 

(76.3)

 

91.3

 

Total fixed maturities, available-for-sale

 

138.8

 

(6.4)

 

7.6

237.5

 

86.0

 

(78.6)

 

384.9

 

(5.5)

Fixed maturities, trading

0.3

0.3

Other investments

 

17.2

 

6.0

 

5.8

 

10.0

 

 

39.0

 

6.0

Separate account assets (2)

 

8,615.5

 

739.9

 

(214.2)

 

 

(173.2)

 

8,968.0

 

697.1

Liabilities

Investment and universal life contracts

 

(45.2)

 

(145.5)

 

(0.2)

(23.3)

 

 

 

(214.2)

 

(146.0)

Derivatives

 

 

 

 

 

 

Net derivative assets (liabilities)

 

3.1

 

(0.8)

 

10.7

 

 

13.0

 

5.3

For the year ended December 31, 2018

Total realized/unrealized

gains (losses)

Changes in

Beginning

unrealized

asset/

Ending

gains (losses)

(liability)

Net purchases,

asset/

included in

balance

Included in

sales,

(liability)

net income

as of

Included

other

issuances

Transfers

Transfers

balance as of

relating to

January 1,

in net

comprehensive

and

into

out of

December 31, 

positions

   

2018

   

income (1)

   

income (3)

   

settlements (4)

   

Level 3

   

Level 3

   

2018

   

still held (1)

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

7.4

$

$

(0.1)

$

(1.4)

$

$

(1.3)

$

4.6

$

Corporate

 

128.0

 

(1.0)

 

(0.1)

(15.2)

 

1.0

 

(54.8)

 

57.9

 

Commercial mortgage-backed securities

 

10.6

 

(3.5)

 

0.2

0.1

 

3.6

 

(1.5)

 

9.5

 

(1.9)

Collateralized debt obligations

 

125.0

 

(0.9)

 

0.2

66.3

 

54.7

 

(237.0)

 

8.3

 

(0.9)

Other debt obligations

 

2.3

 

 

(0.2)

147.4

 

 

(91.0)

 

58.5

 

Total fixed maturities, available-for-sale

 

273.3

 

(5.4)

 

197.2

 

59.3

 

(385.6)

 

138.8

 

(2.8)

Fixed maturities, trading

 

 

 

3.7

 

 

(3.7)

 

 

Equity securities

 

2.7

 

12.9

 

(15.6)

 

 

 

 

Other investments

 

6.5

 

1.7

 

9.0

 

 

 

17.2

 

1.7

Separate account assets (2)

 

7,651.4

 

869.5

 

(0.3)

133.7

 

2.3

 

(41.1)

 

8,615.5

 

829.8

Liabilities

Investment and universal life contracts

 

(160.3)

 

107.5

 

0.1

7.5

 

 

 

(45.2)

 

109.9

Derivatives

Net derivative assets (liabilities)

18.1

(20.2)

5.2

3.1

(18.4)

14. Fair Value Measurements – (continued)

For the year ended December 31, 2017

Total realized/unrealized

gains (losses)

Changes in

Beginning

unrealized

asset/

Ending

gains (losses)

(liability)

Net purchases,

asset/

included in

balance

Included in

sales,

(liability)

net income

as of

Included

other

issuances

Transfers

Transfers

balance as of

relating to

January 1,

in net

comprehensive

and

into

out of

December 31, 

positions

   

2017

   

income (1)

   

income (3)

   

settlements (4)

   

Level 3

   

Level 3

   

2017

   

still held (1)

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

62.1

$

(0.2)

$

(0.3)

$

(19.0)

$

$

(35.2)

$

7.4

$

(0.3)

Corporate

 

259.1

 

(2.3)

 

3.5

(29.2)

 

22.2

 

(125.3)

 

128.0

 

(0.8)

Commercial mortgage-backed securities

 

71.1

 

(12.7)

 

11.1

(0.7)

 

26.3

 

(84.5)

 

10.6

 

(4.0)

Collateralized debt obligations

 

33.6

 

 

1.7

7.3

 

183.7

 

(101.3)

 

125.0

 

Other debt obligations

 

91.5

 

 

(0.2)

(0.8)

 

0.1

 

(88.3)

 

2.3

 

Total fixed maturities, available-for-sale

 

517.4

 

(15.2)

 

15.8

(42.4)

 

232.3

 

(434.6)

 

273.3

 

(5.1)

Fixed maturities, trading

 

92.9

 

(2.4)

 

(92.4)

 

1.9

 

 

 

Equity securities, available-for-sale

 

2.7

 

 

 

 

 

2.7

 

Equity securities, trading

(0.7)

0.7

Other investments

 

36.9

 

3.9

 

(34.3)

 

 

 

6.5

 

3.8

Separate account assets (2)

 

7,354.8

 

798.1

 

(1.1)

(464.8)

 

3.1

 

(38.7)

 

7,651.4

 

696.0

Liabilities

Investment and universal life contracts

 

(176.5)

 

8.4

 

0.4

7.4

 

 

 

(160.3)

 

5.7

Other liabilities

 

(59.9)

 

(0.1)

 

60.0

 

 

 

 

Derivatives

Net derivative assets (liabilities)

11.3

3.1

3.7

18.1

4.9

(1)Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses) within the consolidated statements of operations. Realized and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market changes are reported in net investment income within the consolidated statements of operations.
(2)Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. Foreign currency translation adjustments related to the Principal International segment separate account assets are recorded in AOCI and are offset by foreign currency translation adjustments of the corresponding separate account liabilities.
(3)Includes foreign currency translation adjustments related to our Principal International segment.
(4)Gross purchases, sales, issuances and settlements were:

14. Fair Value Measurements – (continued)

For the year ended December 31, 2019

Net purchases,

sales, issuances

    

Purchases

    

Sales

    

Issuances

    

Settlements

    

and settlements

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

$

$

$

(4.6)

$

(4.6)

Corporate

 

41.9

 

(1.4)

 

 

(23.3)

 

17.2

Commercial mortgage-backed securities

 

2.4

 

 

 

 

2.4

Collateralized debt obligations

 

124.7

 

 

 

(2.2)

 

122.5

Other debt obligations

 

107.7

 

 

 

(7.7)

 

100.0

Total fixed maturities, available-for-sale

 

276.7

 

(1.4)

 

 

(37.8)

 

237.5

Fixed maturities, trading

0.5

(0.2)

0.3

Other investments

 

10.7

 

(4.9)

 

 

 

5.8

Separate account assets (5)

 

279.1

(526.4)

(280.4)

 

313.5

 

(214.2)

Liabilities

Investment and universal life contracts

 

 

 

(33.4)

 

10.1

 

(23.3)

Derivatives

Net derivative assets (liabilities)

1.9

 

8.8

 

 

 

10.7

For the year ended December 31, 2018

Net purchases,

sales, issuances

    

Purchases

    

Sales

    

Issuances

    

Settlements

    

and settlements

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

$

$

$

(1.4)

$

(1.4)

Corporate

 

12.9

 

(10.1)

 

 

(18.0)

 

(15.2)

Commercial mortgage-backed securities

 

 

 

 

0.1

 

0.1

Collateralized debt obligations

 

93.6

 

 

 

(27.3)

 

66.3

Other debt obligations

 

152.0

 

 

 

(4.6)

 

147.4

Total fixed maturities, available-for-sale

 

258.5

 

(10.1)

 

 

(51.2)

 

197.2

Fixed maturities, trading

3.7

 

 

3.7

Equity securities

 

 

(15.6)

 

 

 

(15.6)

Other investments

 

9.0

 

 

 

 

9.0

Separate account assets (5)

 

743.0

(608.4)

(206.5)

 

205.6

 

133.7

Liabilities

Investment and universal life contracts

 

 

 

2.8

 

4.7

 

7.5

Derivatives

Net derivative assets (liabilities)

1.8

 

3.4

 

 

 

5.2

14. Fair Value Measurements – (continued)

For the year ended December 31, 2017

Net purchases,

sales, issuances

   

Purchases

   

Sales

   

Issuances

   

Settlements

   

and settlements

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

67.4

$

(85.0)

$

$

(1.4)

$

(19.0)

Corporate

 

112.3

 

(89.4)

 

 

(52.1)

 

(29.2)

Commercial mortgage-backed securities

 

 

 

 

(0.7)

 

(0.7)

Collateralized debt obligations

 

22.9

 

 

 

(15.6)

 

7.3

Other debt obligations

 

 

 

 

(0.8)

 

(0.8)

Total fixed maturities, available-for-sale

 

202.6

 

(174.4)

 

 

(70.6)

 

(42.4)

Fixed maturities, trading

 

 

(92.4)

(92.4)

Equity securities, trading

(0.7)

(0.7)

Other investments

 

2.4

 

(36.7)

 

 

 

(34.3)

Separate account assets (5)

 

401.4

(651.4)

(284.6)

 

69.8

 

(464.8)

Liabilities

Investment and universal life contracts

 

 

 

(0.2)

 

7.6

 

7.4

Other liabilities

 

 

 

 

60.0

 

60.0

Derivatives

Net derivative assets (liabilities)

 

1.5

 

2.2

 

 

 

3.7

(5)

Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts.

Transfers

Transfers of assets and liabilities measured at fair value on a recurring basis between fair value hierarchy levels were as follows:

For the year ended December 31, 2019

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

of Level 1 into

of Level 1 into

of Level 2 into

of Level 2 into

of Level 3 into

of Level 3 into

   

Level 2

   

Level 3

   

Level 1

   

Level 3

   

Level 1

   

Level 2

   

(in millions)

Assets

Fixed maturities, available-for-sale:

U.S. government and agencies

$

$

$

1.1

$

$

$

Corporate

4.1

Commercial mortgage-backed securities

 

 

 

 

3.7

 

 

2.3

Collateralized debt obligations

 

69.9

Other debt obligations

 

8.3

76.3

Total fixed maturities, available-for-sale

1.1

86.0

78.6

Other investments

10.0

Separate account assets

 

102.7

173.2

14. Fair Value Measurements – (continued)

For the year ended December 31, 2018

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

of Level 1 into

of Level 1 into

of Level 2 into

of Level 2 into

of Level 3 into

of Level 3 into

   

Level 2

   

Level 3

   

Level 1

   

Level 3

   

Level 1

   

Level 2

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

$

$

$

$

$

1.3

Corporate

1.0

54.8

Commercial mortgage-backed securities

 

 

 

 

3.6

 

 

1.5

Collateralized debt obligations

 

54.7

237.0

Other debt obligations

 

91.0

Total fixed maturities, available-for-sale

59.3

385.6

Fixed maturities, trading

 

3.7

Separate account assets

 

293.2

0.8

2.3

0.2

40.9

For the year ended December 31, 2017

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

of Level 1 into

of Level 1 into

of Level 2 into

of Level 2 into

of Level 3 into

of Level 3 into

   

Level 2

   

Level 3

   

Level 1

   

Level 3

   

Level 1

   

Level 2

   

(in millions)

Assets

Fixed maturities, available-for- sale:

Non-U.S. governments

$

$

$

$

$

$

35.2

Corporate

 

 

 

 

22.2

 

 

125.3

Commercial mortgage-backed securities

 

 

 

 

26.3

 

 

84.5

Collateralized debt obligations

183.7

101.3

Other debt obligations

 

 

 

 

0.1

 

 

88.3

Total fixed maturities, available-for-sale

232.3

434.6

Fixed maturities, trading

1.9

Equity securities, trading

0.7

Separate account assets

 

12.5

 

 

5.9

 

3.1

 

 

38.7

Transfers between fair value hierarchy levels are recognized at the beginning of the reporting period.

Separate account assets transferred from Level 1 to Level 2 during 2019 included certain separate accounts we now value using the unit trust approved pooled investment fund ("APIF") as the unit of account that were previously valued using the underlying investments of the unit trust APIF. Separate account assets transferred from Level 1 to Level 2 during 2018 primarily included cash equivalents as a result of additional analysis to clarify the source of the price. Separate account assets transferred between Level 1 and Level 2 during 2017 primarily related to foreign equity securities. When these securities are valued at the close price of the local exchange where the assets traded, they are reflected in Level 1. When events materially affecting the value occur between the close of the local exchange and the New York Stock Exchange, we use adjusted prices determined by a third party pricing vendor to update the foreign market closing prices and the fair value is reflected in Level 2.

Assets transferred into Level 3 during 2019, 2018 and 2017, primarily included those assets for which we are now unable to obtain pricing from a recognized third party pricing vendor as well as assets that were previously priced using a matrix valuation approach that may no longer be relevant when applied to asset-specific situations.

Assets transferred out of Level 3 during 2019, 2018 and 2017, included those for which we are now able to obtain pricing from a recognized third party pricing vendor or from internal models using substantially all market observable information. Separate account assets transferred out of Level 3 during 2019 primarily included those we now value using the unit trust APIF as the unit of account, which were previously valued using the underlying investments of the unit trust APIF.

14. Fair Value Measurements – (continued)

Quantitative Information about Level 3 Fair Value Measurements

The following table provides quantitative information about the significant unobservable inputs used for recurring fair value measurements categorized within Level 3, excluding assets and liabilities for which significant quantitative unobservable inputs are not developed internally, which primarily consists of those valued using broker quotes or the measurement alternative for CCFEs. Refer to “Assets and liabilities measured at fair value on a recurring basis” for a complete valuation hierarchy summary.

December 31, 2019

    

Assets /

    

    

    

    

 

(liabilities)

measured at

Valuation

Unobservable

Input/range of

Weighted

fair value

technique(s)

input description

inputs

average

(in millions)

Assets

Fixed maturities, available-for-sale:

Corporate

$

72.5

Discounted cash flow

Discount rate (1)

1.9

%-

5.1

%

3.8

%

Illiquidity premium

0

basis points ("bps")-

410

bps

152

bps

Commercial mortgage-backed securities

2.4

Discounted cash flow

Probability of default

100.0

%

100.0

%

Potential loss severity

53.1

%

53.1

%

Collateralized debt obligations

108.7

Discounted cash flow

Discount rate (1)

2.9

%-

10.0

%

3.4

%

Potential loss severity

23.0

%

23.0

%

Probability of default

100.0

%

100.0

%

Other debt obligations

 

1.2

Discounted cash flow

Discount rate (1)

5.0

%

5.0

%

Illiquidity premium

500

bps

500

bps

Other investments

14.8

Discounted cash flow

Discount rate (1)

25.0

%-

30.0

%

27.5

%

Terminal earnings before interest, taxes, depreciation and amortization multiple

3.5

x-

4.5

x

4.0

x

Market comparables

Revenue multiples (2)

0.8

x-

7.0

x

4.1

x

Separate account assets

 

8,966.2

Discounted cash flow - mortgage loans

Discount rate (1)

2.8

%

2.8

%

Illiquidity premium

60

bps

60

bps

Credit spread rate

120

bps

120

bps

Discounted cash flow - real estate

Discount rate (1)

5.5

%-

11.8

%

6.7

%

Terminal capitalization rate

4.5

%-

9.3

%

5.7

%

Average market rent growth rate

2.0

%-

4.7

%

3.0

%

Discounted cash flow - real estate debt

Loan to value

8.0

%-

80.4

%

45.9

%

Market interest rate

3.2

%-

5.8

%

3.6

%

Liabilities

Investment and universal life contracts (6)

 

(214.2)

Discounted cash flow

Long duration interest rate

2.0

%-

2.1

%  (3)

Long-term equity market volatility

15.0

%-

26.9

%

Non-performance risk

0.2

%-

1.3

%

Utilization rate

See note (4)

Lapse rate

0.0

%-

18.0

%

Mortality rate

See note (5)

14. Fair Value Measurements – (continued)

December 31, 2018

    

Assets /

    

    

    

    

 

(liabilities)

 

measured at

Valuation

Unobservable

Input/range of

Weighted

fair value

technique(s)

input description

inputs

average

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

4.6

Discounted cash flow

Discount rate (1)

3.2

%

3.2

%

Illiquidity premium

50

bps

50

bps

Comparability adjustment

(25)

bps

(25)

bps

Corporate

 

25.4

Discounted cash flow

Discount rate (1)

3.3

%-

4.5

%

3.9

%

Illiquidity premium

0

bps-

60

bps

36

bps

Other debt obligations

 

1.7

Discounted cash flow

Discount rate (1)

5.0

%

5.0

%

Illiquidity premium

500

bps

500

bps

Separate account assets

 

8,440.8

Discounted cash flow - mortgage loans

Discount rate (1)

3.3

%-

4.7

%

4.2

%

Illiquidity premium

0

bps-

60

bps

56

bps

Credit spread rate

85

bps-

172

bps

168

bps

Discounted cash flow - real estate

Discount rate (1)

5.6

%-

11.5

%

6.7

%

Terminal capitalization rate

4.3

%-

9.3

%

5.8

%

Average market rent growth rate

2.0

%-

4.7

%

2.9

%

Discounted cash flow - real estate debt

Loan to value

11.0

%-

69.3

%

45.9

%

Market interest rate

3.9

%-

6.0

%

4.3

%

Liabilities

Investment and universal life contracts (6)

 

(45.2)

Discounted cash flow

Long duration interest rate

2.8

%-

2.9

%  (3)

Long-term equity market volatility

16.7

%-

27.8

%

Non-performance risk

0.6

%-

1.6

%

Utilization rate

See note (4)

Lapse rate

1.3

%-

16.0

%

Mortality rate

See note (5)

(1)Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any illiquidity or other adjustments, where applicable.
(2)Revenue multiples are amounts used when we have determined market participants would use such multiples to value the investments.
(3)Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. Derived from interpolation between various observable swap rates.
(4)This input factor is the number of contractholders taking withdrawals as well as the amount and timing of the withdrawals and a range does not provide a meaningful presentation.
(5)This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation.
(6)Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported.

Market comparable discount rates are used as the base rate in the discounted cash flows used to determine the fair value of certain assets. Increases or decreases in the credit spreads on the comparable assets could cause the fair value of the assets to significantly decrease or increase, respectively. Additionally, we may adjust the base discount rate or the modeled price by applying an illiquidity premium given the highly structured nature of certain assets. Increases or decreases in this illiquidity premium could cause significant decreases or increases, respectively, in the fair value of the asset.

Embedded derivatives within our investment and universal life contracts liability can be in either an asset or liability position, depending on certain inputs at the reporting date. Increases to an asset or decreases to a liability are described as increases to fair value. Increases or decreases in market volatilities could cause significant decreases or increases, respectively, in the fair value of embedded derivatives in investment and universal life contracts. Long duration interest rates are used as the mean return when projecting the growth in the value of associated account value and impact the discount rate used in the discounted future cash flows valuation. The amount of claims will increase if account value is not sufficient to cover guaranteed withdrawals. Increases or decreases in risk-free rates could cause the fair value of the embedded derivative to significantly increase or decrease, respectively. Increases or decreases in our own credit risks, which impact the rates used to discount future cash flows, could significantly increase or decrease, respectively, the fair value of the embedded derivative. All of these changes in fair value would impact net income.

14. Fair Value Measurements – (continued)

Decreases or increases in the mortality rate assumption could cause the fair value of the embedded derivative to decrease or increase, respectively. Decreases or increases in the overall lapse rate assumption could cause the fair value of the embedded derivative to decrease or increase, respectively. The lapse rate assumption may vary dynamically based on the relationship of the guarantee and associated account value. A stronger or weaker dynamic lapse rate assumption could cause the fair value of the embedded derivative to decrease or increase, respectively. The utilization rate assumption includes how many contractholders will take withdrawals, when they will take them and how much of their benefit they will take.  Increases or decreases in the assumption of the number of contractholders taking withdrawals could cause the fair value of the embedded derivative to decrease or increase, respectively. Assuming contractholders take withdrawals earlier or later could cause the fair value of the embedded derivative to decrease or increase, respectively. Assuming contractholders take more or less of their benefit could cause the fair value of the embedded derivative to decrease or increase, respectively.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

No significant assets and liabilities were measured at fair value on a nonrecurring basis for the years ended December 31, 2019, 2018 and 2017.

Fair Value Option

We elected fair value accounting for:

Certain commercial mortgage loans of a consolidated VIE for which it was not practicable for us to determine the carrying value. The consolidated VIE was unwound in the third quarter of 2019. In addition, we had certain obligations of consolidated VIEs held by a synthetic entity for which it was not practicable for us to determine the carrying value. The synthetic entity matured in the first quarter of 2017.
Certain real estate ventures that are subject to the equity method of accounting because the nature of the investments is to add value to the properties and generate income from the operations of the properties. Other equity method real estate investments are not fair valued because the investments mainly generate income from the operations of the underlying properties.
In 2017, we had certain investment funds for which we did not have enough influence to account for under the equity method in order to reflect the economics of the investment in the financial statements. We did not elect the fair value option for other similar investments as these investments are generally accounted for under the equity method of accounting.

The following tables present information regarding the assets and liabilities for which the fair value option was elected.

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Commercial mortgage loans of consolidated VIEs (1) (2)

Fair value

$

$

6.4

Aggregate contractual principal

6.5

Real estate ventures (1)

Fair value

22.8

17.2

(1)Reported with other investments in the consolidated statements of financial position.
(2)None of the loans were more than 90 days past due or in non-accrual status.

14. Fair Value Measurements – (continued)

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Commercial mortgage loans of consolidated VIEs

Change in fair value pre-tax gain (loss) (1) (2)

$

0.1

$

(0.2)

$

(0.4)

Interest income (3)

0.3

0.7

0.9

Obligations of consolidated VIEs

Change in fair value pre-tax loss - instrument specific credit risk (2) (4)

(0.1)

Change in fair value pre-tax loss (2)

(0.1)

Interest expense (5)

0.3

Real estate ventures

Change in fair value pre-tax gain (6)

6.0

1.7

3.8

Investment funds

Change in fair value pre-tax gain (6) (7)

1.7

Dividend income (6)

1.9

(1)None of the change in fair value related to instrument-specific credit risk.
(2)Reported in net realized capital gains (losses) on the consolidated statements of operations.
(3)Reported in net investment income on the consolidated statements of operations and recorded based on the effective interest rates as determined at the closing of the loan.
(4)Estimated based on credit spreads and quality ratings.
(5)Reported in operating expenses on the consolidated statements of operations.
(6)Reported in net investment income on the consolidated statements of operations.
(7)Absent the fair value election, the change in fair value on the investments would be reported in OCI.

Financial Instruments Not Reported at Fair Value

The carrying value and estimated fair value of financial instruments not recorded at fair value on a recurring basis but required to be disclosed at fair value were as follows:

December 31, 2019

Fair value hierarchy level

    

Carrying amount

    

Fair value

    

Level 1

    

Level 2

    

Level 3

   

(in millions)

 

Assets (liabilities)

Mortgage loans

$

16,486.9

$

17,214.7

$

$

$

17,214.7

Policy loans

 

798.0

 

1,030.8

 

 

 

1,030.8

Other investments

 

278.8

 

273.1

 

 

180.3

 

92.8

Cash and cash equivalents

 

1,216.9

 

1,216.9

 

1,193.3

 

23.6

 

Investment contracts

 

(33,922.2)

 

(34,001.3)

 

 

(4,304.5)

 

(29,696.8)

Short-term debt

 

(93.4)

 

(93.4)

 

 

(93.4)

 

Long-term debt

 

(3,734.1)

 

(4,122.9)

 

 

(4,015.3)

 

(107.6)

Separate account liabilities

 

(151,132.4)

 

(149,955.6)

 

 

 

(149,955.6)

Bank deposits (1)

 

(469.6)

 

(468.3)

 

 

(468.3)

 

Cash collateral payable

 

(156.8)

 

(156.8)

 

(156.8)

 

 

December 31, 2018

 

Fair value hierarchy level

 

    

Carrying amount

    

Fair value

    

Level 1

    

Level 2

    

Level 3

   

(in millions)

 

Assets (liabilities)

Mortgage loans

$

15,336.9

$

15,383.6

$

$

$

15,383.6

Policy loans

 

801.4

 

965.5

 

 

 

965.5

Other investments

 

247.4

 

239.8

 

 

157.5

 

82.3

Cash and cash equivalents

 

1,201.6

 

1,201.6

 

1,148.6

 

53.0

 

Investment contracts

 

(32,572.1)

 

(31,428.2)

 

 

(4,085.7)

 

(27,342.5)

Short-term debt

 

(42.9)

 

(42.9)

 

 

(42.9)

 

Long-term debt

 

(3,259.6)

 

(3,257.1)

 

 

(3,129.3)

 

(127.8)

Separate account liabilities

 

(132,562.9)

 

(131,491.4)

 

 

 

(131,491.4)

Bank deposits (1)

 

(500.0)

 

(489.1)

 

 

(489.1)

 

Cash collateral payable

 

(79.5)

 

(79.5)

 

(79.5)

 

 

(1)   Excludes deposit liabilities without defined or contractual maturities.

v3.19.3.a.u2
Statutory Insurance Financial Information
12 Months Ended
Dec. 31, 2019
Statutory Insurance Financial Information  
Statutory Insurance Financial Information

15. Statutory Insurance Financial Information

Principal Life, the largest indirect subsidiary of PFG, prepares statutory financial statements in accordance with the accounting practices prescribed or permitted by the Insurance Division of the Department of Commerce of the State of Iowa (the “Iowa Insurance Division”). The Iowa Insurance Division recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company to determine its solvency under the Iowa Insurance Law. The National Association of Insurance Commissioners' (“NAIC”) Accounting Practices and Procedures Manual has been adopted as a component of prescribed practices by the State of Iowa. The Commissioner has the right to permit other specific practices that deviate from prescribed practices. Statutory accounting practices differ from U.S. GAAP primarily due to charging policy acquisition costs to expense as incurred, establishing reserves using different actuarial assumptions, valuing investments on a different basis and not admitting certain assets, including certain net deferred income tax assets.

For the years ended, December 31, 2019 and 2018, Principal Life’s use of prescribed statutory accounting practices resulted in higher statutory surplus of $862.1 million and $546.3 million, respectively, relative to the accounting practices and procedures of the NAIC due to its accounting for reserve credits associated with a reinsurance transaction with an affiliated reinsurer. In addition, as of December 31, 2019 and 2018, Principal Life’s permitted statutory accounting practice relating to variable annuities with a guaranteed living benefit rider resulted in lower statutory surplus of $151.3 million and $69.9 million, respectively, relative to carrying certain interest rate swaps at book value rather than fair value, as if they received hedge accounting treatment for statutory. Effective January 1, 2020, the Iowa Insurance Division approved our request to discontinue the use of this permitted practice due to changes in the practices and procedures of the NAIC. The discontinuance of the permitted practice will create a one-time increase to surplus.

Principal Life cedes certain term and universal life insurance statutory reserves to our affiliated reinsurance subsidiaries on a funds withheld coinsurance basis. The reserves are secured by cash, invested assets and financing provided by highly rated third parties. As of December 31, 2019 and 2018, our affiliated reinsurance subsidiaries assumed statutory reserves of $7,902.3 million and $6,850.3 million from Principal Life, respectively. In the states of Vermont and Delaware, the affiliated reinsurers had permitted and prescribed practices allowing for the admissibility of certain assets backing these reserves. As of December 31, 2019 and 2018, assets admitted under these practices totaled $3,358.0 million and $2,852.0 million, respectively.

Life and health insurance companies are subject to certain risk-based capital (“RBC”) requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life and health insurance company is to be determined based on the various risk factors related to it. As of December 31, 2019, Principal Life met the minimum RBC requirements.

15. Statutory Insurance Financial Information – (continued)

Statutory net income and statutory capital and surplus of Principal Life were as follows:

As of or for the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Statutory net income

$

989.3

$

1,017.6

$

1,976.7

Statutory capital and surplus

5,193.4

 

5,319.6

 

4,946.8

v3.19.3.a.u2
Segment Information
12 Months Ended
Dec. 31, 2019
Segment Information  
Segment Information

16. Segment Information

We provide financial products and services through the following segments: Retirement and Income Solutions, Principal Global Investors, Principal International and U.S. Insurance Solutions. In addition, we have a Corporate segment. The segments are managed and reported separately because they provide different products and services, have different strategies or have different markets and distribution channels.

The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The segment is organized into Retirement and Income Solutions – Fee, which includes full service accumulation, trust services, individual variable annuities and revenues and expenses associated with the Acquired Business; and Retirement and Income Solutions – Spread, which includes individual fixed annuities, investment only, pension risk transfer and banking services.

The Principal Global Investors segment provides asset management services to our asset accumulation business, our insurance operations, the Corporate segment and third party clients. This segment also includes our mutual fund business.

The Principal International segment has operations in Latin America (Brazil, Chile and Mexico) and Asia (China, Hong Kong Special Administrative Region, India and Southeast Asia). We focus on locations with large middle classes, favorable demographics and growing long-term savings, ideally with voluntary or mandatory pension markets. We entered these locations through acquisitions, start-up operations and joint ventures.

The U.S. Insurance Solutions segment focuses on solutions for individuals and small-to-medium sized businesses and their employees. The segment is organized into Specialty Benefits insurance, which  provides group dental and vision insurance, individual and group disability insurance, critical illness, accident, group life insurance and non-medical fee-for-service claims administration; and Individual Life insurance, which provides universal life, variable universal life, indexed universal life and traditional life insurance.

Our Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including financing costs), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of Principal Securities, Inc. (“PSI”), our retail broker-dealer and registered investment advisor (“RIA”); RobustWealth, Inc. (“RobustWealth”), our financial technology company; and our exited group medical and long-term care insurance businesses are reported in this segment.

Effective January 1, 2019, we made changes to the allocation of certain compensation and other expenses and net investment income among the reportable segments. These allocation changes were made as a result of a global financial process improvement project. The expense allocation changes simplify the allocation processes, increase transparency and allow for more effective expense management across the enterprise. The net investment income allocation changes better align our internal capital allocation with enterprise capital targets. Segment results for prior periods were recast so they are reported on a comparable basis, with no impact to total company financial results.

16. Segment Information – (continued)

Management uses segment pre-tax operating earnings in evaluating performance, which is consistent with the financial results provided to and discussed with securities analysts. We determine segment pre-tax operating earnings by adjusting U.S. GAAP income before income taxes for pre-tax net realized capital gains (losses), as adjusted, pre-tax other adjustments that management believes are not indicative of overall operating trends and certain adjustments related to equity method investments and noncontrolling interest. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of pre-tax operating earnings enhances the understanding of our results of operations by highlighting pre-tax earnings attributable to the normal, ongoing operations of the business.

The pre-tax net realized capital gains (losses), as adjusted, excluded from pre-tax operating earnings reflects consolidated U.S. GAAP pre-tax net realized capital gains (losses) excluding the following items that are included in pre-tax operating earnings:

Periodic settlements and accruals on derivative instruments not designated as hedging instruments,
Certain market value adjustments of derivatives and embedded derivatives and
Certain market value adjustments of derivative instruments used to economically hedge embedded derivatives.

Pre-tax net realized capital gains (losses), as adjusted, are further adjusted for:

Amortization of hedge accounting book value adjustments for certain discontinued hedges,
Certain hedge accounting market value revenue adjustments,
Certain market value adjustments to fee revenues,
Pre-tax net realized capital gains (losses) adjustments related to equity method investments,
Pre-tax net realized capital gains (losses) adjustments related to sponsored investment funds,
Recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and services,
Related changes in the amortization pattern of DAC and related actuarial balances,
Certain hedge accounting market value expense adjustments and
Net realized capital gains (losses) distributed.

16. Segment Information – (continued)

Segment operating revenues reflect consolidated U.S. GAAP total revenues excluding:

Net realized capital gains (losses), except periodic settlements and accruals on derivatives not designated as hedging instruments and certain market value adjustments of derivative instruments used to economically hedge embedded derivatives, and their impact on:
Amortization of hedge accounting book value adjustments for certain discontinued hedges,
Certain hedge accounting market value revenue adjustments,
Certain market value adjustments to fee revenues,
Pre-tax net realized capital gains (losses) adjustments related to equity method investments,
Pre-tax net realized capital gains (losses) adjustments related to sponsored investment funds and
Recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and services.
Pre-tax other adjustments and income taxes of equity method investments and
Pre-tax other adjustments management believes are not indicative of overall operating trends.

The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of: (1) pension and other postretirement employee benefits (“OPEB”) cost allocations, (2) certain expenses deemed to benefit the entire organization and (3) income tax allocations. For purposes of determining pre-tax operating earnings, the segments are allocated the service component of pension and other postretirement benefit costs. The Corporate segment reflects the non-service components of pension and other postretirement benefit costs as assumptions are established and funding decisions are managed from a company-wide perspective. Additionally, the Corporate segment reflects expenses that benefit the entire organization for which the segments are not able to influence the spend. This includes expenses such as public company costs, executive management costs, acquisition and disposition costs, among others. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining non-GAAP operating earnings, the segments are allocated tax adjustments consistent with the positions we took on tax returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes.

16. Segment Information – (continued)

The following tables summarize select financial information by segment, including operating revenues for our products and services, and reconcile segment totals to those reported in the consolidated financial statements:

    

December 31, 2019

    

December 31, 2018

 

(in millions)

 

Assets:

Retirement and Income Solutions

$

192,698.1

$

163,833.6

Principal Global Investors

2,363.3

 

2,301.0

Principal International

48,857.6

 

46,701.2

U.S. Insurance Solutions

28,669.6

 

25,388.2

Corporate

3,499.2

 

4,812.1

Total consolidated assets

$

276,087.8

$

243,036.1

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Operating revenues by segment:

Retirement and Income Solutions:

Retirement and Income Solutions – Fee

$

2,003.0

$

1,783.7

$

1,776.4

Retirement and Income Solutions – Spread

6,951.4

5,493.3

5,378.3

Total Retirement and Income Solutions (1)

8,954.4

7,277.0

7,154.7

Principal Global Investors (2)

1,505.8

 

1,736.3

 

1,444.4

Principal International

1,523.2

 

1,372.9

 

1,251.5

U.S. Insurance Solutions:

Specialty Benefits insurance

2,493.6

 

2,326.4

 

2,168.4

Individual Life insurance

1,955.6

 

1,763.6

 

1,745.3

Eliminations

(0.2)

 

(0.2)

 

(0.2)

Total U.S. Insurance Solutions

4,449.0

 

4,089.8

 

3,913.5

Corporate

(39.3)

 

(51.2)

 

(60.8)

Total segment operating revenues

16,393.1

 

14,424.8

 

13,703.3

Net realized capital gains (losses), net of related revenue adjustments

(98.5)

 

(132.3)

 

472.2

Adjustments related to equity method investments

(72.5)

(55.3)

(82.3)

Total revenues per consolidated statements of operations

$

16,222.1

$

14,237.2

$

14,093.2

Pre-tax operating earnings (losses) by segment:

Retirement and Income Solutions

$

874.0

$

922.2

$

938.5

Principal Global Investors

483.3

 

562.1

 

481.3

Principal International

390.7

 

272.6

 

346.2

U.S. Insurance Solutions

521.6

 

467.0

 

412.8

Corporate

(380.3)

 

(269.4)

 

(305.1)

Total segment pre-tax operating earnings

1,889.3

 

1,954.5

 

1,873.7

Pre-tax net realized capital gains (losses), as adjusted (3)

(140.9)

 

(126.4)

 

520.3

Pre-tax other adjustments (4)

 

 

(70.0)

Adjustments related to equity method investments and noncontrolling interest

(55.1)

(43.7)

(71.8)

Income before income taxes per consolidated statements of operations

$

1,693.3

$

1,784.4

$

2,252.2

(1)Reflects inter-segment revenues of $357.8 million, $393.6 million and $402.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.
(2)Reflects inter-segment revenues of $264.9 million, $262.8 million and $250.9 million for the years ended December 31, 2019, 2018 and 2017, respectively.
(3)Pre-tax net realized capital gains (losses), as adjusted, is derived as follows:

16. Segment Information – (continued)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Net realized capital gains (losses)

$

(52.8)

$

(75.4)

$

524.2

Derivative and hedging-related revenue adjustments

(80.4)

 

(64.9)

 

(59.4)

Market value adjustments to fee revenues

 

0.1

 

(0.1)

Adjustments related to equity method investments

2.6

(5.4)

1.4

Adjustments related to sponsored investment funds

23.6

12.9

6.3

Recognition of front-end fee revenue

8.5

 

0.4

 

(0.2)

Net realized capital gains (losses), net of related revenue adjustments

(98.5)

 

(132.3)

 

472.2

Amortization of deferred acquisition costs and other actuarial balances

(40.8)

 

(27.0)

 

55.0

Capital (gains) losses distributed

(68.2)

 

14.4

 

(55.0)

Market value adjustments of embedded derivatives

66.6

 

18.5

 

48.1

Pre-tax net realized capital gains (losses), as adjusted (a)

$

(140.9)

$

(126.4)

$

520.3

(a)

As adjusted before noncontrolling interest capital gains (losses).

(4)

For the year ended December 31, 2017, pre-tax other adjustments included the negative effect of a contribution to The Principal Financial Group Foundation, Inc.

The following is a summary of income tax expense (benefit) allocated to our segments for purposes of determining non-GAAP operating earnings. Segment income taxes are reconciled to income taxes reported on our consolidated statements of operations.

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Income tax expense (benefit) by segment:

Retirement and Income Solutions

$

71.8

$

85.6

$

123.0

Principal Global Investors

121.8

 

149.1

 

186.0

Principal International

106.8

 

73.3

 

87.5

U.S. Insurance Solutions

101.8

 

85.7

 

134.0

Corporate

(82.0)

 

(36.7)

 

(135.4)

Total segment income taxes from operating earnings

320.2

 

357.0

 

395.1

Tax expense (benefit) related to net realized capital losses, as adjusted

1.3

 

(71.4)

 

209.1

Tax benefit related to other after-tax adjustments (1)

 

 

(594.5)

Certain adjustments related to equity method investments and noncontrolling interest

(72.3)

(54.9)

(82.0)

Total income taxes per consolidated statements of operations

$

249.2

$

230.7

$

(72.3)

(1)The 2017 tax benefit includes $568.3 million associated with the U.S. tax reform.

The following is a summary of depreciation and amortization expense allocated to our segments for purposes of determining pre-tax operating earnings. Segment depreciation and amortization is reconciled to depreciation and amortization included in operating expenses in our consolidated statements of operations.

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Depreciation and amortization expense by segment:

Retirement and Income Solutions

$

48.2

$

32.5

$

30.6

Principal Global Investors

18.9

 

21.9

 

19.8

Principal International

58.6

 

59.6

 

53.1

U.S. Insurance Solutions

25.0

 

26.2

 

28.1

Corporate

16.1

 

10.8

 

8.2

Total depreciation and amortization expense included in our consolidated statements of operations

$

166.8

$

151.0

$

139.8

v3.19.3.a.u2
Revenues from Contracts with Customers
12 Months Ended
Dec. 31, 2019
Revenues from Contracts with Customers  
Revenues from Contracts with Customers

17. Revenues from Contracts with Customers

The following tables summarize disaggregation of revenues from contracts with customers, including select financial information by segment, and reconcile totals to those reported in the consolidated financial statements. Revenues from contracts with customers are included in fees and other revenues on the consolidated statements of operations.

For the year ended December 31,

    

2019

    

2018

    

2017

 

(in millions)

Revenue from contracts with customers by segment:

Retirement and Income Solutions:

Retirement and Income Solutions – Fee

 

$

455.5

 

$

252.4

 

$

258.0

Retirement and Income Solutions – Spread

9.3

 

10.5

 

 

10.2

Total Retirement and Income Solutions

464.8

 

262.9

 

 

268.2

Principal Global Investors

1,456.7

 

1,700.5

 

 

1,406.1

Principal International

462.2

 

477.1

 

 

426.4

U.S. Insurance Solutions:

Specialty Benefits insurance

14.9

 

14.8

 

 

13.9

Individual Life insurance

51.2

 

42.4

 

 

36.4

Eliminations

(0.2)

 

(0.2)

 

 

(0.2)

Total U.S. Insurance Solutions

65.9

 

57.0

 

 

50.1

Corporate

160.4

 

161.4

 

 

148.4

Total segment revenue from contracts with customers

2,610.0

 

2,658.9

 

 

2,299.2

Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1)

1,791.4

 

1,614.4

 

 

1,593.4

Pre-tax other adjustments (2)

8.5

 

0.5

 

 

(0.3)

Total fees and other revenues per consolidated statements of operations

 

$

4,409.9

 

$

4,273.8

 

$

3,892.3

(1)Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted for under the financial instruments or insurance contracts standards.
(2)Pre-tax other adjustments relate to the recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and certain market value adjustments to fee revenues.

Retirement and Income Solutions - Fee

Retirement and Income Solutions - Fee offers service and trust agreements for defined contribution retirement plans, including 401(k) plans, 403(b) plans, and employee stock ownership plans. The investment components of these service agreements are in the form of mutual fund offerings. In addition, plan sponsor retirement plan trust and custody services are also available through an affiliated trust company. With the Acquired Business, services and trust agreements are also offered to non-retirement customers including insurance companies, endowments and other financial institutions.

Fees and other revenues are earned for administrative activities performed for the defined contribution retirement plans including recordkeeping and reporting as well as trust and custody, asset management and investment services. Fees and other revenues are earned for administrative activities performed for non-retirement plan customers including trust and custody services, defined benefit administration and investment management activities. The majority of these activities are performed daily over time. Fee-for-service transactions are also provided upon client request. These services are considered distinct or grouped into a bundle until a distinct performance obligation is identified. Some performance obligations are considered a series of distinct services, which are substantially the same and have the same pattern of transfer to the customer.

Fees and other revenues can be based on a fixed contractual rate for these services or can be variable based upon contractual rates applied to the market value of the client's investment portfolio each day. If the consideration for this series of performance obligations is based on daily market value, it is considered variable each day as the services are performed over time. The consideration becomes unconstrained and thus recognized as revenue for each day’s series of distinct services once the market value of the clients’ investment portfolios is determined at market close or carried over at the end of the day for days when the market is closed. Additionally, fixed fees and other revenues are recognized point-in-time as fee-for-service transactions upon completion.

17. Revenues from Contracts with Customers – (continued)

The types of revenues from contracts with customers were as follows:

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

  (in millions)

 

Administrative service fee revenue (1)

$

453.7

$

250.7

$

256.4

Other fee revenue

 

1.8

 

1.7

 

1.6

Total revenues from contracts with customers

 

455.5

 

252.4

 

258.0

Fees and other revenues not within the scope of revenue recognition guidance

 

1,139.0

 

1,132.9

 

1,111.2

Total fees and other revenues

 

1,594.5

 

1,385.3

 

1,369.2

Premiums and other considerations

 

3.5

 

4.0

 

3.8

Net investment income

 

405.0

 

394.4

 

403.4

Total operating revenues

$

2,003.0

$

1,783.7

$

1,776.4

(1)Includes fee revenue for the Acquired Business in 2019.

Retirement and Income Solutions - Spread

Retirement and Income Solutions – Spread offers individual retirement accounts (“IRAs”) through Principal Bank, which are primarily funded by retirement savings rolled over from qualified retirement plans. The IRAs are held in savings accounts, money market accounts and certificates of deposit. Revenues are earned through fees as the performance of establishing and maintaining IRA accounts is completed. Fee-for-service transactions are also provided upon client request. The establishment fees and annual maintenance fees are accrued into earnings over a period of time using the average account life. Upfront and recurring bank fees are related to performance obligations that have the same pattern of transfer to the customer and are recognized in income over time with control transferred to the customers utilizing the output method. These fees are based on a fixed contractual rate. Fixed fees and other revenues are also recognized point-in-time as fee-for-service transactions upon completion.

The types of revenues from contracts with customers were as follows:

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

(in millions)

Deposit account fee revenue

$

9.3

$

10.5

$

10.2

Total revenues from contracts with customers

 

9.3

 

10.5

 

10.2

Fees and other revenues not within the scope of revenue recognition guidance

 

13.9

 

12.5

 

15.0

Total fees and other revenues

 

23.2

 

23.0

 

25.2

Premiums and other considerations

 

4,859.2

 

3,631.9

 

3,667.3

Net investment income

 

2,069.0

 

1,838.4

 

1,685.8

Total operating revenues

$

6,951.4

$

5,493.3

$

5,378.3

17. Revenues from Contracts with Customers – (continued)

Principal Global Investors

Fees and other revenues earned for asset management, investment advisory and distribution services provided to institutional and retail clients are based largely upon contractual rates applied to the specified amounts of the clients’ portfolios. Each service is a distinct performance obligation, or a series of distinct services that are a single performance obligation in that the services are substantially the same and have the same pattern of transfer to the customer. Fees and other revenues received for performance obligations such as asset management and other services are typically recognized over time utilizing the output method as the service is performed. Performance fees and transaction fees on certain accounts are recognized in income when the probability of significant reversal will not occur upon resolution of the uncertainty, which could be based on a variety of factors such as market performance or other internal metrics. Asset management fees are accrued each month based on the fee terms within the applicable agreement and are generally billed quarterly when values used for the calculation are available. Management fees and performance fees are variable consideration as they are subject to fluctuation based on assets under management (“AUM”) and other constraints. These fees are not recognized until unconstrained at the end of each reporting period.

The types of revenues from contracts with customers were as follows:

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

(in millions)

 

Management fee revenue

$

1,239.1

$

1,244.5

$

1,217.0

Other fee revenue (1)

 

217.6

 

456.0

 

189.1

Total revenues from contracts with customers

1,456.7

 

1,700.5

 

1,406.1

Fees and other revenues not within the scope of revenue recognition guidance

38.5

 

30.4

 

28.1

Total fees and other revenues

1,495.2

 

1,730.9

 

1,434.2

Net investment income

10.6

 

5.4

 

10.2

Total operating revenues

$

1,505.8

$

1,736.3

$

1,444.4

(1)

During the third quarter of 2018, we recognized a $253.1 million accelerated performance fee resulting from the realignment of a real estate investment team.

Principal International

Fees and other revenues are earned for asset management and distribution services provided to retail and institutional clients in addition to trustee and/or administrative services performed for retirement savings plans. Each service is considered a distinct performance obligation; however, if the services are not distinct on their own, we combine them into a distinct bundle or we have a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. Fees and other revenues are typically based upon contractual rates applied to the market value of the clients’ investment portfolios and are considered variable consideration. The transaction price generally includes the amount determined at the end of the reporting period, whereby fees are deducted from the clients’ investment portfolios and are recognized as revenue when no longer constrained and satisfied as the services are performed over time utilizing the output method. In addition, payments to customers can take the form of an incentive given by us to entice the customer to purchase its goods or services. Incentives offered to customers are recognized as part of the transaction price as a reduction of revenue either over the period the customer remains in order to receive the incentive or monthly throughout the life of the contract.

Incentive-based fees are recognized in income when the probability of significant reversal will not occur upon the resolution of the uncertainty, which is based on market performance.

Fees for managing customers’ mandatory retirement savings accounts in Chile are collected with each monthly deposit made by our customers. If a customer stops contributing before retirement age, we collect no fees but services are still provided. We recognize revenue from these contracts as services are performed over the life of the contract and review annually.

17. Revenues from Contracts with Customers – (continued)

The types of revenues from contracts with customers were as follows:

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

 

(in millions)

Management fee revenue

$

459.3

$

472.1

$

414.6

Other fee revenue

 

2.9

 

5.0

 

11.8

Total revenues from contracts with customers

 

462.2

 

477.1

 

426.4

Fees and other revenues not within the scope of revenue recognition guidance

 

6.3

 

7.3

 

7.1

Total fees and other revenues

 

468.5

 

484.4

 

433.5

Premiums and other considerations

 

393.3

 

317.2

 

218.0

Net investment income

 

661.4

 

571.3

 

600.0

Total operating revenues

$

1,523.2

$

1,372.9

$

1,251.5

Revenues from contracts with customers by region:

 

  

 

  

 

  

Latin America

$

351.5

$

370.8

$

318.9

Asia

 

111.0

 

106.3

 

108.3

Principal International corporate / regional offices

 

0.9

 

0.9

 

0.7

Eliminations

 

(1.2)

 

(0.9)

 

(1.5)

Total revenues from contracts with customers

$

462.2

$

477.1

$

426.4

U.S. Insurance Solutions

Fees and other revenues are earned for administrative services performed including recordkeeping and reporting services for fee-for-service products, nonqualified benefit plans, separate accounts and dental networks. Services within contracts are not distinct on their own; however, we combine the services into a distinct bundle and account for the bundle as a single performance obligation, which is satisfied over time utilizing the output method as services are rendered. The transaction price corresponds with the performance completed to date, for which the value is recognized as revenue during the period. Variability of consideration is resolved at the end of each period and payments are due when billed.  

Commission income is earned through sponsored brokerage services. Performance obligations are satisfied at a point in time, upon delivery of a placed case, and the transaction price calculated per the compensation schedule is recognized as revenue.  

17. Revenues from Contracts with Customers – (continued)

The types of revenues from contracts with customers were as follows:

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

(in millions)

 

Specialty Benefits insurance:

 

  

 

  

 

  

Administrative service fees

$

14.9

$

14.8

$

13.9

Total revenues from contracts with customers

 

14.9

 

14.8

 

13.9

Fees and other revenues not within the scope of revenue recognition guidance

 

19.6

 

20.6

 

21.3

Total fees and other revenues

 

34.5

 

35.4

 

35.2

Premiums and other considerations

 

2,292.7

 

2,134.1

 

1,985.9

Net investment income

 

166.4

 

156.9

 

147.3

Total operating revenues

$

2,493.6

$

2,326.4

$

2,168.4

Individual Life insurance:

 

  

 

  

 

  

Administrative service fees

$

24.3

$

22.8

$

21.5

Commission income

 

26.9

 

19.6

 

14.9

Total revenues from contracts with customers

 

51.2

 

42.4

 

36.4

Fees and other revenues not within the scope of revenue recognition guidance

 

875.9

 

727.0

 

703.5

Total fees and other revenues

 

927.1

 

769.4

 

739.9

Premiums and other considerations

 

317.9

 

322.4

 

342.4

Net investment income

 

710.6

 

671.8

 

663.0

Total operating revenues

$

1,955.6

$

1,763.6

$

1,745.3

Corporate

Fees and other revenues are earned on the performance of selling and servicing of securities and related products offered through PSI, an introducing broker-dealer registered with the FINRA.

PSI enters into selling and distribution agreements with the obligation to sell or distribute the securities products, such as mutual funds, annuities and products sold through RIAs, to individual clients in return for a front-end sales charges, 12b-1 service fees, annuity fees and asset-based fees. Front-end sales charges, 12b-1 fees and annuity fees are related to a single sale and are earned at the time of sale. PSI also enters into agreements with individual customers to provide securities trade execution and custody through a brokerage services platform in return for ticket charge and other service fee revenue. These services are bundled as one single distinct service referred to as brokerage services. This revenue is related to distinct transactions and is earned at a point in time.

PSI also enters into agreements with individual customers to provide trade execution, clearing services, custody services and investment research services through our proprietary offered fee-based products. These services are bundled as one single distinct service referred to as advisory services. In addition, for outside RIA business PSI performs sales and distribution services only. The revenues are earned over time as the service is performed utilizing the output method.  

A majority of our revenue is based upon contractual rates applied to the market value of the clients’ portfolios and considered variable consideration.

17. Revenues from Contracts with Customers – (continued)

The Corporate segment also includes inter-segment eliminations of fees and other revenues. The types of revenues from contracts with customers were as follows:

For the year ended December 31,

    

2019

    

2018

    

2017

  (in millions)

Commission income

$

320.2

$

316.1

$

299.7

Other fee revenue

46.1

35.4

30.1

Eliminations

 

(205.9)

 

(190.1)

 

(181.4)

Total revenues from contracts with customers

 

160.4

 

161.4

 

148.4

Fees and other revenues not within the scope of revenue recognition guidance

 

(301.8)

 

(316.3)

 

(292.8)

Total fees and other revenues

 

(141.4)

 

(154.9)

 

(144.4)

Net investment income

 

102.1

 

103.7

 

83.6

Total operating revenues

$

(39.3)

$

(51.2)

$

(60.8)

Contract Costs

Sales compensation and other incremental costs of obtaining a contract are capitalized and amortized over the period of contract benefit if the costs are expected to be recovered. The contract cost asset, which is included in other assets on the consolidated statements of financial position, was $157.0 million and $137.6 million as of December 31, 2019 and December 31, 2018, respectively.

We apply the practical expedient for certain costs where we recognize the incremental costs of obtaining these contracts as an expense when incurred if the amortization period of the assets is one year or less. These costs, along with costs that are not deferrable, are included in operating expenses on the consolidated statements of operations.

Deferred contract costs consist primarily of commissions and variable compensation. We amortize capitalized contract costs on a straight-line basis over the expected contract life, reflecting lapses as they are incurred. Deferred contract costs are subject to impairment testing on an annual basis, or when a triggering event occurs that could warrant an impairment. To the extent future revenues less future maintenance expenses are not adequate to cover the asset balance, an impairment is recognized. For the years ended December 31, 2019 and 2018, $24.4 million and $23.8 million, respectively, of amortization expense was recorded in operating expenses on the consolidated statements of operations and no impairment loss was recognized in relation to the costs capitalized.

v3.19.3.a.u2
Stock-Based Compensation Plans
12 Months Ended
Dec. 31, 2019
Stock-Based Compensation Plans  
Stock-Based Compensation Plans

18. Stock-Based Compensation Plans

As of December 31, 2019, we had the 2014 Stock Incentive Plan, the Employee Stock Purchase Plan, the 2014 Directors Stock Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan and the Directors Stock Plan ("Stock-Based Compensation Plans"). As of May 20, 2014, no new grants will be made under the Amended and Restated 2010 Stock Incentive Plan or the 2005 Directors Stock Plan. No grants have been made under the Stock Incentive Plan or the Directors Stock Plan since at least 2005. Under the terms of the 2014 Stock Incentive Plan, grants may be nonqualified stock options, incentive stock options qualifying under Section 422 of the Internal Revenue Code, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance units or other stock-based awards. The 2014 Directors Stock Plan provides for the grant of nonqualified stock options, restricted stock, restricted stock units or other stock-based awards to our nonemployee directors. To date, we have not granted any incentive stock options, restricted stock or performance units under any plans.

As of December 31, 2019, the maximum number of new shares of common stock available for grant under the 2014 Stock Incentive Plan and the 2014 Directors Stock Plan was 6.7 million.

18. Stock Based Compensation Plans – (continued)

For awards with graded vesting, we use an accelerated expense attribution method. The compensation cost that was charged against net income for stock-based awards granted under the Stock-Based Compensation Plans was as follows:

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Compensation cost

$

78.7

$

77.5

$

80.6

Related income tax benefit

16.8

 

16.7

 

27.1

Capitalized as part of an asset

1.7

 

1.9

 

2.5

Nonqualified Stock Options

Nonqualified stock options were granted to certain employees under the 2014 Stock Incentive Plan, the Amended and Restated 2010 Stock Incentive Plan and the Stock Incentive Plan. Options outstanding were granted at an exercise price equal to the fair market value of our common stock on the date of grant and expire ten years after the grant date. These options have graded vesting over a three-year period, except in the case of specific types of terminations. Total options granted were  1.2 million, 0.8 million and 0.7 million during 2019, 2018 and 2017, respectively.

The following is a summary of the status of all of our stock option plans:

Weighted-

 

average

 

    

Number of options

    

exercise price

    

Intrinsic value

 

(in millions)

(in millions)

 

Options outstanding as of January 1, 2019

 

4.2

$

46.77

Granted

1.2

53.09

Exercised

0.1

32.59

Options outstanding as of December 31, 2019

5.3

$

48.42

$

46.6

Options vested or expected to vest as of December 31, 2019

5.3

$

48.41

$

46.6

Options exercisable as of December 31, 2019

3.5

$

44.07

$

44.4

The total intrinsic value of stock options exercised was $2.4 million, $18.7 million and $53.0 million during 2019, 2018, and 2017, respectively.

The following is a summary of weighted-average remaining contractual lives for stock options outstanding and the range of exercise prices on the stock options as of December 31, 2019:

Weighted-

 

Number of options

average remaining

 

Range of exercise prices

    

outstanding

    

contractual life

 

(in millions)

 

$21.70 - $32.32

0.7

2.5

$32.33 - $42.95

1.0

5.3

$42.96 - $53.58

2.2

7.1

$53.59 - $64.22

1.4

7.7

$21.70 - $64.22

5.3

The weighted-average remaining contractual lives for stock options exercisable is approximately 5.0 years as of December 31, 2019.

18. Stock Based Compensation Plans – (continued)

The fair value of stock options is estimated using the Black-Scholes option pricing model. The following is a summary of the assumptions used in this model for the stock options granted during the period:

For the year ended December 31, 

 

Options

    

2019

    

2018

    

2017

 

Expected volatility

23.3

%  

26.0

%  

27.6

%

Expected term (in years)

7.0

7.0

7.0

Risk-free interest rate

2.6

%  

2.8

%  

2.2

%

Expected dividend yield

4.07

%  

3.19

%  

2.87

%

Weighted average estimated fair value

$

10.00

$

14.85

$

15.31

We determine expected volatility based on a combination of historical volatility using daily price observations and implied volatility from traded options on our common stock. We believe that incorporating both historical and implied volatility into our expected volatility assumption calculation better reflects market expectations. The expected term represents the period of time that options granted are expected to be outstanding. We determine expected term using historical exercise and employee termination data. The risk-free rate for periods within the expected term of the option is based on the U.S. Treasury risk-free interest rate in effect at the time of grant. The dividend yield is based on historical dividend distributions compared to the closing price of our common shares on the grant date.

As of December 31, 2019, we had $1.7 million of total unrecognized compensation cost related to nonvested stock options. The cost is expected to be recognized over a weighted-average service period of approximately 1.8 years.

Cash received from stock options exercised under these share-based payment arrangements during 2019, 2018 and 2017 was $3.4 million, $29.0 million and $133.9 million, respectively. The actual tax benefits realized for the tax deductions for options exercised under these share-based payment arrangements during 2019, 2018 and 2017 was $0.5 million, $3.9 million and $18.1 million, respectively.

Performance Share Awards

We granted performance share awards to certain employees under the 2014 Stock Incentive Plan and the Amended and Restated 2010 Stock Incentive Plan. The performance share awards are treated as an equity award and are paid in shares. Whether the performance shares are earned depends upon the participant's continued employment through the performance period (except in the case of specific types of terminations) and our performance against three-year goals set at the beginning of the performance period. Performance goals based on various factors must be achieved for any of the performance shares to be earned. If the performance requirements are not met, the performance shares will be forfeited, no compensation cost will be recognized and any previously recognized compensation cost will be reversed. These awards have no maximum contractual term. Dividend equivalents are credited on performance shares outstanding as of the record date. These dividend equivalents are only paid on the shares released. Total performance share awards granted were 0.2 million, 0.2 million and 0.2 million in 2019, 2018 and 2017, respectively.

The following is a summary of activity for the nonvested performance share awards:

Number of

Weighted-

 

performance

average grant-date

 

    

share awards

    

fair value

 

(in millions)

 

Nonvested performance share awards as of January 1, 2019

 

0.6

$

52.50

Granted

0.2

53.09

Vested

0.3

37.38

Nonvested performance share awards as of December 31, 2019

0.5

$

59.26

The total intrinsic value of performance share awards vested was $17.6 million, $21.5 million and $15.9 million during 2019, 2018 and 2017, respectively.

18. Stock Based Compensation Plans – (continued)

Performance share awards above represent initial target awards and do not reflect potential increases or decreases resulting from the final performance results to be determined at the end of the respective performance period. The actual number of common shares to be awarded at the end of each performance period will range between 0% and 150% of the initial target awards.

The fair value of performance share awards is determined based on the closing stock price of our common shares on the grant date. The weighted-average grant-date fair value of performance share awards granted during 2019, 2018 and 2017 was $53.09, $63.98 and $62.98, respectively.

As of December 31, 2019, we had $2.1 million of total unrecognized compensation cost related to nonvested performance share awards granted. The cost is expected to be recognized over a weighted-average service period of approximately 1.7 years.

Actual tax benefits realized for the tax deductions for performance share awards paid out under these share-based payment arrangements for 2019, 2018 and 2017 was $3.3 million, $3.3 million and $5.4 million, respectively.

Restricted Stock Units

We issue restricted stock units under the 2014 Stock Incentive Plan, the 2014 Directors Stock Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan, and the Directors Stock Plan. Restricted stock units are treated as an equity award and are paid in shares. These awards have no maximum contractual term. Dividend equivalents are credited on restricted stock units outstanding as of the record date. These dividend equivalents are only paid on the shares released. Restricted stock units granted were 1.1 million, 0.8 million and 0.8 million in 2019, 2018 and 2017, respectively.

Restricted stock units were issued to certain employees and agents pursuant to the 2014 Stock Incentive Plan, the Amended and Restated 2010 Stock Incentive Plan and Stock Incentive Plan. Under these plans, awards have graded or cliff vesting over a three-year service period. When service for PFG ceases (except in the case of specific types of terminations), all vesting stops and unvested units are forfeited.

Pursuant to the 2014 Directors Stock Plan and the 2005 Directors Stock Plan, restricted stock units are granted to each non-employee director in office immediately following each annual meeting of stockholders and, at the discretion of the Nominating and Governance Committee, to each person who becomes a member of the Board other than on the date of the annual meeting of stockholders. Under these plans, awards are granted on an annual basis and cliff vest after a one-year service period. When service to PFG ceases, all vesting stops and unvested units are forfeited.

The following is a summary of activity for the nonvested restricted stock units:

Number of

Weighted-

 

restricted

average grant-date

 

    

stock units

    

fair value

 

(in millions)

 

Nonvested restricted stock units as of January 1, 2019

 

2.7

$

52.17

Granted

1.1

53.17

Vested

1.2

38.07

Nonvested restricted stock units as of December 31, 2019

2.6

$

59.15

The total intrinsic value of restricted stock units vested was $64.0 million, $51.1 million and $59.9 during 2019, 2018 and 2017, respectively.

The fair value of restricted stock units is determined based on the closing stock price of our common shares on the grant date. The weighted-average grant-date fair value of restricted stock units granted during 2019, 2018 and 2017 was $53.17, $63.68 and $62.85, respectively.

18. Stock Based Compensation Plans – (continued)

As of December 31, 2019, we had $47.0 million of total unrecognized compensation cost related to nonvested restricted stock unit awards granted under these plans. The cost is expected to be recognized over a weighted-average period of approximately 1.7 years.

The actual tax benefits realized for the tax deductions for restricted stock unit payouts under these share-based payment arrangements for 2019, 2018 and 2017 was $13.2 million, $10.8 million and $20.8 million, respectively.

Employee Stock Purchase Plan

Under our Employee Stock Purchase Plan, participating employees had the opportunity to purchase shares of our common stock on a semi-annual basis through 2017. Beginning in 2018, participating employees had the opportunity to purchase shares of our common stock on a quarterly basis. Employees may purchase up to $25,000 in stock value annually. Employees may purchase shares of our common stock at a price equal to 85% of the shares' fair market value as of the beginning or end of the purchase period, whichever is lower. Under the Employee Stock Purchase Plan, employees purchased 0.9 million, 0.7 million and 0.5 million shares during 2019, 2018 and 2017, respectively.

We recognize compensation expense for the fair value of the discount granted to employees participating in the employee stock purchase plan in the period of grant. Shares of the Employee Stock Purchase Plan are treated as an equity award. The weighted-average fair value of the discount on the stock purchased was $11.37, $9.27 and $14.72 during 2019, 2018 and 2017, respectively. The total intrinsic value of the Employee Stock Purchase Plan shares settled was $9.7 million, $6.1 million and $7.9 million during 2019, 2018 and 2017, respectively.

Cash received from shares issued under these share-based payment arrangements for 2019, 2018 and 2017 was $36.2 million, $30.1 million and $27.6 million, respectively. The actual tax benefit realized for the tax deductions for the settlement of the share-based payment arrangements for 2019, 2018 and 2017 was $0.9 million, $0.7 million and $2.0 million, respectively.

As of December 31, 2019, a total of 1.4 million of new shares were available to be made issuable by us for this plan.

v3.19.3.a.u2
Earnings Per Common Share
12 Months Ended
Dec. 31, 2019
Earnings Per Common Share  
Earnings Per Common Share

19. Earnings Per Common Share

The computations of the basic and diluted per share amounts were as follows:

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions, except per share data)

 

Net income

$

1,444.1

$

1,553.7

$

2,324.5

Subtract:

Net income attributable to noncontrolling interest

49.9

 

7.2

 

14.1

Total

$

1,394.2

$

1,546.5

$

2,310.4

Weighted-average shares outstanding:

Basic

278.6

 

285.8

 

288.9

Dilutive effects:

Stock options

0.9

 

1.0

 

2.0

Restricted stock units

1.4

 

1.7

 

2.0

Performance share awards

0.1

 

0.3

 

0.2

Diluted

281.0

 

288.8

 

293.1

Net income per common share:

Basic

$

5.00

$

5.41

$

8.00

Diluted

$

4.96

$

5.36

$

7.88

The calculation of diluted earnings per share for the years ended December 31, 2019, 2018 and 2017, excludes the incremental effect related to certain outstanding stock-based compensation grants due to their anti-dilutive effect.

v3.19.3.a.u2
Quarterly Results of Operations (Unaudited)
12 Months Ended
Dec. 31, 2019
Quarterly Results of Operations (Unaudited)  
Quarterly Results of Operations (Unaudited)

20. Quarterly Results of Operations (Unaudited)

The following is a summary of unaudited quarterly results of operations.

For the three months ended ,

 

    

December 31

    

September 30

    

June 30

    

March 31

 

(in millions, except per share data)

 

2019

Total revenues

$

4,047.2

$

4,458.4

$

3,972.6

$

3,743.9

Total expenses

3,675.9

 

4,112.7

 

3,522.3

 

3,217.9

Net income

315.3

 

284.6

 

392.1

 

452.1

Net income attributable to PFG

300.9

 

277.1

 

386.3

 

429.9

Basic earnings per common share

1.08

 

0.99

 

1.38

 

1.54

Diluted earnings per common share

1.07

 

0.98

 

1.37

 

1.53

2018

Total revenues

$

3,770.6

$

4,348.1

$

3,234.9

$

2,883.6

Total expenses

3,527.7

 

3,779.0

 

2,719.5

 

2,426.6

Net income

231.7

 

460.0

 

459.5

 

402.5

Net income attributable to PFG

236.5

 

456.3

 

456.6

 

397.1

Basic earnings per common share

0.84

 

1.60

 

1.59

 

1.37

Diluted earnings per common share

0.83

 

1.59

 

1.58

 

1.36

v3.19.3.a.u2
Condensed Consolidating Financial Information
12 Months Ended
Dec. 31, 2019
Condensed Consolidating Financial Information  
Condensed Consolidating Financial Information

21. Condensed Consolidating Financial Information

Principal Life has established special purpose entities to issue secured medium-term notes. Under the program, the payment obligations of principal and interest on the notes are secured by funding agreements issued by Principal Life. Principal Life's payment obligations on the funding agreements are fully and unconditionally guaranteed by PFG. All of the outstanding stock of Principal Life is indirectly owned by PFG and PFG is the only guarantor of the payment obligations of the funding agreements.

The following tables set forth condensed consolidating financial information of (i) PFG, (ii) Principal Life, (iii) PFS and all other direct and indirect subsidiaries of PFG on a combined basis and (iv) the eliminations necessary to arrive at the information for PFG on a consolidated basis as of December 31, 2019 and December 31, 2018, and for the years ended December 31, 2019, 2018 and 2017.

In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) PFG’s interest in all direct subsidiaries of PFG, (ii) Principal Life’s interest in all direct subsidiaries of Principal Life and (iii) PFS’s interest in Principal Life even though all such subsidiaries meet the requirements to be consolidated under U.S. GAAP. Earnings of subsidiaries are, therefore, reflected in the parent’s investment and earnings. All intercompany balances and transactions, including elimination of the parent’s investment in subsidiaries, between PFG, Principal Life and PFS and all other subsidiaries have been eliminated, as shown in the column “Eliminations.” These condensed consolidating financial statements should be read in conjunction with the consolidated financial statements. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the subsidiaries operated as independent entities.

PFG sponsors nonqualified benefit plans for select employees and agents and is responsible for the obligations of these plans. Nonqualified plan assets are held in Rabbi trusts for the benefit of all nonqualified plan participants. The Rabbi trusts are separate legal entities and are not a part of PFG on a stand-alone basis. The plan assets are available to satisfy the claims of general creditors only in the event of bankruptcy and are, therefore, consolidated in our statements of financial position.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Financial Position

December 31, 2019

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined (1)

Eliminations

consolidated

   

(in millions)

 

Assets

Fixed maturities, available-for-sale

$

265.8

$

62,363.1

$

7,833.1

$

(355.8)

$

70,106.2

Fixed maturities, trading

 

268.2

237.5

170.2

675.9

Equity securities

 

69.9

1,809.5

1,879.4

Mortgage loans

 

15,388.5

1,793.5

(695.1)

16,486.9

Real estate

 

3.3

1,711.5

1,714.8

Policy loans

 

742.2

55.8

798.0

Investment in unconsolidated entities

 

17,539.6

5,036.2

6,429.5

(28,175.1)

830.2

Other investments

 

10.4

3,682.5

2,859.6

(2,692.5)

3,860.0

Cash and cash equivalents

 

394.9

1,178.1

1,767.7

(824.8)

2,515.9

Accrued investment income

 

1.6

608.5

81.4

(4.9)

686.6

Premiums due and other receivables

 

2,082.3

4,525.8

(4,867.8)

1,740.3

Deferred acquisition costs

 

3,509.7

11.6

3,521.3

Property and equipment

 

733.9

233.8

967.7

Goodwill

 

54.3

1,639.5

1,693.8

Other intangibles

 

17.7

1,769.0

1,786.7

Separate account assets

 

125,801.7

39,666.3

165,468.0

Other assets

 

383.2

1,118.6

5,358.4

(5,504.1)

1,356.1

Total assets

$

18,863.7

$

222,628.0

$

77,716.2

$

(43,120.1)

$

276,087.8

Liabilities

Contractholder funds

$

$

38,334.6

$

3,388.0

$

(355.1)

$

41,367.5

Future policy benefits and claims

 

35,476.6

6,740.7

(1,379.1)

40,838.2

Other policyholder funds

 

790.3

171.9

(2.8)

959.4

Short-term debt

 

93.4

93.4

Long-term debt

 

3,625.5

763.1

(654.5)

3,734.1

Income taxes currently payable

 

81.7

(65.5)

16.2

Deferred income taxes

 

325.8

1,965.9

(495.1)

1,796.6

Separate account liabilities

 

125,801.7

39,666.3

165,468.0

Other liabilities

 

620.2

10,533.5

7,111.2

(11,401.2)

6,863.7

Total liabilities

 

4,245.7

211,262.5

59,982.2

(14,353.3)

261,137.1

Redeemable noncontrolling interest

 

264.9

264.9

Stockholders' equity

Common stock

 

4.8

2.5

(2.5)

4.8

Additional paid-in capital

 

10,182.6

6,331.5

10,038.7

(16,370.2)

10,182.6

Retained earnings

 

11,074.3

2,410.8

6,414.3

(8,825.1)

11,074.3

Accumulated other comprehensive income

 

1,037.9

2,620.7

948.3

(3,569.0)

1,037.9

Treasury stock, at cost

 

(7,681.6)

(7,681.6)

Total stockholders' equity attributable to PFG

 

14,618.0

11,365.5

17,401.3

(28,766.8)

14,618.0

Noncontrolling interest

 

67.8

67.8

Total stockholders’ equity

 

14,618.0

11,365.5

17,469.1

(28,766.8)

14,685.8

Total liabilities and stockholders' equity

$

18,863.7

$

222,628.0

$

77,716.2

$

(43,120.1)

$

276,087.8

(1)PFG sponsors nonqualified benefit plans. Nonqualified benefit plan assets and liabilities held in Rabbi trusts were $731.9 million and $593.7 million, respectively.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Financial Position

December 31, 2018

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined (1)

Eliminations

consolidated

   

(in millions)

 

Assets

Fixed maturities, available-for-sale

$

211.5

$

53,401.7

$

6,857.9

$

(362.6)

$

60,108.5

Fixed maturities, trading

 

308.9

165.5

161.7

636.1

Equity securities

 

84.8

1,758.9

1,843.7

Mortgage loans

 

14,478.0

1,615.5

(756.6)

15,336.9

Real estate

 

1.9

1,727.8

1,729.7

Policy loans

 

755.9

45.5

801.4

Investment in unconsolidated entities

 

13,862.4

2,324.4

6,853.8

(22,171.8)

868.8

Other investments

 

10.7

5,549.1

2,517.6

(4,635.9)

3,441.5

Cash and cash equivalents

 

334.9

1,323.9

2,014.8

(696.1)

2,977.5

Accrued investment income

 

1.4

563.2

77.5

(5.9)

636.2

Premiums due and other receivables

 

1,818.1

3,781.3

(4,186.3)

1,413.1

Deferred acquisition costs

 

3,680.2

13.3

3,693.5

Property and equipment

 

661.3

106.0

767.3

Goodwill

 

54.3

1,045.7

1,100.0

Other intangibles

 

19.7

1,295.4

1,315.1

Separate account assets

 

107,343.0

37,644.9

144,987.9

Other assets

 

375.0

1,135.1

4,418.3

(4,549.5)

1,378.9

Total assets

$

15,104.8

$

193,360.1

$

71,935.9

$

(37,364.7)

$

243,036.1

Liabilities

Contractholder funds

$

$

36,861.7

$

3,189.2

$

(351.2)

$

39,699.7

Future policy benefits and claims

 

30,690.3

6,128.6

(1,154.1)

35,664.8

Other policyholder funds

 

725.7

165.3

(2.6)

888.4

Short-term debt

 

42.9

42.9

Long-term debt

 

3,129.8

851.2

(721.4)

3,259.6

Income taxes currently payable

 

80.7

(55.4)

25.3

Deferred income taxes

 

405.3

1,056.4

(503.3)

958.4

Separate account liabilities

 

107,343.0

37,644.9

144,987.9

Other liabilities

 

585.0

8,503.2

8,586.5

(12,012.8)

5,661.9

Total liabilities

 

3,714.8

184,529.2

57,745.7

(14,800.8)

231,188.9

Redeemable noncontrolling interest

 

391.2

391.2

Stockholders' equity

Common stock

 

4.8

2.5

(2.5)

4.8

Additional paid-in capital

 

10,060.7

6,331.6

9,461.2

(15,792.8)

10,060.7

Retained earnings

 

10,290.2

2,441.2

5,855.0

(8,296.2)

10,290.2

Accumulated other comprehensive income (loss)

 

(1,565.1)

55.6

(1,583.2)

1,527.6

(1,565.1)

Treasury stock, at cost

 

(7,400.6)

(7,400.6)

Total stockholders' equity attributable to PFG

 

11,390.0

8,830.9

13,733.0

(22,563.9)

11,390.0

Noncontrolling interest

 

66.0

66.0

Total stockholders’ equity

 

11,390.0

8,830.9

13,799.0

(22,563.9)

11,456.0

Total liabilities and stockholders' equity

$

15,104.8

$

193,360.1

$

71,935.9

$

(37,364.7)

$

243,036.1

(1)PFG sponsors nonqualified benefit plans. Nonqualified benefit plan assets and liabilities held in Rabbi trusts were $671.7 million and $542.4 million, respectively.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2019

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

7,189.2

$

677.4

$

$

7,866.6

Fees and other revenues

 

2,343.9

2,461.9

(395.9)

4,409.9

Net investment income

 

19.4

2,843.7

2,223.9

(1,088.6)

3,998.4

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

 

12.3

(3,509.5)

3,488.5

(0.6)

(9.3)

Net other-than-temporary impairment losses on available-for-sale securities

 

(35.6)

(2.7)

(38.3)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

 

(4.7)

(0.5)

(5.2)

Net impairment losses on available-for-sale securities

 

(40.3)

(3.2)

(43.5)

Net realized capital gains (losses)

 

12.3

(3,549.8)

3,485.3

(0.6)

(52.8)

Total revenues

 

31.7

8,827.0

8,848.5

(1,485.1)

16,222.1

Expenses

Benefits, claims and settlement expenses

 

8,940.7

976.4

(11.3)

9,905.8

Dividends to policyholders

 

119.1

119.1

Operating expenses

 

210.9

2,460.0

2,206.2

(373.2)

4,503.9

Total expenses

 

210.9

11,519.8

3,182.6

(384.5)

14,528.8

Income (loss) before income taxes

 

(179.2)

(2,692.8)

5,665.9

(1,100.6)

1,693.3

Income taxes (benefits)

 

(44.2)

(685.5)

980.2

(1.3)

249.2

Equity in the net income (loss) of subsidiaries

 

1,529.2

3,121.0

(3,115.6)

(1,534.6)

Net income

 

1,394.2

1,113.7

1,570.1

(2,633.9)

1,444.1

Net income attributable to noncontrolling interest

 

49.9

49.9

Net income attributable to PFG

$

1,394.2

$

1,113.7

$

1,520.2

$

(2,633.9)

$

1,394.2

Net income

$

1,394.2

$

1,113.7

$

1,570.1

$

(2,633.9)

$

1,444.1

Other comprehensive income

 

2,570.9

2,564.6

2,654.0

(5,182.8)

2,606.7

Comprehensive income

$

3,965.1

$

3,678.3

$

4,224.1

$

(7,816.7)

$

4,050.8

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2018

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

5,846.0

$

563.6

$

$

6,409.6

Fees and other revenues

 

2,174.4

2,487.0

(387.6)

4,273.8

Net investment income

 

25.8

2,655.7

2,192.6

(1,244.9)

3,629.2

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

 

(8.2)

118.8

(175.1)

18.2

(46.3)

Net other-than-temporary impairment (losses) recoveries on available-for-sale securities

 

14.1

(3.5)

10.6

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income

 

(40.1)

0.4

(39.7)

Net impairment losses on available-for-sale securities

 

(26.0)

(3.1)

(29.1)

Net realized capital gains (losses)

 

(8.2)

92.8

(178.2)

18.2

(75.4)

Total revenues

 

17.6

10,768.9

5,065.0

(1,614.3)

14,237.2

Expenses

Benefits, claims and settlement expenses

 

7,346.3

857.1

(10.9)

8,192.5

Dividends to policyholders

 

123.6

123.6

Operating expenses

 

191.9

2,320.1

1,982.7

(358.0)

4,136.7

Total expenses

 

191.9

9,790.0

2,839.8

(368.9)

12,452.8

Income (loss) before income taxes

 

(174.3)

978.9

2,225.2

(1,245.4)

1,784.4

Income taxes (benefits)

 

(62.5)

60.0

235.0

(1.8)

230.7

Equity in the net income (loss) of subsidiaries

 

1,658.3

334.7

(335.3)

(1,657.7)

Net income

 

1,546.5

1,253.6

1,654.9

(2,901.3)

1,553.7

Net income attributable to noncontrolling interest

 

7.2

7.2

Net income attributable to PFG

$

1,546.5

$

1,253.6

$

1,647.7

$

(2,901.3)

$

1,546.5

Net income

$

1,546.5

$

1,253.6

$

1,654.9

$

(2,901.3)

$

1,553.7

Other comprehensive loss

 

(1,824.5)

(1,548.5)

(1,928.5)

3,465.8

(1,835.7)

Comprehensive loss

$

(278.0)

$

(294.9)

$

(273.6)

$

564.5

$

(282.0)

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2017

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

5,777.7

$

439.7

$

$

6,217.4

Fees and other revenues

 

7.8

 

2,140.9

 

2,163.4

 

(419.8)

 

3,892.3

Net investment income

 

9.7

 

2,533.1

 

3,180.9

 

(2,264.4)

 

3,459.3

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

 

(0.6)

 

(84.5)

 

691.8

 

(0.7)

 

606.0

Net other-than-temporary impairment losses on available-for-sale securities

 

 

(28.2)

 

(0.5)

 

 

(28.7)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

 

 

(46.4)

 

(6.7)

 

 

(53.1)

Net impairment losses on available-for-sale securities

 

 

(74.6)

 

(7.2)

 

 

(81.8)

Net realized capital gains (losses)

 

(0.6)

 

(159.1)

 

684.6

 

(0.7)

 

524.2

Total revenues

 

16.9

 

10,292.6

 

6,468.6

 

(2,684.9)

 

14,093.2

Expenses

Benefits, claims and settlement expenses

 

 

7,153.5

 

679.9

 

(10.8)

 

7,822.6

Dividends to policyholders

 

 

124.6

 

 

 

124.6

Operating expenses

 

238.1

 

2,185.4

 

1,823.2

 

(352.9)

 

3,893.8

Total expenses

 

238.1

 

9,463.5

 

2,503.1

 

(363.7)

 

11,841.0

Income (loss) before income taxes

 

(221.2)

 

829.1

 

3,965.5

 

(2,321.2)

 

2,252.2

Income taxes (benefits)

 

63.1

 

(540.1)

 

376.4

 

28.3

 

(72.3)

Equity in the net income (loss) of subsidiaries (1)

 

2,594.7

 

901.5

 

(1,005.3)

 

(2,490.9)

 

Net income

2,310.4

2,270.7

2,583.8

 

(4,840.4)

 

2,324.5

Net income attributable to noncontrolling interest

 

 

 

14.1

 

 

14.1

Net income attributable to PFG

$

2,310.4

$

2,270.7

$

2,569.7

$

(4,840.4)

$

2,310.4

Net income

$

2,310.4

$

2,270.7

$

2,583.8

$

(4,840.4)

$

2,324.5

Other comprehensive income

 

840.3

611.6

877.6

(1,485.2)

844.3

Comprehensive income

$

3,150.7

$

2,882.3

$

3,461.4

$

(6,325.6)

$

3,168.8

(1)Principal Life Insurance Company Only includes income from discontinued operations of $35.5 million related to its sale of Principal Global Investors, LLC to PFS in connection with a corporate reorganization.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2019

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Operating activities

Net cash provided by operating activities

$

7.1

$

2,292.0

$

650.5

$

2,543.6

$

5,493.2

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

(251.5)

(11,482.9)

(2,402.7)

(14,137.1)

Sales

1,411.0

988.9

(2.5)

2,397.4

Maturities

200.0

6,123.0

741.2

7,064.2

Mortgage loans acquired or originated

(2,943.6)

(555.9)

11.8

(3,487.7)

Mortgage loans sold or repaid

2,030.8

372.0

(66.9)

2,335.9

Real estate acquired

(0.3)

(127.2)

(127.5)

Real estate sold

96.3

96.3

Net purchases of property and equipment

(0.1)

(52.9)

(79.4)

(132.4)

Purchase of business or interests in subsidiaries, net of cash acquired

(1,208.5)

(1,208.5)

Dividends and returns of capital received from unconsolidated entities

494.2

2.2

1,169.2

(1,665.6)

Net change in other investments

(34.0)

2,646.8

(420.3)

(2,681.6)

(489.1)

Net cash provided by (used in) investing activities

408.6

(2,265.9)

(1,426.4)

(4,404.8)

(7,688.5)

Financing activities

Issuance of common stock

37.7

37.7

Acquisition of treasury stock

(281.0)

(281.0)

Payments for financing element derivatives

(26.9)

(26.9)

Purchase of subsidiary shares from noncontrolling interest

(1.7)

(1.7)

Dividends to common stockholders

(606.0)

(606.0)

Issuance of long-term debt

493.6

11.3

504.9

Principal repayments of long-term debt

(99.1)

66.9

(32.2)

Net proceeds from short-term borrowings

57.5

57.5

Dividends and capital paid to parent

(1,169.2)

(496.4)

1,665.6

Investment contract deposits

8,727.6

472.4

9,200.0

Investment contract withdrawals

(7,709.4)

(38.3)

(7,747.7)

Net increase in banking operation deposits

623.4

623.4

Other

6.0

(0.3)

5.7

Net cash provided by (used in) financing activities

(355.7)

(171.9)

528.8

1,732.5

1,733.7

Net increase (decrease) in cash and cash equivalents

60.0

(145.8)

(247.1)

(128.7)

(461.6)

Cash and cash equivalents at beginning of period

 

334.9

1,323.9

2,014.8

(696.1)

2,977.5

Cash and cash equivalents at end of period

$

394.9

$

1,178.1

$

1,767.7

$

(824.8)

$

2,515.9

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2018

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

(132.4)

$

5,410.9

$

473.1

$

(595.1)

$

5,156.5

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

(210.9)

(11,457.5)

(2,249.2)

7.8

(13,909.8)

Sales

2,557.9

1,255.2

3,813.1

Maturities

2.3

5,660.9

554.4

6,217.6

Mortgage loans acquired or originated

(3,060.0)

(497.0)

109.5

(3,447.5)

Mortgage loans sold or repaid

1,967.4

297.8

(36.8)

2,228.4

Real estate acquired

(88.1)

(88.1)

Real estate sold

63.5

63.5

Net purchases of property and equipment

(0.1)

(50.5)

(41.7)

(92.3)

Purchase of business or interests in subsidiaries, net of cash acquired

(184.7)

(184.7)

Dividends and returns of capital received from unconsolidated entities

1,041.6

50.1

861.6

(1,953.3)

Net change in other investments

(2.2)

(626.1)

120.7

204.9

(302.7)

Net cash provided by (used in) investing activities

830.7

(4,957.8)

92.5

(1,667.9)

(5,702.5)

Financing activities

Issuance of common stock

64.0

64.0

Acquisition of treasury stock

(671.6)

(671.6)

Payments for financing element derivatives

(65.9)

(65.9)

Purchase of subsidiary shares from noncontrolling interest

(31.1)

(31.1)

Dividends to common stockholders

(598.6)

(598.6)

Issuance of long-term debt

178.9

(98.1)

80.8

Principal repayments of long-term debt

(38.1)

36.8

(1.3)

Net proceeds from short-term borrowings

8.5

8.5

Dividends and capital paid to parent

(861.6)

(1,091.7)

1,953.3

Investment contract deposits

7,896.0

412.8

8,308.8

Investment contract withdrawals

(6,520.1)

(69.5)

(6,589.6)

Net increase in banking operation deposits

553.0

553.0

Other

(4.3)

(4.3)

Net cash provided by (used in) financing activities

(1,206.2)

444.1

(77.2)

1,892.0

1,052.7

Net increase (decrease) in cash and cash equivalents

(507.9)

897.2

488.4

(371.0)

506.7

Cash and cash equivalents at beginning of period

 

842.8

 

426.7

 

1,526.4

 

(325.1)

 

2,470.8

Cash and cash equivalents at end of period

$

334.9

$

1,323.9

$

2,014.8

$

(696.1)

$

2,977.5

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2017

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

(443.2)

$

5,571.5

$

(2,114.7)

$

1,174.4

$

4,188.0

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

 

 

(12,054.5)

 

(1,317.1)

 

 

(13,371.6)

Sales

 

 

1,005.3

 

425.1

 

(16.8)

 

1,413.6

Maturities

 

 

7,894.7

 

848.5

 

 

8,743.2

Mortgage loans acquired or originated

 

 

(2,629.8)

 

(448.1)

 

322.1

 

(2,755.8)

Mortgage loans sold or repaid

 

 

1,696.2

 

388.4

 

(212.6)

 

1,872.0

Real estate acquired

 

 

 

(200.5)

 

 

(200.5)

Real estate sold

481.9

481.9

Net purchases of property and equipment

 

(0.1)

 

(108.1)

 

(56.6)

 

 

(164.8)

Dividends and returns of capital received from unconsolidated entities

 

1,002.5

 

149.7

 

1,845.9

 

(2,998.1)

 

Net change in other investments

 

(1.1)

 

281.9

 

155.4

 

(507.0)

 

(70.8)

Net cash provided by (used in) investing activities

 

1,001.3

 

(3,764.6)

 

2,122.9

 

(3,412.4)

 

(4,052.8)

Financing activities

Issuance of common stock

 

162.5

 

 

 

 

162.5

Acquisition of treasury stock

 

(220.4)

 

 

 

 

(220.4)

Proceeds from financing element derivatives

 

 

0.1

 

 

 

0.1

Payments for financing element derivatives

 

 

(77.6)

 

 

 

(77.6)

Purchase of subsidiary shares from noncontrolling interest

 

 

 

(16.2)

 

2.9

 

(13.3)

Sale of subsidiary shares to noncontrolling interest

 

 

 

2.9

 

(2.9)

 

Dividends to common stockholders

 

(540.0)

 

 

 

 

(540.0)

Issuance of long-term debt

 

 

 

380.5

 

(377.7)

 

2.8

Principal repayments of long-term debt

 

 

 

(269.9)

 

213.4

 

(56.5)

Net repayments of short-term borrowings

 

 

 

(15.5)

 

 

(15.5)

Dividends and capital paid to parent

 

 

(1,845.9)

 

(1,152.2)

 

2,998.1

 

Investment contract deposits

 

 

9,760.5

 

393.9

 

 

10,154.4

Investment contract withdrawals

 

 

(9,889.9)

 

(24.7)

 

 

(9,914.6)

Net increase in banking operation deposits

 

 

 

136.6

 

 

136.6

Other

 

 

(2.5)

 

 

 

(2.5)

Net cash used in financing activities

 

(597.9)

 

(2,055.3)

 

(564.6)

 

2,833.8

 

(384.0)

Net decrease in cash and cash equivalents

 

(39.8)

 

(248.4)

 

(556.4)

 

595.8

 

(248.8)

Cash and cash equivalents at beginning of period

 

882.6

 

675.1

 

2,082.8

 

(920.9)

 

2,719.6

Cash and cash equivalents at end of period

$

842.8

$

426.7

$

1,526.4

$

(325.1)

$

2,470.8

21. Condensed Consolidating Financial Information – (continued)

Under our current shelf registration that was filed with the SEC and became effective May 3, 2017, we have the ability to issue, in unlimited amounts, unsecured senior debt securities or subordinated debt securities, junior subordinated debt, preferred stock, common stock, warrants, depositary shares, purchase contracts and purchase units of PFG. Our wholly owned subsidiary, PFS, may guarantee, fully and unconditionally or otherwise, our obligations with respect to any non-convertible securities, other than common stock, described in the shelf registration.

The following tables set forth condensed consolidating financial information of (i) PFG, (ii) PFS, (iii) Principal Life and all other direct and indirect subsidiaries of PFG on a combined basis and (iv) the eliminations necessary to arrive at the information for PFG on a consolidated basis as of December 31, 2019 and December 31, 2018, and for the years ended December 31, 2019, 2018  and 2017.

In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) PFG’s interest in all direct subsidiaries of PFG and (ii) PFS’s interest in Principal Life and all other subsidiaries, where applicable, even though all such subsidiaries meet the requirements to be consolidated under U.S. GAAP. Earnings of subsidiaries are, therefore, reflected in the parent’s investment and earnings. All intercompany balances and transactions, including elimination of the parent’s investment in subsidiaries, between PFG, PFS and Principal Life and all other subsidiaries have been eliminated, as shown in the column “Eliminations.” These condensed consolidating financial statements should be read in conjunction with the consolidated financial statements. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the subsidiaries operated as independent entities.

PFG sponsors nonqualified benefit plans for select employees and agents and is responsible for the obligations of these plans. Nonqualified plan assets are held in Rabbi trusts for the benefit of all nonqualified plan participants. The Rabbi trusts are separate legal entities and are not a part of PFG on a stand-alone basis. The plan assets are available to satisfy the claims of general creditors only in the event of bankruptcy and are, therefore, consolidated in our statements of financial position.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Financial Position

December 31, 2019

Principal Life

 

Principal

Principal

Insurance Company

Principal

 

Financial

Financial

and other

Financial

 

Group, Inc.

Services, Inc.

subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Assets

Fixed maturities, available-for-sale

$

265.8

$

$

69,840.4

$

$

70,106.2

Fixed maturities, trading

268.2

407.7

675.9

Equity securities

41.4

1,838.0

1,879.4

Mortgage loans

16,486.9

16,486.9

Real estate

1,714.8

1,714.8

Policy loans

798.0

798.0

Investment in unconsolidated entities

17,539.6

16,664.1

649.4

(34,022.9)

830.2

Other investments

10.4

251.9

3,597.7

3,860.0

Cash and cash equivalents

394.9

598.4

2,656.2

(1,133.6)

2,515.9

Accrued investment income

1.6

0.4

684.6

686.6

Premiums due and other receivables

100.0

1,961.1

(320.8)

1,740.3

Deferred acquisition costs

3,521.3

3,521.3

Property and equipment

967.7

967.7

Goodwill

618.5

1,075.3

1,693.8

Other intangibles

531.7

1,255.0

1,786.7

Separate account assets

165,468.0

165,468.0

Other assets

383.2

35.2

1,509.5

(571.8)

1,356.1

Total assets

$

18,863.7

$

18,841.6

$

274,431.6

$

(36,049.1)

$

276,087.8

Liabilities

Contractholder funds

$

$

$

41,367.5

$

$

41,367.5

Future policy benefits and claims

40,838.2

40,838.2

Other policyholder funds

959.4

959.4

Short-term debt

93.4

93.4

Long-term debt

3,625.5

320.7

108.7

(320.8)

3,734.1

Income taxes currently payable

66.4

(50.2)

16.2

Deferred income taxes

5.9

2,285.8

(495.1)

1,796.6

Separate account liabilities

165,468.0

165,468.0

Other liabilities

620.2

1,113.6

6,104.7

(974.8)

6,863.7

Total liabilities

4,245.7

1,440.2

257,292.1

(1,840.9)

261,137.1

Redeemable noncontrolling interest

264.9

264.9

Stockholders' equity

Common stock

4.8

11.0

(11.0)

4.8

Additional paid-in capital

10,182.6

9,658.3

12,157.9

(21,816.2)

10,182.6

Retained earnings

11,074.3

6,263.5

2,985.1

(9,248.6)

11,074.3

Accumulated other comprehensive income

1,037.9

1,479.6

1,654.8

(3,134.4)

1,037.9

Treasury stock, at cost

(7,681.6)

(2.0)

2.0

(7,681.6)

Total stockholders' equity attributable to PFG

14,618.0

17,401.4

16,806.8

(34,208.2)

14,618.0

Noncontrolling interest

67.8

67.8

Total stockholders' equity

14,618.0

17,401.4

16,874.6

(34,208.2)

14,685.8

Total liabilities and stockholders' equity

$

18,863.7

$

18,841.6

$

274,431.6

$

(36,049.1)

$

276,087.8

(1)

PFG sponsors nonqualified benefit plans. Nonqualified benefit plan assets and liabilities held in Rabbi trusts were $731.9 million and $593.7 million, respectively.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Financial Position

December 31, 2018

Principal Life

 

Principal

Principal

Insurance Company

Principal

 

Financial

Financial

and other

Financial

 

Group, Inc.

Services, Inc.

subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Assets

Fixed maturities, available-for-sale

$

211.5

$

$

59,897.0

$

$

60,108.5

Fixed maturities, trading

308.9

327.2

636.1

Equity securities

11.9

1,831.8

1,843.7

Mortgage loans

15,336.9

15,336.9

Real estate

1,729.7

1,729.7

Policy loans

801.4

801.4

Investment in unconsolidated entities

13,862.4

14,325.5

726.0

(28,045.1)

868.8

Other investments

10.7

100.9

3,329.9

3,441.5

Cash and cash equivalents

334.9

649.0

3,096.8

(1,103.2)

2,977.5

Accrued investment income

1.4

0.3

634.5

636.2

Premiums due and other receivables

0.5

1,779.6

(367.0)

1,413.1

Deferred acquisition costs

3,693.5

3,693.5

Property and equipment

767.3

767.3

Goodwill

1,100.0

1,100.0

Other intangibles

1,315.1

1,315.1

Separate account assets

144,987.9

144,987.9

Other assets

375.0

38.7

1,521.9

(556.7)

1,378.9

Total assets

$

15,104.8

$

15,126.8

$

242,876.5

$

(30,072.0)

$

243,036.1

Liabilities

Contractholder funds

$

$

$

39,699.7

$

$

39,699.7

Future policy benefits and claims

35,664.8

35,664.8

Other policyholder funds

888.4

888.4

Short-term debt

42.9

42.9

Long-term debt

3,129.8

366.7

129.9

(366.8)

3,259.6

Income taxes currently payable

9.8

61.5

(46.0)

25.3

Deferred income taxes

13.9

1,446.4

(501.9)

958.4

Separate account liabilities

144,987.9

144,987.9

Other liabilities

585.0

1,002.9

4,838.1

(764.1)

5,661.9

Total liabilities

3,714.8

1,393.3

227,759.6

(1,678.8)

231,188.9

Redeemable noncontrolling interest

391.2

391.2

Stockholders' equity

Common stock

4.8

11.0

(11.0)

4.8

Additional paid-in capital

10,060.7

9,100.0

12,004.5

(21,104.5)

10,060.7

Retained earnings

10,290.2

5,716.8

3,549.8

(9,266.6)

10,290.2

Accumulated other comprehensive loss

(1,565.1)

(1,083.3)

(903.6)

1,986.9

(1,565.1)

Treasury stock, at cost

(7,400.6)

(2.0)

2.0

(7,400.6)

Total stockholders' equity attributable to PFG

11,390.0

13,733.5

14,659.7

(28,393.2)

11,390.0

Noncontrolling interest

66.0

66.0

Total stockholders' equity

11,390.0

13,733.5

14,725.7

(28,393.2)

11,456.0

Total liabilities and stockholders' equity

$

15,104.8

$

15,126.8

$

242,876.5

$

(30,072.0)

$

243,036.1

(1)PFG sponsors nonqualified benefit plans. Nonqualified benefit plan assets and liabilities held in Rabbi trusts were $671.7 million and $542.4 million, respectively.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2019

    

    

Principal Life

    

    

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

$

7,866.6

$

$

7,866.6

Fees and other revenues

205.9

4,215.5

(11.5)

4,409.9

Net investment income (loss)

19.4

(6.5)

3,975.1

10.4

3,998.4

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

12.3

17.5

(38.9)

(0.2)

(9.3)

Net other-than-temporary impairment losses on available-for-sale securities

(38.3)

(38.3)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

(5.2)

(5.2)

Net impairment losses on available-for-sale securities

(43.5)

(43.5)

Net realized capital gains (losses)

12.3

17.5

(82.4)

(0.2)

(52.8)

Total revenues

31.7

216.9

15,974.8

(1.3)

16,222.1

Expenses

Benefits, claims and settlement expenses

9,905.8

9,905.8

Dividends to policyholders

119.1

119.1

Operating expenses

210.9

368.2

3,935.1

(10.3)

4,503.9

Total expenses

210.9

368.2

13,960.0

(10.3)

14,528.8

Income (loss) before income taxes

(179.2)

(151.3)

2,014.8

9.0

1,693.3

Income taxes (benefits)

(44.2)

(11.8)

305.2

249.2

Equity in the net income of subsidiaries

1,529.2

1,659.7

(3,188.9)

Net income

1,394.2

1,520.2

1,709.6

(3,179.9)

1,444.1

Net income attributable to noncontrolling interest

49.9

49.9

Net income attributable to PFG

$

1,394.2

$

1,520.2

$

1,659.7

$

(3,179.9)

$

1,394.2

Net income

$

1,394.2

$

1,520.2

$

1,709.6

$

(3,179.9)

$

1,444.1

Other comprehensive income

2,570.9

2,530.9

2,562.2

(5,057.3)

2,606.7

Comprehensive income

$

3,965.1

$

4,051.1

$

4,271.8

$

(8,237.2)

$

4,050.8

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2018

    

    

Principal Life

    

    

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

$

6,409.6

$

$

6,409.6

Fees and other revenues

2.7

4,286.4

(15.3)

4,273.8

Net investment income (loss)

25.8

(6.7)

3,598.0

12.1

3,629.2

Net realized capital losses, excluding impairment losses on available-for-sale securities

(8.2)

(3.5)

(34.6)

(46.3)

Net other-than-temporary impairment recoveries on available-for-sale securities

10.6

10.6

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

(39.7)

(39.7)

Net impairment losses on available-for-sale securities

(29.1)

(29.1)

Net realized capital losses

(8.2)

(3.5)

(63.7)

(75.4)

Total revenues

17.6

(7.5)

14,230.3

(3.2)

14,237.2

Expenses

Benefits, claims and settlement expenses

8,192.5

8,192.5

Dividends to policyholders

123.6

123.6

Operating expenses

191.9

29.1

3,929.5

(13.8)

4,136.7

Total expenses

191.9

29.1

12,245.6

(13.8)

12,452.8

Income (loss) before income taxes

(174.3)

(36.6)

1,984.7

10.6

1,784.4

Income taxes (benefits)

(62.5)

0.2

293.0

230.7

Equity in the net income of subsidiaries

1,658.3

1,684.5

(3,342.8)

Net income

1,546.5

1,647.7

1,691.7

(3,332.2)

1,553.7

Net income attributable to noncontrolling interest

7.2

7.2

Net income attributable to PFG

$

1,546.5

$

1,647.7

$

1,684.5

$

(3,332.2)

$

1,546.5

Net income

$

1,546.5

$

1,647.7

$

1,691.7

$

(3,332.2)

$

1,553.7

Other comprehensive loss

(1,824.5)

(1,839.1)

(1,856.4)

3,684.3

(1,835.7)

Comprehensive loss

$

(278.0)

$

(191.4)

$

(164.7)

$

352.1

$

(282.0)

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2017

  

  

Principal Life

  

   

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

$

6,217.4

$

$

6,217.4

Fees and other revenues

 

7.8

0.2

3,894.7

(10.4)

3,892.3

Net investment income (loss)

 

9.7

(2.8)

3,396.5

55.9

3,459.3

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

 

(0.6)

4.2

602.4

606.0

Net other-than-temporary impairment losses on available-for-sale securities

 

(28.7)

(28.7)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

 

(53.1)

(53.1)

Net impairment losses on available-for-sale securities

 

(81.8)

(81.8)

Net realized capital gains (losses)

 

(0.6)

4.2

520.6

524.2

Total revenues

 

16.9

1.6

14,029.2

45.5

14,093.2

Expenses

Benefits, claims and settlement expenses

 

7,822.6

7,822.6

Dividends to policyholders

 

124.6

124.6

Operating expenses

 

238.1

48.4

3,616.9

(9.6)

3,893.8

Total expenses

 

238.1

48.4

11,564.1

(9.6)

11,841.0

Income (loss) before income taxes

 

(221.2)

(46.8)

2,465.1

55.1

2,252.2

Income taxes (benefits)

 

63.1

115.4

(280.9)

30.1

(72.3)

Equity in the net income of subsidiaries

 

2,594.7

2,731.9

(5,326.6)

Net income

 

2,310.4

2,569.7

2,746.0

(5,301.6)

2,324.5

Net income attributable to noncontrolling interest

 

14.1

14.1

Net income attributable to PFG

$

2,310.4

$

2,569.7

$

2,731.9

$

(5,301.6)

$

2,310.4

Net income

$

2,310.4

$

2,569.7

$

2,746.0

$

(5,301.6)

$

2,324.5

Other comprehensive income

 

840.3

809.8

801.8

(1,607.6)

844.3

Comprehensive income

$

3,150.7

$

3,379.5

$

3,547.8

$

(6,909.2)

$

3,168.8

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2019

Principal Life

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

7.1

$

(54.7)

$

5,760.7

$

(219.9)

$

5,493.2

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

(251.5)

(0.2)

(13,885.4)

(14,137.1)

Sales

0.2

2,397.2

2,397.4

Maturities

200.0

6,864.2

7,064.2

Mortgage loans acquired or originated

(3,487.7)

(3,487.7)

Mortgage loans sold or repaid

2,335.9

2,335.9

Real estate acquired

(127.5)

(127.5)

Real estate sold

96.3

96.3

Net purchases of property and equipment

(0.1)

(2.0)

(130.3)

(132.4)

Purchase of business or interests in subsidiaries, net of cash acquired

(1,209.6)

1.1

(1,208.5)

Dividends and returns of capital received from unconsolidated entities

494.2

2,118.7

(2,612.9)

Net change in other investments

(34.0)

(362.9)

(235.8)

143.6

(489.1)

Net cash provided by (used in) investing activities

408.6

544.2

(6,172.0)

(2,469.3)

(7,688.5)

Financing activities

Issuance of common stock

37.7

37.7

Acquisition of treasury stock

(281.0)

(281.0)

Payments for financing element derivatives

(26.9)

(26.9)

Purchase of subsidiary shares from noncontrolling interest

(1.7)

(1.7)

Dividends to common stockholders

(606.0)

(606.0)

Issuance of long-term debt

493.6

10.0

11.3

(10.0)

504.9

Principal repayments of long-term debt

(55.9)

(32.2)

55.9

(32.2)

Net proceeds from short-term borrowings

57.5

57.5

Dividends and capital paid to parent

(494.2)

(2,118.7)

2,612.9

Investment contract deposits

9,200.0

9,200.0

Investment contract withdrawals

(7,747.7)

(7,747.7)

Net increase in banking operation deposits

623.4

623.4

Other

5.7

5.7

Net cash provided by (used in) financing activities

(355.7)

(540.1)

(29.3)

2,658.8

1,733.7

Net increase (decrease) in cash and cash equivalents

60.0

(50.6)

(440.6)

(30.4)

(461.6)

Cash and cash equivalents at beginning of period

 

334.9

649.0

3,096.8

(1,103.2)

2,977.5

Cash and cash equivalents at end of period

$

394.9

$

598.4

$

2,656.2

$

(1,133.6)

$

2,515.9

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2018

    

    

    

    

    

Principal Life

    

    

    

    

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

   

parent only

   

only

   

combined (1)

   

Eliminations

   

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

(132.4)

$

696.3

$

5,030.9

$

(438.3)

$

5,156.5

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

(210.9)

(13,698.9)

(13,909.8)

Sales

3,813.1

3,813.1

Maturities

2.3

6,215.3

6,217.6

Mortgage loans acquired or originated

(3,447.5)

(3,447.5)

Mortgage loans sold or repaid

2,228.4

2,228.4

Real estate acquired

(88.1)

(88.1)

Real estate sold

63.5

63.5

Net purchases of property and equipment

(0.1)

(92.2)

(92.3)

Purchase of business or interests in subsidiaries, net of cash acquired

(184.7)

(184.7)

Dividends and returns of capital received from unconsolidated entities

1,041.6

589.1

(1,630.7)

Net change in other investments

(2.2)

(166.2)

(413.9)

279.6

(302.7)

Net cash provided by (used in) investing activities

830.7

422.9

(5,605.0)

(1,351.1)

(5,702.5)

Financing activities

Issuance of common stock

64.0

64.0

Acquisition of treasury stock

(671.6)

(671.6)

Payments for financing element derivatives

(65.9)

(65.9)

Purchase of subsidiary shares from noncontrolling interest

(31.1)

(31.1)

Dividends to common stockholders

(598.6)

(598.6)

Issuance of long-term debt

11.1

80.8

(11.1)

80.8

Principal repayments of long-term debt

(57.1)

(1.3)

57.1

(1.3)

Net proceeds from short-term borrowings

8.5

8.5

Dividends and capital paid to parent

(1,041.6)

(589.1)

1,630.7

Investment contract deposits

8,308.8

8,308.8

Investment contract withdrawals

(6,589.6)

(6,589.6)

Net increase in banking operation deposits

553.0

553.0

Other

(4.3)

(4.3)

Net cash provided by (used in) financing activities

(1,206.2)

(1,087.6)

1,669.8

1,676.7

1,052.7

Net increase (decrease) in cash and cash equivalents

(507.9)

31.6

1,095.7

(112.7)

506.7

Cash and cash equivalents at beginning of period

 

842.8

 

617.4

 

2,001.1

 

(990.5)

 

2,470.8

Cash and cash equivalents at end of period

$

334.9

$

649.0

$

3,096.8

$

(1,103.2)

$

2,977.5

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2017

    

    

    

Principal Life

    

    

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

(443.2)

$

(252.8)

$

4,483.6

$

400.4

$

4,188.0

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

 

(13,371.6)

(13,371.6)

Sales

 

1,413.6

1,413.6

Maturities

 

8,743.2

8,743.2

Mortgage loans acquired or originated

 

(2,755.8)

(2,755.8)

Mortgage loans sold or repaid

 

1,872.0

1,872.0

Real estate acquired

 

(200.5)

(200.5)

Real estate sold

481.9

481.9

Net purchases of property and equipment

 

(0.1)

(164.7)

(164.8)

Dividends and returns of capital received from unconsolidated entities

 

1,002.5

691.2

(1,693.7)

Net change in other investments

 

(1.1)

7.5

(61.6)

(15.6)

(70.8)

Net cash provided by (used in) investing activities

 

1,001.3

698.7

(4,043.5)

(1,709.3)

(4,052.8)

Financing activities

Issuance of common stock

 

162.5

162.5

Acquisition of treasury stock

 

(220.4)

(220.4)

Proceeds from financing element derivatives

 

0.1

0.1

Payments for financing element derivatives

 

(77.6)

(77.6)

Purchase of subsidiary shares from noncontrolling interest

 

(13.3)

(13.3)

Dividends to common stockholders

 

(540.0)

(540.0)

Issuance of long-term debt

 

9.4

2.8

(9.4)

2.8

Principal repayments of long-term debt

 

(38.8)

(56.5)

38.8

(56.5)

Net repayments of short-term

borrowings

 

(92.0)

76.5

(15.5)

Dividends and capital paid to parent

 

(1,002.5)

(691.2)

1,693.7

Investment contract deposits

 

10,154.4

10,154.4

Investment contract withdrawals

 

(9,914.6)

(9,914.6)

Net increase in banking operation deposits

 

136.6

136.6

Other

 

(2.5)

(2.5)

Net cash used in financing activities

 

(597.9)

(1,031.9)

(553.8)

1,799.6

(384.0)

Net decrease in cash and cash equivalents

 

(39.8)

(586.0)

(113.7)

490.7

(248.8)

Cash and cash equivalents at beginning of period

 

882.6

 

1,203.4

 

2,114.8

 

(1,481.2)

 

2,719.6

Cash and cash equivalents at end of period

$

842.8

$

617.4

$

2,001.1

$

(990.5)

$

2,470.8

v3.19.3.a.u2
Schedule I - Summary of Investments - Other Than Investments in Related Parties
12 Months Ended
Dec. 31, 2019
Schedule I - Summary of Investments - Other Than Investments in Related Parties  
Schedule I - Summary of Investments - Other Than Investments in Related Parties

Schedule I - Summary of Investments - Other Than Investments in Related Parties

December 31, 2019

    

    

Amount as

 

shown in the 

 

consolidated

 

statement of

 

Fair

financial

 

Type of Investment

    

Cost

    

value

    

position

 

(in millions)

 

Fixed maturities, available-for-sale:

U.S. Treasury securities and obligations of U.S. government corporations and agencies

$

1,627.0

$

1,724.2

$

1,724.2

States, municipalities and political subdivisions

6,857.1

7,490.0

7,490.0

Foreign governments

852.3

996.2

996.2

Public utilities

4,543.2

4,191.0

4,191.0

Redeemable preferred stock

33.8

34.6

34.6

All other corporate bonds

32,416.1

36,421.8

36,421.8

Residential mortgage-backed securities

2,913.9

2,982.4

2,982.4

Commercial mortgage-backed securities

4,746.6

4,850.2

4,850.2

Collateralized debt obligations

3,226.7

3,215.3

3,215.3

Other debt obligations

8,085.8

8,200.5

8,200.5

Total fixed maturities, available-for-sale

65,302.5

70,106.2

70,106.2

Fixed maturities, trading

675.9

675.9

675.9

Equity securities:

Banks, trust and insurance companies

456.5

456.5

456.5

Public utilities

7.0

7.0

7.0

Industrial, miscellaneous and all other

785.6

785.6

785.6

Other corporate

480.7

480.7

480.7

Non-redeemable preferred stock

149.6

149.6

149.6

Total equity securities

1,879.4

1,879.4

1,879.4

Mortgage loans

16,486.9

 

XXXX

16,486.9

Real estate, net:

Real estate acquired in satisfaction of debt

4.1

 

XXXX

4.1

Other real estate

1,710.7

 

XXXX

1,710.7

Policy loans

798.0

 

XXXX

798.0

Other investments

4,690.2

 

XXXX

4,690.2

Total investments

$

91,547.7

 

XXXX

$

96,351.4

v3.19.3.a.u2
Schedule II - Condensed Financial Information of Registrant (Parent Only)
12 Months Ended
Dec. 31, 2019
Schedule II - Condensed Financial Information of Registrant (Parent Only)  
Schedule II - Condensed Financial Information of Registrant (Parent Only)

Schedule II - Condensed Financial Information of Registrant (Parent Only)

Statements of Financial Position

December 31, 

 

    

2019

    

2018

   

(in millions)

 

Assets

Fixed maturities, available-for-sale

$

265.8

$

211.5

Fixed maturities, trading

268.2

308.9

Other investments

10.4

10.7

Cash and cash equivalents

394.9

334.9

Income taxes receivable

11.1

 

16.9

Deferred income taxes

344.4

 

331.0

Amounts receivable from subsidiaries

3.8

 

5.2

Other assets

25.5

 

23.3

Investment in unconsolidated entities

17,539.6

 

13,862.4

Total assets

$

18,863.7

$

15,104.8

Liabilities

Long-term debt

$

3,625.5

$

3,129.8

Accrued investment payable

25.4

 

23.1

Pension liability

590.6

557.9

Other liabilities

4.2

4.0

Total liabilities

4,245.7

 

3,714.8

Stockholders' equity

Common stock, par value $.01 per share - 2,500 million shares authorized, 479.3 million and 476.7 million shares issued, and 276.6 million and 279.5 million shares outstanding in 2019 and 2018

4.8

 

4.8

Additional paid-in capital

10,182.6

 

10,060.7

Retained earnings

11,074.3

 

10,290.2

Accumulated other comprehensive income (loss)

1,037.9

 

(1,565.1)

Treasury stock, at cost (202.7 million and 197.2 million shares in 2019 and 2018)

(7,681.6)

 

(7,400.6)

Total stockholders' equity attributable to Principal Financial Group, Inc.

14,618.0

 

11,390.0

Total liabilities and stockholders' equity

$

18,863.7

$

15,104.8

See accompanying notes.

Statements of Operations

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Revenues

Fees and other revenues

$

$

$

7.8

Net investment income

19.4

25.8

9.7

Net realized capital gains (losses)

12.3

(8.2)

(0.6)

Total revenues

31.7

17.6

16.9

Expenses

Other operating costs and expenses

210.9

191.9

238.1

Total expenses

210.9

191.9

238.1

Loss before income taxes

(179.2)

(174.3)

(221.2)

Income taxes (benefits)

(44.2)

(62.5)

63.1

Equity in the net income of subsidiaries

1,529.2

1,658.3

2,594.7

Net income attributable to Principal Financial Group, Inc.

$

1,394.2

$

1,546.5

$

2,310.4

See accompanying notes.

Statements of Cash Flows

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Operating activities

Net income

$

1,394.2

$

1,546.5

$

2,310.4

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Net realized capital (gains) losses

(12.3)

8.2

0.6

Stock-based compensation

1.3

2.9

3.0

Equity in the net income of subsidiaries

(1,529.2)

(1,658.3)

(2,594.7)

Changes in:

Net cash flows for trading securities and equity securities with operating intent

48.7

32.4

(352.6)

Current and deferred income taxes (benefits)

(31.0)

15.7

163.8

Other

135.4

(79.8)

26.3

Net cash provided by (used in) operating activities

7.1

(132.4)

(443.2)

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

(251.5)

(210.9)

Maturities

200.0

2.3

Net purchases of property and equipment

(0.1)

(0.1)

(0.1)

Net change in other investments

(34.0)

(2.2)

(1.1)

Dividends and returns of capital received from unconsolidated entities

494.2

1,041.6

1,002.5

Net cash provided by investing activities

408.6

830.7

1,001.3

Financing activities

Issuance of common stock

37.7

64.0

162.5

Acquisition of treasury stock

(281.0)

(671.6)

(220.4)

Dividends to common stockholders

(606.0)

(598.6)

(540.0)

Issuance of long-term debt

493.6

Net cash used in financing activities

(355.7)

(1,206.2)

(597.9)

Net increase (decrease) in cash and cash equivalents

60.0

(507.9)

(39.8)

Cash and cash equivalents at beginning of year

334.9

842.8

882.6

Cash and cash equivalents at end of year

$

394.9

$

334.9

$

842.8

See accompanying notes.

(1)   Basis of Presentation

The accompanying condensed financial information should be read in conjunction with the consolidated financial statements and notes thereto of Principal Financial Group, Inc.

In the parent company only financial statements, our investment in unconsolidated entities is stated at cost plus equity in undistributed earnings of subsidiaries.

Principal Financial Group, Inc. sponsors nonqualified benefit plans for select employees and agents and is responsible for the obligations of these plans. Nonqualified plan assets are held in Rabbi trusts for the benefit of all nonqualified plan participants. The invested assets and benefit plan liabilities reported in the statements of financial position exclude amounts held in these trusts. The Rabbi trusts had $731.9 million and $671.7 million of plan assets and $593.7 million and $542.4 million of benefit plan liabilities as of December 31, 2019 and 2018, respectively.

(2)   Dividends and Returns of Capital Received from (Contributions to) Unconsolidated Entities

The parent company received cash dividends and returns of capital totaling $494.2 million, $1,041.6 million and $1,002.5 million from subsidiaries in 2019, 2018 and 2017, respectively.

v3.19.3.a.u2
Schedule III - Supplementary Insurance Information
12 Months Ended
Dec. 31, 2019
Schedule III - Supplementary Insurance Information  
Schedule III - Supplementary Insurance Information

Schedule III - Supplementary Insurance Information

As of December 31, 2019 and 2018 and for each of the years ended December 31, 2019, 2018 and 2017

    

    

Contractholder

 

Deferred

Future policy

and other

 

acquisition

benefits and

policyholder

 

Segment

    

costs

    

claims

    

funds

 

(in millions)

 

2019:

Retirement and Income Solutions

$

833.9

$

25,305.1

$

33,814.4

Principal Global Investors

Principal International

11.3

4,537.1

1,145.0

U.S. Insurance Solutions

2,676.1

10,823.5

7,720.0

Corporate

172.5

(352.5)

Total

$

3,521.3

$

40,838.2

$

42,326.9

2018:

Retirement and Income Solutions

$

988.3

$

21,217.9

$

32,295.1

Principal Global Investors

Principal International

13.1

4,317.6

1,183.1

U.S. Insurance Solutions

2,692.1

9,950.3

7,458.4

Corporate

179.0

(348.5)

Total

$

3,693.5

$

35,664.8

$

40,588.1

Schedule III - Supplementary Insurance Information - (continued)

As of December 31, 2019 and 2018 and for each of the years ended December 31, 2019, 2018 and 2017

Amortization of

 

Premiums and

Net

Benefits, claims

deferred

Other 

 

other 

investment

and settlement

acquisition

operating

 

Segment

    

considerations

    

income (1)

    

expenses

    

costs

    

expenses (1)

 

(in millions)

 

2019:

Retirement and Income Solutions

$

4,862.7

$

2,420.4

$

6,527.8

$

87.8

$

1,403.5

Principal Global Investors

10.1

1,028.5

Principal International

393.3

575.9

728.3

1.3

436.0

U.S. Insurance Solutions

2,610.6

854.5

2,639.2

257.9

946.5

Corporate

137.5

10.5

342.4

Total

$

7,866.6

$

3,998.4

$

9,905.8

$

347.0

$

4,156.9

2018:

Retirement and Income Solutions

$

3,635.9

$

2,195.2

$

5,099.0

$

124.5

$

1,140.7

Principal Global Investors

4.2

1,168.0

Principal International

317.2

494.9

646.6

1.3

451.0

U.S. Insurance Solutions

2,456.5

815.1

2,444.6

127.7

925.4

Corporate

119.8

2.3

198.1

Total

$

6,409.6

$

3,629.2

$

8,192.5

$

253.5

$

3,883.2

2017:

Retirement and Income Solutions

$

3,671.1

$

2,058.3

$

4,972.6

$

35.8

$

1,108.5

Principal Global Investors

 

13.4

963.1

Principal International

 

218.0

510.6

507.1

22.4

388.1

U.S. Insurance Solutions

 

2,328.3

785.9

2,345.3

176.4

850.5

Corporate

 

91.1

(2.4)

349.0

Total

$

6,217.4

$

3,459.3

$

7,822.6

$

234.6

$

3,659.2

(1)Allocations of net investment income and certain operating expenses are based on a number of assumptions and estimates. Reported operating results would change by segment if different methods were applied.

Effective January 1, 2019, we made changes to the allocation of certain compensation and other expenses and net investment income among the reportable segments. These allocation changes were made as a result of a global financial process improvement project. The expense allocation changes simplify the allocation processes, increase transparency and allow for more effective expense management across the enterprise. The net investment income allocation changes better align our internal capital allocation with enterprise capital targets. Segment results for prior periods were recast so they are reported on a comparable basis, with no impact to total company financial results.

v3.19.3.a.u2
Schedule IV - Reinsurance
12 Months Ended
Dec. 31, 2019
Schedule IV - Reinsurance  
Schedule IV - Reinsurance

Schedule IV - Reinsurance

As of December 31, 2019, 2018 and 2017 and for each of the years then ended

Percentage

 

Ceded to

Assumed

of amount

 

Gross

other

from other

assumed

 

    

amount

    

companies

    

companies

    

Net amount

    

to net

 

($ in millions)

 

2019:

Life insurance in force

$

577,735.3

$

368,583.0

$

999.5

$

210,151.8

0.5

%

Premiums:

Life insurance and annuities

$

6,424.8

$

407.5

$

1.6

$

6,018.9

%

Accident and health insurance

2,003.3

155.6

1,847.7

%

Total

$

8,428.1

$

563.1

$

1.6

$

7,866.6

%

2018:

Life insurance in force

$

530,828.6

$

324,691.3

$

1,028.6

$

207,165.9

0.5

%

Premiums:

Life insurance and annuities

$

5,055.8

$

359.9

$

1.7

$

4,697.6

%

Accident and health insurance

1,872.5

160.5

1,712.0

%

Total

$

6,928.3

$

520.4

$

1.7

$

6,409.6

%

2017:

Life insurance in force

$

486,887.5

$

287,538.8

$

1,059.5

$

200,408.2

0.5

%

Premiums:

Life insurance and annuities

$

4,945.7

$

320.7

$

1.9

$

4,626.9

%

Accident and health insurance

 

1,753.6

163.1

1,590.5

%

Total

$

6,699.3

$

483.8

$

1.9

$

6,217.4

%

v3.19.3.a.u2
Nature of Operations and Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2019
Nature of Operations and Significant Accounting Policies  
Basis of Presentation - Policy

Basis of Presentation

The accompanying consolidated financial statements include the accounts of PFG and all other entities in which we directly or indirectly have a controlling financial interest as well as those variable interest entities (“VIEs”) in which we are the primary beneficiary. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). All significant intercompany accounts and transactions have been eliminated.

Consolidation - Policy

Consolidation

We have relationships with various special purpose entities and other legal entities that must be evaluated to determine if the entities meet the criteria of a VIE or a voting interest entity (“VOE”). This assessment is performed by reviewing contractual, ownership and other rights, including involvement of related parties, and requires use of judgment. First, we determine if we hold a variable interest in an entity by assessing if we have the right to receive expected losses and expected residual returns of the entity. If we hold a variable interest, then the entity is assessed to determine if it is a VIE. An entity is a VIE if the equity at risk is not sufficient to support its activities, if the equity holders lack a controlling financial interest or if the entity is structured with non-substantive voting rights. In addition to the previous criteria, if the entity is a limited partnership or similar entity, it is a VIE if the limited partners do not have the power to direct the entity’s most significant activities through substantive kick-out rights or participating rights. A VIE is evaluated to determine the primary beneficiary. The primary beneficiary of a VIE is the enterprise with (1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. We reassess our involvement with VIEs on a quarterly basis. For further information about VIEs, refer to Note 3, Variable Interest Entities.

If an entity is not a VIE, it is considered a VOE. VOEs are generally consolidated if we own a greater than 50% voting interest. If we determine our involvement in an entity no longer meets the requirements for consolidation under either the VIE or VOE models, the entity is deconsolidated. Entities in which we have management influence over the operating and financing decisions but are not required to consolidate, other than investments accounted for at fair value under the fair value option, are reported using the equity method.

Recent Accounting Pronouncements - Policy

Recent Accounting Pronouncements

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Standards not yet adopted:

Targeted improvements to the accounting for long-duration insurance contracts

This authoritative guidance updates certain requirements in the accounting for long-duration insurance and annuity contracts.

1.

The assumptions used to calculate the liability for future policy benefits on traditional and limited-payment contracts will be reviewed and updated periodically. Cash flow assumptions will be reviewed at least annually and updated when necessary with the impact recognized in net income. Discount rate assumptions are prescribed as the current upper-medium grade (low credit risk) fixed income instrument yield and will be updated quarterly with the impact recognized in other comprehensive income (“OCI”).

2.

Market risk benefits, which are certain market-based options or guarantees associated with deposit or account balance contracts, will be measured at fair value. The periodic change in fair value related to instrument-specific credit risk will be recognized in OCI while the remaining change in fair value will be recognized in net income.

3.

Deferred acquisition costs (“DAC”) for all insurance and annuity contracts will be amortized on a constant basis over the expected term of the related contracts.

4.

Additional disclosures are required, including disaggregated rollforwards of significant insurance liabilities and other account balances and disclosures about significant inputs, judgments, assumptions and methods used in measurement.

The guidance for the liability for future policy benefits for traditional and limited-payment contracts and DAC will be applied on a modified retrospective basis; that is, to contracts in force as of the beginning of the earliest period presented based on their existing carrying amounts. An entity may elect to apply the changes retrospectively. The guidance for market risk benefits will be applied retrospectively. Early adoption is permitted.

January 1, 2022

Our implementation and evaluation process to date includes, but is not limited to the following:

       identifying and documenting contracts and contract features in scope of the guidance;

       identifying the actuarial models, systems and processes to be updated;

       evaluating and selecting our systems solutions for implementing the new guidance;

       beginning to build key models;

       evaluating our key accounting policies;

       assessing the impact to our chart of accounts;

       developing format and content of new disclosures and

       evaluating transition requirements and impacts.

As we progress through our implementation, we will be able to better assess the impact to our consolidated financial statements; however, we expect this guidance to significantly change how we account for many of our insurance and annuity products.

Goodwill impairment testing

This authoritative guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 (which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill to the carrying amount of that goodwill) from the goodwill impairment test. A goodwill impairment loss will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. Early adoption is permitted.

January 1, 2020

We expect the guidance will reduce complexity and costs associated with performing a Step 2 test, should one be needed in the future. However, the impact of eliminating the Step 2 test from any such future impairment assessment will be dependent on modeling factors that are not currently determinable. We do not expect this guidance to have a material impact on our consolidated financial statements.

1. Nature of Operations and Significant Accounting Policies (continued)

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Credit losses

This authoritative guidance requires entities to use a current expected credit loss (“CECL”) model to measure impairment for most financial assets that are not recorded at fair value through net income. Under the CECL model, an entity will estimate lifetime expected credit losses considering available relevant information about historical events, current conditions and reasonable and supportable forecasts. The CECL model does not apply to available-for-sale debt securities. This guidance also expands the required credit loss disclosures and will be applied using a modified retrospective approach by recording a cumulative effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Early adoption is permitted.

January 1, 2020

The guidance will be adopted using the modified retrospective approach. Our evaluation process is complete and included, but was not limited to, identifying financial assets within scope of the guidance, developing and refining CECL models for the relevant assets, preparing quarterly estimates of the cumulative effect of adoption, developing and refining necessary internal controls and preparing the required financial statement disclosures. The financial statement changes are not material and will result in an immaterial reduction to stockholders’ equity.

Standards adopted:

Implementation costs in a cloud computing arrangement that is a service contract

This authoritative guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance can be applied either retrospectively or prospectively and early adoption is permitted.

January 1, 2019

The effective date of the guidance is January 1, 2020; however, we elected to early-adopt this guidance on a prospective basis, effective January 1, 2019. This guidance did not have a material impact on our consolidated financial statements.

Nonemployee share-based payment accounting

This authoritative guidance simplifies the accounting for share-based payments to nonemployees by generally aligning it with the accounting for share-based payments to employees. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date, where previously the measurement was fixed at performance completion date. The guidance will be applied to equity-classified nonemployee awards for which a measurement date has not been established as of the date of adoption.

January 1, 2019

This guidance did not have a material impact on our consolidated financial statements.

1. Nature of Operations and Significant Accounting Policies (continued)

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Leases

This authoritative guidance requires lessee recognition of lease assets and lease liabilities on the balance sheet. The concept of an operating lease, where the lease assets and liabilities are off balance sheet, is eliminated under the new guidance. For lessors, the guidance modifies lease classification criteria and accounting for certain types of leases. Other key aspects of the guidance relate to the removal of the current real estate-specific guidance and new presentation and disclosure requirements. Lessees and lessors are required to recognize and measure leases using a modified retrospective approach, which includes certain optional practical expedients that may be elected. We elected the alternative transition method, which allows entities to initially apply the new standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption.

January 1, 2019

We adopted the guidance using the modified retrospective approach and comparative periods were not restated. Further details are included under the caption “Adoption of Lease Guidance” and in Note 12, Contingencies, Guarantees, Indemnifications and Leases.

Targeted improvements to accounting for hedging activities

This authoritative guidance updated certain recognition and measurement requirements for hedge accounting. The objective of the guidance is to more closely align the economics of a company’s risk management activities in its financial results and reduce the complexity of applying hedge accounting. The updates included the expansion of hedging strategies that are eligible for hedge accounting, elimination of the separate measurement and reporting of hedge ineffectiveness, presentation of the changes in the fair value of the hedging instrument in the same consolidated statement of operations line as the earnings effect of the hedged item and simplification of hedge effectiveness assessments. This guidance also included new disclosures.

January 1, 2019

This guidance did not have a material impact on our consolidated financial statements. See Note 5, Derivative Financial Instruments, for further details.

Premium amortization on purchased callable debt securities

This authoritative guidance applies to entities that hold certain non-contingently callable debt securities, where the amortized cost basis is at a premium to the price repayable by the issuer at the earliest call date. Under the guidance the premium will be amortized to the first call date.

January 1, 2019

This guidance did not have a material impact on our consolidated financial statements.

1. Nature of Operations and Significant Accounting Policies (continued)

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Reclassification of certain tax effects from accumulated other comprehensive income

This authoritative guidance permits a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for the stranded tax effects resulting from U.S. tax legislation enacted on December 22, 2017, which is referred to as the ‘‘Tax Cuts and Jobs Act’’ (‘‘U.S. tax reform’’). The amount of that reclassification includes the change in corporate income tax rate, as well as an election to include other income tax effects related to the application of U.S. tax reform. The guidance also requires disclosures about stranded tax effects.

January 1, 2018

The effective date of the guidance was January 1, 2019; however, we elected to early adopt the guidance. The guidance was applied at the beginning of the period of adoption and comparative periods were not restated. We reclassified the stranded tax effects in AOCI resulting from U.S. tax reform, which includes the change in corporate income tax rate and an election to reclassify the tax effects of the one-time deemed repatriation tax. A reclassification of $77.6 million was recorded as an increase to AOCI and a decrease to retained earnings.

Revenue recognition

This authoritative guidance replaces all general and most industry specific revenue recognition guidance currently prescribed by U.S. GAAP. The core principle is that an entity recognizes revenue to reflect the transfer of a promised good or service to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for that good or service. This guidance also provides clarification on when an entity is a principal or an agent in a transaction. In addition, the guidance updates the accounting for certain costs associated with obtaining and fulfilling a customer contract. The guidance may be applied using one of the following two methods: (1) retrospectively to each prior reporting period presented, or (2) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application.

January 1, 2018

We adopted the guidance using the modified retrospective approach. The guidance did not have a material impact on our consolidated financial statements. A cumulative effect adjustment of $39.7 million was recorded as a decrease to total stockholders' equity. See Note 17, Revenues from Contracts with Customers, for further details.

Income tax - intra-entity transfers of assets

This authoritative guidance requires entities to recognize current and deferred income tax resulting from an intra-entity asset transfer when the transfer occurs. Prior to issuance of this guidance, U.S. GAAP did not allow recognition of income tax consequences until the asset had been sold to a third party. This guidance requires adoption through a cumulative effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption.

January 1, 2018

We adopted the guidance using the modified retrospective approach. A cumulative effect adjustment of $8.7 million was recorded as an increase to retained earnings. In addition, other assets and deferred income taxes decreased $21.1 million and $29.8 million, respectively, due to the adoption of this guidance.

1. Nature of Operations and Significant Accounting Policies (continued)

Description

Date of
adoption

Effect on our consolidated
financial statements or other
significant matters

Financial instruments - recognition and measurement
This authoritative guidance addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The guidance eliminated the classification of equity securities into different categories (trading or available-for-sale) and requires equity investments to be measured at fair value with changes in the fair value recognized through net income. The guidance also updated certain financial instrument disclosures and eliminated the requirement to disclose the methods and significant assumptions used to estimate the fair value of financial instruments that are measured at amortized cost on the balance sheet.

January 1, 2018

We adopted this guidance using the modified retrospective approach. A cumulative effect adjustment of $1.0 million was recorded as a decrease to AOCI and a corresponding increase to retained earnings. The guidance did not have a material impact on our consolidated financial statements. See Note 4, Investments, for further details.

Nonfinancial asset derecognition and partial sales of nonfinancial assets

This authoritative guidance clarifies the scope of the recently established guidance on nonfinancial asset derecognition and the accounting for partial sales of nonfinancial assets. The guidance conforms the derecognition guidance on nonfinancial assets with the model for transactions in the new revenue recognition standard.

January 1, 2018

The guidance did not have a material impact on our consolidated financial statements.

Presentation of net periodic pension cost and net periodic postretirement benefit cost

This authoritative guidance requires that an employer disaggregate the service cost component from the other components of net benefit cost. The guidance also provides explicit guidance on the presentation of the service cost component and the other components of net benefit cost in the consolidated statement of operations and allows only the service cost component of net benefit cost to be eligible for capitalization.

January 1, 2018

The guidance did not have a material impact on our consolidated financial statements.

Definition of a business

This authoritative guidance clarifies the definition of a business to assist with evaluating when transactions involving an integrated set of assets and activities (a “set”) should be accounted for as acquisitions or disposals of assets or businesses. The guidance requires that when substantially all of the fair value of the gross assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance also requires a set to include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output to be considered a business. Lastly, the guidance removes the evaluation of whether a market participant could replace missing elements and narrows the definition of outputs by more closely aligning it with how outputs are described in the revenue recognition guidance. The guidance will be applied prospectively.

January 1, 2018

The guidance did not have a material impact on our consolidated financial statements.

Employee share-based payment accounting

This authoritative guidance changes certain aspects of accounting for and reporting share-based payments to employees including changes related to the income tax effects of share-based payments, tax withholding requirements and accounting for forfeitures. Various transition methods will apply depending on the situation being addressed.

January 1, 2017

The guidance was adopted prospectively as indicated by the guidance for each area of change and did not have a material impact on our consolidated financial statements.

1. Nature of Operations and Significant Accounting Policies (continued)

When we adopt new accounting standards, we have a process in place to perform a thorough review of the pronouncement, identify the financial statement and system impacts and create an implementation plan among our impacted business units to ensure we are compliant with the pronouncement on the date of adoption. This includes having effective processes and controls in place to support the reported amounts. Each of the standards listed above is in varying stages in our implementation process based on its issuance and adoption dates. We are on track to implement guidance by the respective effective dates.

Adoption of Lease Guidance

On January 1, 2019, we adopted the guidance using the modified retrospective approach with the cumulative effect of initially applying the standard recognized at the date of adoption. We elected the package of practical expedients permitted under the transition guidance. In addition, we elected the hindsight practical expedient to determine the lease term for existing leases. We have agreements with lease and non-lease components, which we account for as a combined unit of account for all classes.

The impact of the guidance to our consolidated financial statements primarily related to the establishment of additional assets and liabilities of  $168.8 million and $164.0 million, respectively. The difference between the additional assets and liabilities, net of deferred tax impacts, was recorded as a cumulative effect adjustment to retained earnings and increased total stockholders’ equity by $4.0 million.

Results of reporting periods beginning January 1, 2019, are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with our prior accounting. The guidance did not have a material impact on our consolidated statements of operations and did not impact earnings per common share.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

The preparation of our consolidated financial statements and accompanying notes requires management to make estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in the consolidated financial statements and accompanying notes. The most critical estimates include those used in determining:

the fair value of investments in the absence of quoted market values;
investment impairments and valuation allowances;
the fair value of and accounting for derivatives;
the DAC and other actuarial balances where the amortization is based on estimated gross profits (“EGPs”);
the measurement of goodwill, indefinite lived intangible assets, finite lived intangible assets and related impairments or amortization, if any;
the liability for future policy benefits and claims;
the value of our pension and other postretirement benefit obligations and
accounting for income taxes and the valuation of deferred tax assets.

A description of such critical estimates is incorporated within the discussion of the related accounting policies that follow. In applying these policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Actual results could differ from these estimates.

Closed Block

Closed Block

Principal Life Insurance Company (“Principal Life”) operates a closed block (“Closed Block”) for the benefit of individual participating dividend-paying policies in force at the time of the 1998 mutual insurance holding company (“MIHC”) formation. See Note 6, Closed Block, for further details.

Cash and Cash Equivalents - Policy

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market instruments and other debt issues with a maturity date of three months or less when purchased.

Investments - Policy

Investments

Fixed maturities include bonds, asset-backed securities (“ABS”), redeemable preferred stock and certain non-redeemable preferred securities. Equity securities include mutual funds, common stock, non-redeemable preferred stock and required regulatory investments. We classify fixed maturities as either available-for-sale or trading at the time of the purchase and, accordingly, carry them at fair value. Equity securities are also carried at fair value. See Note 14, Fair Value Measurements, for methodologies related to the determination of fair value. Unrealized gains and losses related to fixed maturities, available-for-sale, excluding those in fair value hedging relationships, are reflected in stockholders' equity, net of adjustments associated with DAC and related actuarial balances, derivatives in cash flow hedge relationships and applicable income taxes. Mark-to-market adjustments on equity securities, unrealized gains and losses related to hedged portions of fixed maturities, available-for-sale in fair value hedging relationships prior to 2019 and mark-to-market adjustments on certain fixed maturities, trading are reflected in net realized capital gains (losses). Beginning in 2019, unrealized gains and losses related to hedged portions of fixed maturities, available-for-sale in fair value hedging relationships are reflected in net investment income. Mark-to-market adjustments related to certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reflected in net investment income.

The amortized cost of fixed maturities includes cost adjusted for amortization of premiums and discounts, computed using the interest method. The amortized cost of fixed maturities classified as available-for-sale is adjusted for changes in fair value of hedged portions of securities in fair value hedging relationships and declines in value that are other than temporary. Impairments in value deemed to be other than temporary are primarily reported in net income as a component of net realized capital gains (losses), with noncredit impairment losses for certain fixed maturities, available-for-sale reported in OCI. Interest income, as well as prepayment fees and the amortization of the related premium or discount, is reported in net investment income. For loan-backed and structured securities, we recognize income using a constant effective yield based on currently anticipated cash flows.

Real estate investments are reported at cost less accumulated depreciation. The initial cost bases of properties acquired through loan foreclosures are the lower of the fair market values of the properties at the time of foreclosure or the outstanding loan balance. Buildings and land improvements are generally depreciated on the straight-line method over the estimated useful life of improvements and tenant improvement costs are depreciated on the straight-line method over the term of the related lease. We recognize impairment losses for properties when indicators of impairment are present and a property's expected undiscounted cash flows are not sufficient to recover the property's carrying value. In such cases, the cost basis of the property is reduced to fair value. Real estate expected to be disposed is carried at the lower of cost or fair value, less cost to sell, with valuation allowances established accordingly and depreciation no longer recognized. The carrying amount of real estate held for sale was $169.8 million and $209.6 million as of December 31, 2019 and 2018, respectively. Any impairment losses and any changes in valuation allowances are reported in net income.

Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Interest income, as well as prepayment of fees and the amortization of the related premium or discount, is reported in net investment income. Any changes in the valuation allowances are reported in net realized capital gains (losses). We measure impairment based upon the difference between carrying value and estimated value less cost to sell.

1. Nature of Operations and Significant Accounting Policies (continued)

Estimated value is based on either the present value of expected cash flows discounted at the loan's effective interest rate, the loan's observable market price or the fair value of the collateral. If foreclosure is probable, the measurement of any valuation allowance is based upon the fair value of the collateral.

Net realized capital gains and losses on sales of investments are determined on the basis of specific identification. In general, in addition to realized capital gains and losses on investment sales and periodic settlements on derivatives not designated as hedges, we report gains and losses related to the following in net realized capital gains (losses): other-than-temporary impairments of securities and subsequent realized recoveries, mark-to-market adjustments on equity securities, mark-to-market adjustments on certain fixed maturities, trading, mark-to-market adjustments on sponsored investment funds, mark-to-market adjustments on derivatives not designated as hedges, cash flow hedge gains (losses) when the hedged item impacts realized capital gains (losses), changes in the mortgage loan valuation allowance provision, impairments of real estate held for investment and impairments of equity method investments. Investment gains and losses on sales of certain real estate held for sale due to investment strategy and mark-to-market adjustments on certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reported as net investment income and are excluded from net realized capital gains (losses).

Policy loans and certain other investments are reported at cost. Interests in unconsolidated entities, joint ventures and partnerships are generally accounted for using the equity method. We have other investments reported at fair value or for which the fair value option has been elected in prior periods. See Note 14, Fair Value Measurements, for detail on these investments.

Derivatives - Policy

Derivatives

Overview

Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices or the values of securities. Derivatives generally used by us include swaps, options, futures and forwards. Derivative positions are either assets or liabilities in the consolidated statements of financial position and are measured at fair value, generally by obtaining quoted market prices or through the use of pricing models. See Note 14, Fair Value Measurements, for policies related to the determination of fair value. Fair values can be affected by changes in interest rates, foreign exchange rates, financial indices, values of securities, credit spreads, and market volatility and liquidity.

Accounting and Financial Statement Presentation

We designate derivatives as either:

(a)a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, including those denominated in a foreign currency (“fair value hedge”);
(b)a hedge of a forecasted transaction or the exposure to variability of cash flows to be received or paid related to a recognized asset or liability, including those denominated in a foreign currency (“cash flow hedge”);
(c)a hedge of a net investment in a foreign operation or
(d)a derivative not designated as a hedging instrument.

Our accounting for the ongoing changes in fair value of a derivative depends on the intended use of the derivative and the designation, as described above, and is determined when the derivative contract is entered into or at the time of redesignation. Hedge accounting is used for derivatives that are specifically designated in advance as hedges and that reduce our exposure to an indicated risk by having a high correlation between changes in the value of the derivatives and the items being hedged at both the inception of the hedge and throughout the hedge period.

Fair Value Hedges. When a derivative is designated as a fair value hedge and is determined to be highly effective, changes in its fair value, along with changes in the fair value of the hedged asset, liability or firm commitment attributable to the hedged risk, are reported in the same income statement line item that is used to report the earnings effect of the hedged item.

1. Nature of Operations and Significant Accounting Policies (continued)

For fair value hedges of fixed maturities, available-for-sale, these changes in fair value are reported in net investment income. Prior to 2019, these changes in fair value were recorded in net realized capital gains (losses). A fair value hedge determined to be highly effective may still result in a mismatch between the change in the fair value of the hedging instrument and the change in the fair value of the hedged item attributable to the hedged risk.

Cash Flow Hedges. When a derivative is designated as a cash flow hedge and is determined to be highly effective, changes in its fair value are recorded as a component of OCI. At the time the variability of cash flows being hedged impacts net income, the related portion of deferred gains or losses on the derivative instrument is reclassified and reported in net income.

Net Investment in a Foreign Operation Hedge. When a derivative is used as a hedge of a net investment in a foreign operation, its change in fair value, to the extent effective as a hedge, is recorded as a component of OCI. If the foreign operation is sold or upon complete or substantially complete liquidation, the deferred gains or losses on the derivative instrument are reclassified into net income.

Non-Hedge Derivatives. If a derivative does not qualify or is not designated for hedge accounting, all changes in fair value are reported in net income without considering the changes in the fair value of the economically associated assets or liabilities.

Hedge Documentation and Effectiveness Testing. At inception, we formally document all relationships between hedging instruments and hedged items, as well as our risk management objective and strategy for undertaking various hedge transactions. This process includes associating all derivatives designated as fair value or cash flow hedges with specific assets or liabilities on the consolidated statements of financial position or with specific firm commitments or forecasted transactions. Effectiveness of the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a hedge is determined to be highly effective, the hedge may still result in a mismatch between the change in the fair value of the hedging instrument and the change in the fair value of the hedged item attributable to the hedged risk.

We use qualitative and quantitative methods to assess hedge effectiveness. Qualitative methods may include monitoring changes to terms and conditions and counterparty credit ratings. Quantitative methods may include statistical tests including regression analysis and minimum variance and dollar offset techniques.

Termination of Hedge Accounting. We prospectively discontinue hedge accounting when (1) the criteria to qualify for hedge accounting is no longer met, e.g., a derivative is determined to no longer be highly effective in offsetting the change in fair value or cash flows of a hedged item; (2) the derivative expires, is sold, terminated or exercised or (3) we remove the designation of the derivative being the hedging instrument for a fair value or cash flow hedge.

If it is determined that a derivative no longer qualifies as an effective hedge, the derivative will continue to be carried on the consolidated statements of financial position at its fair value, with changes in fair value recognized prospectively in net realized capital gains (losses). The asset or liability under a fair value hedge will no longer be adjusted for changes in fair value pursuant to hedging rules and the existing basis adjustment is amortized to the consolidated statements of operations line associated with the asset or liability. The component of AOCI related to discontinued cash flow hedges that are no longer highly effective is amortized to the consolidated statements of operations consistent with the net income impacts of the original hedged cash flows. If a cash flow hedge is discontinued because it is probable the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income.

Embedded Derivatives. We purchase and issue certain financial instruments and products that contain a derivative that is embedded in the financial instrument or product. We assess whether this embedded derivative is clearly and closely related to the asset or liability that serves as its host contract. If we deem that the embedded derivative's terms are not clearly and closely related to the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the derivative is bifurcated from that contract and held at fair value on the consolidated statements of financial position, with changes in fair value reported in net income.

Contractholder and Policyholder Liabilities - Policy

Contractholder and Policyholder Liabilities

Contractholder and policyholder liabilities (contractholder funds, future policy benefits and claims and other policyholder funds) include reserves for investment contracts, individual and group annuities that provide periodic income payments, universal life insurance, variable universal life insurance, indexed universal life insurance, term life insurance, participating traditional individual life insurance, group dental and vision insurance, group critical illness, group accident, group short-term and long-term disability insurance, group life insurance, individual disability insurance and long-term care insurance. It also includes a provision for dividends on participating policies.

Investment contracts are contractholders' funds on deposit with us and generally include reserves for pension and annuity contracts. Reserves on investment contracts are equal to the cumulative deposits less any applicable charges and withdrawals plus credited interest. Reserves for universal life, variable universal life and indexed universal life insurance contracts are equal to cumulative deposits less charges plus credited interest, which represents the account balances that accrue to the benefit of the policyholders.

We hold additional reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses in later years; universal life, variable universal life and indexed universal life insurance contracts that contain no lapse guarantee features; and annuities with guaranteed minimum death benefits.

Reserves for individual and group annuities that provide periodic income payments, nonparticipating term life insurance and disability income contracts are computed on a basis of assumed investment yield, mortality, morbidity and expenses, including a provision for adverse deviation, which generally varies by plan, year of issue and policy duration. Investment yield is based on our experience. Mortality, morbidity and withdrawal rate assumptions are based on our experience and are periodically reviewed against both industry standards and experience.

Reserves for participating life insurance contracts are based on the net level premium reserve for death and endowment policy benefits. This net level premium reserve is calculated based on dividend fund interest rates and mortality rates guaranteed in calculating the cash surrender values described in the contract.

Participating business represented approximately 6%, 7% and 7% of our life insurance in force and 23%, 26% and 29% of the number of life insurance policies in force as of December 31, 2019, 2018 and 2017, respectively. Participating business represented approximately 21%, 24% and 30% of life insurance premiums for the years ended December 31, 2019, 2018 and 2017, respectively. The amount of dividends to policyholders is declared annually by Principal Life's Board of Directors. The amount of dividends to be paid to policyholders is determined after consideration of several factors including interest, mortality, morbidity and other expense experience for the year and judgment as to the appropriate level of statutory surplus to be retained by Principal Life. At the end of the reporting period, Principal Life establishes a dividend liability for the pro rata portion of the dividends expected to be paid on or before the next policy anniversary date.

Some of our policies and contracts require payment of fees or other policyholder assessments in advance for services that will be rendered over the estimated lives of the policies and contracts. These payments are established as unearned revenue liabilities upon receipt and included in other policyholder funds in the consolidated statements of financial position. These unearned revenue reserves are amortized to net income over the estimated lives of these policies and contracts in relation to the emergence of EGPs.

Short-Duration Contracts

We include the following group products in our short-duration insurance contracts disclosures: long-term disability (“LTD”), group life waiver, dental, vision, short-term disability (“STD”), critical illness, accident and group life.

Future policy benefits and claims include reserves for group life and disability insurance that provide periodic income payments. These reserves are computed using assumptions of mortality, morbidity and investment performance. These assumptions are based on our experience, industry results, emerging trends and future expectations. Future policy benefits and claims also include reserves for incurred but unreported group disability, dental, vision, critical illness, accident and life insurance claims.

1. Nature of Operations and Significant Accounting Policies (continued)

We recognize claims costs in the period the service was provided to our policyholders. However, claims costs incurred in a particular period are not known with certainty until after we receive, process and pay the claims. We determine the amount of this liability using actuarial methods based on historical claim payment patterns as well as emerging cost trends, where applicable, to determine our estimate of claim liabilities.

We have defined claim frequency as follows for each short-duration product:  

LTD: Claim frequency is based on submitted reserve claim counts.
Group Life Waiver: Claim frequency is based on submitted reserve claim counts, consistent with LTD.
Dental and Vision: Claim frequency is based on the claim form, which may include one or more procedures.
STD, Critical Illness and Accident: Claim frequency is based on submitted claims.
Group Life: Claim frequency is based on submitted life claims (lives, not coverages).

We did not make any significant changes to our methodologies or assumptions used to calculate the liability for unpaid claims for short-duration contracts during 2019.

Liability for Unpaid Claims

The liability for unpaid claims for both long-duration and short-duration contracts is an estimate of the ultimate net cost of reported and unreported losses not yet settled. This liability is estimated using actuarial analyses and case basis evaluations. Although considerable variability is inherent in such estimates, we believe the liability for unpaid claims is adequate. These estimates are continually reviewed and, as adjustments to this liability become necessary, such adjustments are reflected in net income. Our liability for unpaid claims does not include any allocated claim adjustment expenses.

We incur claim adjustment expenses for both long-duration and short-duration contracts that cannot be allocated to a specific claim. Our claim adjustment expense liability is estimated using actuarial analyses based on historical trends of expenses and expected claim runout patterns.  

See Note 8, Insurance Liabilities, under the caption “Liability for Unpaid Claims” for further details.

Recognition of Premiums and Other Considerations, Fees and Other Revenues and Benefits - Policy

Recognition of Premiums and Other Considerations, Fees and Other Revenues and Benefits

Products with fixed and guaranteed premiums and benefits consist principally of whole life and term life insurance policies and individual disability income. Premiums from these products are recognized as premium revenue when due. Related policy benefits and expenses for individual life products are associated with earned premiums and result in the recognition of profits over the expected term of the policies and contracts.

Immediate annuities with life contingencies include products with fixed and guaranteed annuity considerations and benefits and consist principally of group and individual single premium annuities with life contingencies. Annuity considerations from these products are recognized as premium revenue. However, the collection of these annuity considerations does not represent the completion of the earnings process, as we establish annuity reserves using estimates for mortality and investment assumptions, which include provision for adverse deviation as required by U.S. GAAP. We anticipate profits to emerge over the life of the annuity products as we earn investment income, pay benefits and release reserves.

Group life, dental, vision, critical illness, accident and disability premiums are generally recorded as premium revenue over the term of the coverage. Certain group contracts contain experience premium refund provisions based on a pre-defined formula that reflects their claim experience. Experience premium refunds reduce revenue over the term of the coverage and are adjusted to reflect current experience. Related policy benefits and expenses are associated with earned premiums and result in the recognition of profits over the term of the policies and contracts. Fees for contracts providing claim processing or other administrative services are recorded as revenue over the period the service is provided.

1. Nature of Operations and Significant Accounting Policies (continued)

Universal life-type policies are insurance contracts with terms that are not fixed. Amounts received as payments for such contracts are not reported as premium revenues. Revenues for universal life-type insurance contracts consist of policy charges for the cost of insurance, policy initiation and administration, surrender charges and other fees that have been assessed against policy account values and investment income. Policy benefits and claims that are charged to expense include interest credited to contracts and benefit claims incurred in the period in excess of related policy account balances.

Investment contracts do not subject us to significant risks arising from policyholder mortality or morbidity and consist primarily of guaranteed investment contracts (“GICs”), funding agreements and certain deferred annuities. Amounts received as payments for investment contracts are established as investment contract liability balances and are not reported as premium revenues. Revenues for investment contracts consist of investment income and policy administration charges. Investment contract benefits that are charged to expense include benefit claims incurred in the period in excess of related investment contract liability balances and interest credited to investment contract liability balances.

Fees and other revenues are earned for asset management, investment advisory and distribution services provided to retail and institutional clients based largely upon contractual rates applied to the specified amounts in the clients’ portfolios, which include various platforms such as mutual funds, collective investment trusts and business trusts. Additionally, fees and other revenues are earned for administrative services performed including recordkeeping, trust and custody and reporting services for retirement savings plans, insurance companies, endowments and other financial institutions and other products. Fees and other revenues received for performance of asset management and administrative services are recognized as revenue when earned, typically when the service is performed.

Fees for managing customers’ mandatory retirement savings accounts in Chile are collected with each monthly deposit made by our customers. If a customer stops contributing before retirement age, we collect no fees but services are still provided. We recognize revenue from these long-term service contracts as services are performed over the life of the contract. 

Deferred Acquisition Costs - Policy

Deferred Acquisition Costs

Incremental direct costs of contract acquisition as well as certain costs directly related to acquisition activities (underwriting, policy issuance and processing, medical and inspection and sales force contract selling) for the successful acquisition of new and renewal insurance policies and investment contract business are capitalized to the extent recoverable. Commissions and other incremental direct costs for the acquisition of long-term service contracts are also capitalized to the extent recoverable. Maintenance costs and acquisition costs that are not deferrable are charged to net income as incurred.

DAC for universal life-type insurance contracts and certain investment contracts are amortized over the expected lifetime of the contracts in relation to EGPs or, in certain circumstances, estimated gross revenues (“EGR”). This amortization is adjusted in the current period when EGPs or EGRs are revised. EGRs include similar assumptions as the revenue component of EGPs and the changes of future estimates and reflection of actual experience and market conditions is done in the same manner as EGPs.

For individual variable universal life insurance, individual variable annuities and group annuities that have separate account U.S. equity investment options, we utilize a mean reversion methodology (reversion to the mean assumption), a common industry practice, to determine the future domestic equity market growth rate assumption used for the calculation of EGPs.

DAC for participating life insurance policies are amortized in proportion to estimated gross margins (“EGM”) rather than EGPs. EGMs include similar assumption items as EGPs. We stopped selling participating business in the early 2000s. Some products allow for underwritten death benefit increases and cost of living adjustments, resulting in a small amount of new DAC each year, and the amortization schedules are modified as appropriate.

DAC for non-participating term life insurance and individual disability policies are amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policyholder liabilities. Once these assumptions are made for a given policy or group of policies, they will not be changed over the life of the policy unless a loss recognition event occurs.

1. Nature of Operations and Significant Accounting Policies (continued)

DAC on insurance policies and investment contracts are subject to recoverability testing at the time of policy issue and loss recognition testing on an annual basis, or when an event occurs that may warrant loss recognition. If loss recognition or impairment is necessary, DAC would be written off to the extent it is determined that future policy premiums and investment income or gross profits are not adequate to cover related losses and expenses.

DAC on short-duration group benefits policies are amortized over the estimated term of the underlying contracts.

Deferred Acquisition Costs on Internal Replacements - Policy

Deferred Acquisition Costs on Internal Replacements

All insurance and investment contract modifications and replacements are reviewed to determine if the internal replacement results in a substantially changed contract. If so, the acquisition costs, sales inducements and unearned revenue associated with the new contract are deferred and amortized over the lifetime of the new contract. In addition, the existing DAC, sales inducement costs and unearned revenue balances associated with the replaced contract are written off. If an internal replacement results in a substantially unchanged contract, the acquisition costs, sales inducements and unearned revenue associated with the new contract are immediately recognized in the period incurred. In addition, the existing DAC, sales inducement costs or unearned revenue balance associated with the replaced contract is not written off, but instead is carried over to the new contract.

Long-Term Debt - Policy

Long-Term Debt

Long-term debt includes notes payable, nonrecourse mortgages and other debt with a maturity date greater than one year at the date of issuance. Current maturities of long-term debt are classified as long-term debt in our consolidated statements of financial position. Long-term debt is primarily recorded at the unpaid principal balance, net of unamortized discount, premium and issuance costs.

Reinsurance - Policy

Reinsurance

We enter into reinsurance agreements with other companies in the normal course of business in order to limit losses and minimize exposure to significant risks. We may assume reinsurance from or cede reinsurance to other companies. Assets and liabilities related to reinsurance ceded are reported on a gross basis. Premiums and expenses are reported net of reinsurance ceded. The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. We are contingently liable with respect to reinsurance ceded to other companies in the event the reinsurer is unable to meet the obligations it has assumed. As of December 31, 2019 and 2018, we had $465.5 million and $450.6 million of net ceded reinsurance recoverables related to claims that have been received, respectively. As of December 31, 2019 and 2018, $457.2 million, or 98%, and $435.6 million, or 97%, were with our five largest ceded reinsurers, respectively. Our total amount recoverable from reinsurers includes net ceded reinsurance recoverables related to claims that have been received and reserves ceded to reinsurers; however, it does not reflect potentially offsetting impacts of collateral. As of December 31, 2019 and 2018, the total amount recoverable from reinsurers was $961.4 million and $920.8 million, respectively,  and is recognized in premiums due and other receivables.

1. Nature of Operations and Significant Accounting Policies (continued)

The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows:

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Premiums and other considerations:

Direct

$

8,428.1

$

6,928.3

$

6,699.3

Assumed

1.6

 

1.7

 

1.9

Ceded

(563.1)

 

(520.4)

 

(483.8)

Net premiums and other considerations

$

7,866.6

$

6,409.6

$

6,217.4

Benefits, claims and settlement expenses:

Direct

$

10,463.6

$

8,667.7

$

8,216.3

Assumed

23.1

 

24.9

 

27.7

Ceded

(580.9)

 

(500.1)

 

(421.4)

Net benefits, claims and settlement expenses

$

9,905.8

$

8,192.5

$

7,822.6

Separate Accounts - Policy

Separate Accounts

The separate accounts are legally segregated and are not subject to the claims that arise out of any of our other business. The client, rather than us, directs the investments and bears the investment risk of these funds. The separate account assets represent the fair value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments and are presented as a summary total within the consolidated statements of financial position. An equivalent amount is reported as separate account liabilities, which represent the obligation to return the monies to the client. We receive fees for mortality, withdrawal and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses of the separate accounts are not reflected in the consolidated statements of operations.

Separate account assets and separate account liabilities include certain international retirement accumulation products where the segregated funds and associated obligation to the client are consolidated within our financial statements. We have determined that summary totals are the most meaningful presentation for these funds.

As of December 31, 2019 and December 31, 2018, the separate accounts included a separate account valued at $100.4 million and $94.9 million, respectively, which primarily included shares of our stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under our 2001 demutualization. These shares are included in both basic and diluted earnings per share calculations. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations.

Income Taxes - Policy

Income Taxes

We file a U.S. consolidated income tax return that includes all of our qualifying subsidiaries. In addition, we file income tax returns in all states and foreign jurisdictions in which we conduct business. Our policy of allocating income tax expenses and benefits to companies in the group is generally based upon pro rata contribution of taxable income or operating losses. We are taxed at corporate rates on taxable income based on existing tax laws. Current income taxes are charged or credited to net income based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. Deferred income taxes are provided for the tax effect of temporary differences in the financial reporting and income tax bases of assets and liabilities, net operating loss carryforwards and tax credit carryforwards using enacted income tax rates and laws. The effect on deferred income tax assets and deferred income tax liabilities of a change in tax rates is recognized in net income in the period in which the change is enacted. Subsequent to a change in tax rates and laws, any stranded tax effects remaining in AOCI will be released only if an entire portfolio is liquidated, sold or extinguished.

1. Nature of Operations and Significant Accounting Policies (continued)

However, a specific exception to this rule was adopted effective January 1, 2018, to reclassify the stranded tax effects generated by U.S. tax reform from AOCI to retained earnings. Further details are included under the caption “Recent Accounting Pronouncements.”

Foreign Exchange - Policy

Foreign Exchange

Assets and liabilities of our foreign subsidiaries and affiliates denominated in non-U.S. dollars, where the U.S. dollar is not the functional currency, are translated into U.S. dollar equivalents at the year-end spot foreign exchange rates. Resulting translation adjustments are reported as a component of stockholders' equity, along with any related hedge and tax effects. Revenues and expenses for these entities are translated at the average exchange rates. Revenue, expense and other foreign currency transaction and translation adjustments that affect cash flows are reported in net income, along with related hedge and tax effects.

Goodwill and Other Intangibles - Policy

Goodwill and Other Intangibles

Goodwill and other intangible assets include the cost of acquired subsidiaries in excess of the fair value of the net tangible assets recorded in connection with acquisitions. Goodwill and indefinite-lived intangible assets are not amortized. Rather, they are tested for impairment during the third quarter each year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Goodwill is tested at the reporting unit level, which is a business one level below the operating segment, if financial information is prepared and regularly reviewed by management at that level. Once goodwill has been assigned to a reporting unit, it is no longer associated with a particular acquisition; therefore, all of the activities within a reporting unit, whether acquired or organically grown, are available to support the goodwill value. Impairment testing for indefinite-lived intangible assets consists of a comparison of the fair value of the intangible asset with its carrying value.

Intangible assets with a finite useful life are amortized as related benefits emerge and are reviewed periodically for indicators of impairment in value. If facts and circumstances suggest possible impairment, the sum of the estimated undiscounted future cash flows expected to result from the use of the asset is compared to the current carrying value of the asset. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized for the excess of the carrying amount of assets over their fair value.

Earnings Per Common Share - Policy

Earnings Per Common Share

Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period and excludes the dilutive effect of equity awards. Diluted earnings per common share reflects the potential dilution that could occur if dilutive securities, such as options and non-vested stock grants, were exercised or resulted in the issuance of common stock.

v3.19.3.a.u2
Nature of Operations and Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2019
Nature of Operations and Significant Accounting Policies  
Effects of Reinsurance on Premiums and Other Considerations and Policy and Contract Benefits (Table)

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Premiums and other considerations:

Direct

$

8,428.1

$

6,928.3

$

6,699.3

Assumed

1.6

 

1.7

 

1.9

Ceded

(563.1)

 

(520.4)

 

(483.8)

Net premiums and other considerations

$

7,866.6

$

6,409.6

$

6,217.4

Benefits, claims and settlement expenses:

Direct

$

10,463.6

$

8,667.7

$

8,216.3

Assumed

23.1

 

24.9

 

27.7

Ceded

(580.9)

 

(500.1)

 

(421.4)

Net benefits, claims and settlement expenses

$

9,905.8

$

8,192.5

$

7,822.6

v3.19.3.a.u2
Goodwill and Other Intangible Assets (Tables)
12 Months Ended
Dec. 31, 2019
Goodwill and Other Intangible Assets  
Goodwill (Table)

    

Retirement

    

Principal

    

    

U.S.

    

    

  

and Income

Global

Principal

Insurance

Solutions

Investors

International

Solutions

Corporate

Consolidated

(in millions)

Balance as of January 1, 2018

$

57.4

$

247.3

$

707.5

$

56.6

$

$

1,068.8

Goodwill from acquisitions (1)

65.0

46.8

2.1

113.9

Goodwill disposed (2)

(12.0)

(12.0)

Foreign currency

 

 

(5.0)

 

(65.7)

 

 

 

(70.7)

Balance as of December 31, 2018

57.4

307.3

676.6

56.6

2.1

1,100.0

Goodwill from acquisitions (3)

618.5

6.5

(1.1)

623.9

Foreign currency

1.5

(31.6)

(30.1)

Other (4)

2.2

(2.2)

Balance as of December 31, 2019

$

675.9

$

317.5

$

642.8

$

56.6

$

1.0

$

1,693.8

(1)Relates to the acquisitions of: a) RobustWealth, a financial technology company, which is consolidated within our Corporate segment with the majority of the goodwill allocated to our Principal Global Investors segment; b) INTERNOS, a London-based European real estate investment manager that, upon acquisition, became Principal Real Estate Europe Limited and is consolidated within our Principal Global Investors segment; c) MetLife Afore, S.A. de C.V., which was MetLife, Inc.’s pension fund management business in Mexico and is consolidated within our Principal International segment.
(2)Relates to sales of closed blocks of business in Mexico.
(3)Relates to the acquisitions of: a) Wells Fargo Institutional Retirement & Trust business consolidated within our Retirement and Income Solutions segment; b) a consolidating interest in Finisterre Capital LLP within our Principal Global Investors segment for which we previously held an equity method interest; c) measurement period adjustments related to RobustWealth within our Principal Global Investors segment and Corporate segment.
(4)Relates to the movement of our investment management company in Brazil from the Principal International segment to the Principal Global Investors segment.
Finite Lived Intangible Assets (Table)

December 31, 

    

2019

    

2018

  

(in millions)

Gross carrying value

$

1,346.3

$

810.2

Accumulated amortization

 

343.2

288.4

Net carrying value

$

1,003.1

$

521.8

Other Finite Lived Intangible Assets Estimated Amortization Expense (Table)

Year ending December 31:

    

  

2020

$

74.5

2021

73.2

2022

72.4

2023

70.2

2024

69.0

v3.19.3.a.u2
Variable Interest Entities (Tables)
12 Months Ended
Dec. 31, 2019
Variable Interest Entities  
Carrying Amounts of Assets and Liabilities of Consolidated Variable Interest Entities (Table)

December 31, 2019

    

December 31, 2018

Total

Total

Total

Total

    

assets

    

liabilities

    

assets

    

liabilities

  

(in millions)

Grantor trust (1)

$

99.9

$

98.6

$

95.0

$

89.4

CMBS

 

 

 

6.4

 

Mandatory retirement savings funds (2)

 

39,891.1

 

39,524.9

 

37,915.7

 

37,579.3

Real estate (3)

 

479.7

 

88.0

 

379.2

 

70.6

Sponsored investment funds (4)

 

331.4

 

2.2

 

526.5

 

3.6

Total

$

40,802.1

$

39,713.7

$

38,922.8

$

37,742.9

(1)The assets of the grantor trust are primarily fixed maturities, available-for-sale. The liabilities are primarily other liabilities that reflect an embedded derivative of the forecasted transaction to deliver the underlying securities.
(2)The assets of the mandatory retirement savings funds include separate account assets and equity securities. The liabilities include separate account liabilities and contractholder funds.
(3)The assets of the real estate VIEs primarily include real estate and cash. Liabilities primarily include long-term debt and other liabilities.
(4)The assets of sponsored investment funds are primarily fixed maturities and equity securities, certain of which are reported with other investments, and cash. The consolidated statements of financial position included a $215.4 million and $325.7 million redeemable noncontrolling interest for sponsored investment funds as of December 31, 2019 and December 31, 2018, respectively.
Asset Carrying Value and Maximum Loss Exposure of Unconsolidated Variable Interest Entities (Table)

Maximum exposure to

    

Asset carrying value

    

loss (1)

  

(in millions)

December 31, 2019

Fixed maturities, available-for-sale:

Corporate

$

238.2

$

225.7

Residential mortgage-backed pass-through securities

2,982.4

2,913.9

Commercial mortgage-backed securities

4,850.2

4,746.6

Collateralized debt obligations (2)

 

3,215.3

 

3,226.7

Other debt obligations

 

8,191.1

 

8,076.4

Fixed maturities, trading:

Residential mortgage-backed pass-through securities

 

282.3

 

282.3

Commercial mortgage-backed securities

 

28.2

 

28.2

Collateralized debt obligations (2)

20.9

20.9

Other debt obligations

13.2

13.2

Equity securities

123.2

123.2

Other investments:

Other limited partnership and fund interests (3)

 

911.9

 

1,467.0

December 31, 2018

Fixed maturities, available-for-sale:

Corporate

$

235.3

$

222.6

Residential mortgage-backed pass-through securities

2,460.6

2,488.5

Commercial mortgage-backed securities

3,945.6

4,023.1

Collateralized debt obligations (2)

 

2,420.8

 

2,451.3

Other debt obligations

 

7,153.2

 

7,196.6

Fixed maturities, trading:

Residential mortgage-backed pass-through securities

 

322.6

 

322.6

Commercial mortgage-backed securities

 

13.8

 

13.8

Collateralized debt obligations (2)

11.8

11.8

Other debt obligations

9.7

9.7

Equity securities

103.9

103.9

Other investments:

Other limited partnership and fund interests (3)

 

737.5

 

1,432.2

(1)Our risk of loss is limited to our initial investment measured at amortized cost for fixed maturities, available-for-sale. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading and equity securities. Our risk of loss is limited to our carrying value plus any unfunded commitments and/or guarantees and similar provisions for our other investments. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional equity when called upon to do so by the general partner or investment manager.
(2)Primarily consists of collateralized loan obligations backed by secured corporate loans.
(3)As of December 31, 2019 and December 31, 2018, the maximum exposure to loss for other limited partnership and fund interests includes $129.1 million and $132.2 million, respectively, of debt within certain of our managed international real estate funds that is fully secured by assets whose value exceeds the amount of the debt, but also includes recourse to the investment manager.
v3.19.3.a.u2
Investments (Tables)
12 Months Ended
Dec. 31, 2019
Investments  
Fixed Maturities and Equity Securities Available-for-Sale (Table)

Other-than-

Gross

Gross

temporary

Amortized

unrealized

unrealized

impairments in

    

cost

    

gains

    

losses

    

Fair value

    

AOCI (1)

  

(in millions)

December 31, 2019

Fixed maturities, available-for-sale:

U.S. government and agencies

$

1,627.0

$

100.2

$

3.0

$

1,724.2

$

Non-U.S. governments

 

852.3

 

144.1

 

0.2

 

996.2

 

States and political subdivisions

 

6,857.1

 

644.5

 

11.6

 

7,490.0

 

Corporate

 

36,993.1

 

3,706.5

 

52.2

 

40,647.4

 

Residential mortgage-backed pass-through securities

 

2,913.9

 

72.3

 

3.8

 

2,982.4

 

Commercial mortgage-backed securities

 

4,746.6

 

127.6

 

24.0

 

4,850.2

 

15.8

Collateralized debt obligations (2)

 

3,226.7

 

2.9

 

14.3

 

3,215.3

 

0.9

Other debt obligations

 

8,085.8

 

129.6

 

14.9

 

8,200.5

 

31.7

Total fixed maturities, available-for-sale

$

65,302.5

$

4,927.7

$

124.0

$

70,106.2

$

48.4

December 31, 2018

Fixed maturities, available-for-sale:

U.S. government and agencies

$

1,441.6

$

16.4

$

17.0

$

1,441.0

$

Non-U.S. governments

 

833.4

 

71.7

 

14.6

 

890.5

 

States and political subdivisions

 

6,125.0

 

196.0

 

95.3

 

6,225.7

 

Corporate

 

35,134.6

 

1,249.9

 

845.2

 

35,539.3

 

Residential mortgage-backed pass-through securities

 

2,488.5

 

21.9

 

49.8

 

2,460.6

 

Commercial mortgage-backed securities

 

4,023.1

 

17.1

 

94.6

 

3,945.6

 

16.3

Collateralized debt obligations (2)

 

2,451.3

 

 

30.5

 

2,420.8

 

1.2

Other debt obligations

 

7,228.3

 

39.4

 

82.7

 

7,185.0

 

36.1

Total fixed maturities, available-for-sale

$

59,725.8

$

1,612.4

$

1,229.7

$

60,108.5

$

53.6

(1)Excludes $62.3 million and $64.2 million as of December 31, 2019 and December 31, 2018, respectively, of net unrealized gains on impaired fixed maturities, available-for-sale related to changes in fair value subsequent to the impairment date, which are included in gross unrealized gains and gross unrealized losses.
(2)Primarily consists of collateralized loan obligations backed by secured corporate loans.
Fixed Maturities Available-for-Sale by Contractual Maturity (Table)

    

Amortized cost

    

Fair value

  

(in millions)

Due in one year or less

$

2,138.3

$

2,154.0

Due after one year through five years

9,955.3

10,319.2

Due after five years through ten years

12,080.0

12,894.4

Due after ten years

22,155.9

25,490.2

Subtotal

46,329.5

50,857.8

Mortgage-backed and other asset-backed securities

18,973.0

19,248.4

Total

$

65,302.5

$

70,106.2

Net Investment Income (Table)

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Fixed maturities, available-for-sale (1)

$

2,606.0

$

2,479.9

$

2,342.3

Fixed maturities, trading

23.8

 

26.4

 

12.6

Equity securities, available-for-sale

 

 

21.7

Equity securities, trading

 

 

46.1

Equity securities

110.5

38.8

Mortgage loans

707.0

 

641.4

 

605.9

Real estate

191.1

 

158.8

 

129.4

Policy loans

44.0

 

45.0

 

45.6

Cash and cash equivalents

65.3

 

56.2

 

28.6

Derivatives (1)

(2.0)

 

0.1

 

(3.2)

Other

370.8

 

285.0

 

319.6

Total

4,116.5

 

3,731.6

 

3,548.6

Investment expenses

(118.1)

 

(102.4)

 

(89.3)

Net investment income

$

3,998.4

$

3,629.2

$

3,459.3

(1)Upon adoption of authoritative guidance effective January 1, 2019, the change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships are reported in net investment income with the earnings effect of fixed maturities, available-for-sale. Prior to 2019, the change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships were reported in net realized capital gains (losses). See Note 5, Derivative Financial Instruments, for further details.
Net Realized Capital Gains and Losses (Table)

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Fixed maturities, available-for-sale:

Gross gains

$

15.5

$

40.2

$

14.7

Gross losses

(15.3)

 

(74.8)

 

(27.2)

Net impairment losses

(43.5)

 

(29.1)

 

(81.7)

Hedging, net (1)

(9.3)

 

(39.6)

 

(28.5)

Fixed maturities, trading (2)

43.0

 

(9.0)

 

(8.0)

Equity securities, available-for-sale:

Gross gains

 

 

0.2

Net impairment losses

(0.1)

Equity securities, trading (3)

 

 

65.0

Equity securities (4)

84.5

(17.7)

Mortgage loans

3.0

 

6.2

 

9.0

Derivatives (1)

(120.3)

 

11.7

 

(149.8)

Other (5)

(10.4)

 

36.7

 

730.6

Net realized capital gains (losses)

$

(52.8)

$

(75.4)

$

524.2

(1)Upon adoption of authoritative guidance effective January 1, 2019, the change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships are reported in net investment income with the earnings effect of fixed maturities, available-for-sale. Prior to 2019, the change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships were reported in net realized capital gains (losses). See Note 5, Derivative Financial Instruments, for further details. Gains (losses) for fixed maturities, available-for-sale related to terminated cash flow hedges continue to be reflected in net realized capital gains (losses).
(2)Unrealized gains (losses) on fixed maturities, trading still held at the reporting date were $32.8 million, $(12.2) million and $(7.5) million for the years ended December 31, 2019, 2018 and 2017, respectively.
(3)Unrealized gains on equity securities, trading still held at the reporting date were $45.3 million for the year ended December 31, 2017. This excludes $34.9 million of unrealized gains on equity securities, trading still held at the reporting date for the year ended December 31, 2017 that were reported in net investment income.
(4)Unrealized gains (losses) on equity securities still held at the reporting date were $61.6 million and $(39.9) million for the years ended December 31, 2019 and 2018, respectively. This excludes $66.9 million and $4.9 million of unrealized gains on equity securities still held at the reporting date for the years ended December 31, 2019 and 2018, respectively, that were reported in net investment income.
(5)Further details relating to other gains in 2017 are included under the caption “ Real Estate Transactions."
Other-Than-Temporary Impairment Losses, Net of Recoveries (Table)

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Fixed maturities, available-for-sale

$

(38.3)

$

10.6

$

(28.6)

Equity securities, available-for-sale

 

 

(0.1)

Total other-than-temporary impairment losses, net of recoveries from the sale of previously impaired securities

(38.3)

 

10.6

 

(28.7)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from OCI (1)

(5.2)

 

(39.7)

 

(53.1)

Net impairment losses on available-for-sale securities

$

(43.5)

$

(29.1)

$

(81.8)

(1)Represents the net impact of (a) gains resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI and (b) losses resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold.
Other-Than-Temporary Impairment, Credit Losses Recognized in Earnings (Table)

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Beginning balance

$

(117.5)

$

(124.3)

$

(139.9)

Credit losses for which an other-than-temporary impairment was not previously recognized

(6.8)

 

(11.3)

 

(15.0)

Credit losses for which an other-than-temporary impairment was previously recognized

(11.8)

 

(20.0)

 

(42.5)

Reduction for credit losses previously recognized on fixed maturities now sold, paid down or intended to be sold

54.3

 

29.5

 

63.3

Net reduction for positive changes in cash flows expected to be collected and amortization (1)

0.8

 

8.6

 

10.0

Foreign currency translation adjustment

 

 

(0.2)

Ending balance

$

(81.0)

$

(117.5)

$

(124.3)

(1)Amounts are recognized in net investment income.
Gross Unrealized Losses for Fixed Maturities and Equity Securities (Table)

  

December 31, 2019

Less than

Greater than or

    

twelve months

 

equal to twelve months

Total

    

    

Gross

 

    

Gross

    

Gross

Fair

unrealized

Fair

unrealized

Fair

unrealized

value

losses

    

value

    

losses

    

value

    

losses

  

(in millions)

Fixed maturities, available-for-sale:

U.S. government and agencies

$

100.0

$

1.9

$

74.2

$

1.1

$

174.2

$

3.0

Non-U.S. governments

 

17.6

 

0.2

 

12.4

 

 

30.0

 

0.2

States and political subdivisions

 

559.9

 

11.2

 

86.3

 

0.4

 

646.2

 

11.6

Corporate

 

1,041.5

 

27.8

 

394.7

 

24.4

 

1,436.2

 

52.2

Residential mortgage-backed pass- through securities

 

429.6

 

1.4

 

237.3

 

2.4

 

666.9

 

3.8

Commercial mortgage-backed securities

 

829.3

 

9.2

 

268.5

 

14.8

 

1,097.8

 

24.0

Collateralized debt obligations (1)

 

639.4

 

1.8

 

1,447.8

 

12.5

 

2,087.2

 

14.3

Other debt obligations

 

1,772.8

 

9.5

 

613.7

 

5.4

 

2,386.5

 

14.9

Total fixed maturities, available-for-sale

$

5,390.1

$

63.0

$

3,134.9

$

61.0

$

8,525.0

$

124.0

(1) Primarily consists of collateralized loan obligations backed by secured corporate loans.

December 31, 2018

Less than

Greater than or

 

twelve months

 

equal to twelve months

Total

    

Gross

    

Gross

    

Gross

Fair

unrealized

Fair

unrealized

Fair

unrealized

    

value

    

losses

    

value

    

losses

    

value

    

losses

  

(in millions)

Fixed maturities, available-for-sale:

U.S. government and agencies

$

101.8

$

1.6

$

500.3

$

15.4

$

602.1

$

17.0

Non-U.S. governments

 

210.2

 

4.7

 

191.5

 

9.9

 

401.7

 

14.6

States and political subdivisions

 

1,359.9

 

33.9

 

1,590.3

 

61.4

 

2,950.2

 

95.3

Corporate

 

13,198.4

 

476.0

 

6,865.0

 

369.2

 

20,063.4

 

845.2

Residential mortgage-backed pass- through securities

 

236.7

 

1.0

 

1,410.2

 

48.8

 

1,646.9

 

49.8

Commercial mortgage-backed securities

 

790.3

 

11.6

 

2,223.2

 

83.0

 

3,013.5

 

94.6

Collateralized debt obligations (1)

 

2,233.3

 

24.0

 

162.6

 

6.5

 

2,395.9

 

30.5

Other debt obligations

 

985.5

 

4.9

 

3,665.1

 

77.8

 

4,650.6

 

82.7

Total fixed maturities, available-for-sale

$

19,116.1

$

557.7

$

16,608.2

$

672.0

$

35,724.3

$

1,229.7

(1) Primarily consists of collateralized loan obligations backed by secured corporate loans.

Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments (Table)

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Net unrealized gains on fixed maturities, available-for-sale (1)

$

4,834.2

$

400.8

Noncredit component of impairment losses on fixed maturities, available-for-sale

(48.4)

 

(53.6)

Net unrealized gains on derivative instruments

94.1

 

118.5

Adjustments for assumed changes in amortization patterns

(261.0)

 

30.3

Adjustments for assumed changes in policyholder liabilities

(1,133.5)

 

(293.7)

Net unrealized gains on other investments and noncontrolling interest adjustments

96.8

 

68.8

Provision for deferred income taxes

(766.9)

 

(63.8)

Net unrealized gains on available-for-sale securities and derivative instruments

$

2,815.3

$

207.3

(1)Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships.
Mortgage Loans (Table)

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Commercial mortgage loans

$

15,017.2

$

13,996.3

Residential mortgage loans

1,496.7

 

1,368.0

Total amortized cost

16,513.9

 

15,364.3

Valuation allowance

(27.0)

 

(27.4)

Total carrying value

$

16,486.9

$

15,336.9

Mortgage Loans Purchased and Sold (Table)

 

For the year ended December 31,

    

2019

    

2018

    

2017

  

(in millions)

Commercial mortgage loans:

Purchased

$

200.5

$

127.5

$

144.2

Sold

1.6

2.2

28.9

Residential mortgage loans:

Purchased

489.2

394.2

346.0

Sold

70.7

80.3

152.2

Commercial Mortgage Loans by Geographic Distribution and Property Type Distribution (Table)

  

December 31, 2019

December 31, 2018

Amortized

 

Percent

Amortized

Percent

    

cost

    

of total

    

cost

    

of total

   

($ in millions)

 

Geographic distribution

New England

$

613.9

4.1

%  

$

640.6

4.6

%

Middle Atlantic

4,139.7

27.5

 

3,927.3

28.0

East North Central

624.5

4.2

 

592.8

4.2

West North Central

237.2

1.6

 

205.8

1.5

South Atlantic

2,318.4

15.4

 

2,206.5

15.8

East South Central

438.5

2.9

 

422.5

3.0

West South Central

1,450.0

9.7

 

1,213.8

8.7

Mountain

931.8

6.2

 

968.6

6.9

Pacific

3,963.7

26.4

 

3,567.6

25.5

International

299.5

2.0

 

250.8

1.8

Total

$

15,017.2

 

100.0

%  

$

13,996.3

 

100.0

%

Property type distribution

Office

$

4,887.1

32.6

%

$

4,625.8

33.0

%

Retail

2,052.6

13.7

 

2,305.6

16.5

Industrial

2,268.5

15.1

 

2,312.9

16.5

Apartments

5,246.9

34.9

 

4,250.5

30.4

Hotel

90.8

0.6

 

99.8

0.7

Mixed use/other

471.3

3.1

 

401.7

2.9

Total

$

15,017.2

 

100.0

%  

$

13,996.3

 

100.0

%

Commercial Mortgage Loan Portfolio by Credit Risk (Table)

December 31, 2019

    

Brick and mortar

    

CTL

    

Total

  

(in millions)

A- and above

$

13,885.2

$

76.7

$

13,961.9

BBB+ thru BBB-

 

943.1

 

83.8

 

1,026.9

BB+ thru BB-

 

23.3

 

 

23.3

B+ and below

 

5.1

 

 

5.1

Total

$

14,856.7

$

160.5

$

15,017.2

 

December 31, 2018

    

Brick and mortar

    

CTL

    

Total

  

(in millions)

A- and above

$

12,735.2

$

84.3

$

12,819.5

BBB+ thru BBB-

 

977.3

 

105.7

 

1,083.0

BB+ thru BB-

 

88.3

 

 

88.3

B+ and below

 

5.5

 

 

5.5

Total

$

13,806.3

$

190.0

$

13,996.3

Performing and Non-Performing Residential Mortgage Loans (Table)

December 31, 2019

    

First liens

    

Home equity

    

Total

  

(in millions)

Performing

$

1,474.2

$

8.0

$

1,482.2

Non-performing

 

11.5

 

3.0

 

14.5

Total

$

1,485.7

$

11.0

$

1,496.7

4. Investments (continued)

December 31, 2018

    

First liens

    

Home equity

    

Total

  

(in millions)

Performing

$

1,340.3

$

10.8

$

1,351.1

Non-performing

 

12.6

 

4.3

 

16.9

Total

$

1,352.9

$

15.1

$

1,368.0

Non-Accrual Mortgage Loans (Table)

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Residential:

First liens

$

8.8

$

10.1

Home equity

3.0

 

4.3

Total

$

11.8

$

14.4

Mortgage Loans Aging (Table)

    

December 31, 2019

    

    

    

Recorded

investment

90 days or

90 days or

30-59 days

60-89 days

more past

Total

more and

    

past due

    

past due

    

due

    

past due

    

Current

    

Total loans

    

accruing

  

(in millions)

Commercial-brick and mortar

$

$

$

$

$

14,856.7

$

14,856.7

$

Commercial-CTL

160.5

160.5

Residential-first liens

46.6

9.3

11.2

67.1

1,418.6

1,485.7

2.7

Residential-home equity

0.8

0.3

1.1

9.9

11.0

Total

$

47.4

$

9.3

$

11.5

$

68.2

$

16,445.7

$

16,513.9

$

2.7

December 31, 2018

Recorded

investment

90 days or

90 days or

30-59 days

60-89 days

more past

Total

more and

    

past due

    

past due

    

due

    

past due

    

Current

    

Total loans

    

accruing

  

(in millions)

Commercial-brick and mortar

$

$

$

$

$

13,806.3

$

13,806.3

$

Commercial-CTL

190.0

190.0

Residential-first liens

44.3

8.4

12.1

64.8

1,288.1

1,352.9

2.5

Residential-home equity

0.8

0.6

0.4

1.8

13.3

15.1

Total

$

45.1

$

9.0

$

12.5

$

66.6

$

15,297.7

$

15,364.3

$

2.5

Mortgage Loan Valuation Allowance (Table)

    

Commercial

    

Residential

    

Total

  

(in millions)

For the year ended December 31, 2019

Beginning balance

$

24.3

$

3.1

$

27.4

Provision

 

0.2

 

(3.2)

 

(3.0)

Charge-offs

 

 

(0.6)

 

(0.6)

Recoveries

 

 

3.2

 

3.2

Ending balance

$

24.5

$

2.5

$

27.0

Allowance ending balance by basis of impairment method:

Individually evaluated for impairment

$

$

1.4

$

1.4

Collectively evaluated for impairment

 

24.5

 

1.1

 

25.6

Allowance ending balance

$

24.5

$

2.5

$

27.0

Loan balance by basis of impairment method:

Individually evaluated for impairment

$

$

11.4

$

11.4

Collectively evaluated for impairment

 

15,017.2

 

1,485.3

 

16,502.5

Loan ending balance

$

15,017.2

$

1,496.7

$

16,513.9

For the year ended December 31, 2018

Beginning balance

$

25.8

$

6.9

$

32.7

Provision

 

(1.5)

 

(4.5)

 

(6.0)

Charge-offs

 

 

(2.4)

 

(2.4)

Recoveries

 

 

3.1

 

3.1

Ending balance

$

24.3

$

3.1

$

27.4

Allowance ending balance by basis of impairment method:

Individually evaluated for impairment

$

$

1.4

$

1.4

Collectively evaluated for impairment

 

24.3

 

1.7

 

26.0

Allowance ending balance

$

24.3

$

3.1

$

27.4

Loan balance by basis of impairment method:

Individually evaluated for impairment

$

$

9.2

$

9.2

Collectively evaluated for impairment

 

13,996.3

 

1,358.8

 

15,355.1

Loan ending balance

$

13,996.3

$

1,368.0

$

15,364.3

For the year ended December 31, 2017

Beginning balance

$

27.4

$

17.5

$

44.9

Provision

 

(1.6)

 

(10.4)

 

(12.0)

Charge-offs

 

 

(5.1)

 

(5.1)

Recoveries

 

 

4.9

 

4.9

Ending balance

$

25.8

$

6.9

$

32.7

Allowance ending balance by basis of impairment method:

Individually evaluated for impairment

$

$

4.5

$

4.5

Collectively evaluated for impairment

 

25.8

 

2.4

 

28.2

Allowance ending balance

$

25.8

$

6.9

$

32.7

Loan balance by basis of impairment method:

Individually evaluated for impairment

$

$

12.5

$

12.5

Collectively evaluated for impairment

 

12,897.3

 

1,273.4

 

14,170.7

Loan ending balance

$

12,897.3

$

1,285.9

$

14,183.2

Impaired Mortgage Loans (Table)

December 31, 2019

Unpaid

Recorded

principal

Related

    

investment

    

balance

    

allowance

  

(in millions)

With no related allowance recorded:

Residential-first liens

$

0.8

$

$

With an allowance recorded:

Residential-first liens

 

6.8

 

5.1

 

0.2

Residential-home equity

 

3.8

 

5.0

 

1.2

Total:

Residential

$

11.4

$

10.1

$

1.4

 

December 31, 2018

 

 

Unpaid

 

Recorded

principal

Related

    

investment

    

balance

    

allowance

  

(in millions)

With no related allowance recorded:

Residential-first liens

$

1.6

$

1.6

$

With an allowance recorded:

Residential-first liens

 

2.2

 

2.2

 

Residential-home equity

 

5.4

 

6.5

 

1.4

Total:

Residential

$

9.2

$

10.3

$

1.4

  

Average

 

    

recorded

Interest income

    

investment

    

recognized

(in millions)

For the year ended December 31, 2019

With no related allowance recorded:

Residential-first liens

$

1.2

$

With an allowance recorded:

Residential-first liens

 

4.5

 

0.1

Residential-home equity

 

4.6

 

0.1

Total:

Residential

$

10.3

$

0.2

For the year ended December 31, 2018

With no related allowance recorded:

Residential-first liens

$

1.3

$

With an allowance recorded:

Residential-first liens

 

3.2

 

0.1

Residential-home equity

 

6.5

 

0.2

Total:

Residential

$

11.0

$

0.3

For the year ended December 31, 2017

With no related allowance recorded:

Residential-first liens

$

1.2

$

With an allowance recorded:

Residential-first liens

 

4.4

 

0.2

Residential-home equity

 

10.3

 

0.2

Total:

Residential

$

15.9

$

0.4

Minority Interests in Unconsolidated Entities-Balance Sheet (Table)

December 31, 

    

2019

    

2018

(in millions)

Total assets

$

158,439.7

$

135,355.6

Total liabilities

88,455.8

 

80,265.4

Total equity

$

69,983.9

$

55,090.2

Net investment in unconsolidated entities (1)

$

1,825.5

$

1,723.7

Minority Interests in Unconsolidated Entities-Income Statement (Table)

For the year ended

December 31, 

    

2019

    

2018

    

2017

(in millions)

Total revenues

$

17,802.2

$

15,389.4

$

15,020.9

Net income

7,938.3

 

6,542.1

 

4,530.1

Our share of net income of unconsolidated entities (1)

222.5

 

161.6

 

232.7

(1)Our most significant equity investee is Brasilprev Seguros e Previdencia, a co-managed joint venture in Brazil.
Financial Assets Subject to Netting Agreements (Table)

Gross amounts not offset in the

consolidated statements

of financial position

 

Gross amount

 

    

    

 

    

of recognized

Financial

Collateral

    

assets (1)

    

instruments (2)

    

received

    

Net amount

   

(in millions)

December 31, 2019

Derivative assets

$

288.7

$

(88.4)

$

(197.6)

$

2.7

Reverse repurchase agreements

 

23.6

 

 

(23.6)

 

Total

$

312.3

$

(88.4)

$

(221.2)

$

2.7

December 31, 2018

Derivative assets

$

186.3

$

(70.5)

$

(108.1)

$

7.7

Reverse repurchase agreements

 

53.0

 

 

(53.0)

 

Total

$

239.3

$

(70.5)

$

(161.1)

$

7.7

(1)The gross amount of recognized derivative and reverse repurchase agreement assets are reported with other investments and cash and cash equivalents, respectively, on the consolidated statements of financial position. The above excludes $6.0 million and $7.7 million of derivative assets as of December 31, 2019 and December 31, 2018, respectively, that are not subject to master netting agreements or similar agreements. The gross amounts of derivative and reverse repurchase agreement assets are not netted against offsetting liabilities for presentation on the consolidated statements of financial position.
(2)Represents amount of offsetting derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets for presentation on the consolidated statements of financial position.

Financial Liabilities Subject to Netting Agreements (Table)

Gross amounts not offset in the

consolidated statements

of financial position

    

Gross amount

    

 

    

    

of recognized

Financial

Collateral

    

liabilities (1)

    

instruments (2)

    

pledged

    

Net amount

  

(in millions)

December 31, 2019

Derivative liabilities

$

216.0

$

(88.4)

$

(118.3)

$

9.3

December 31, 2018

Derivative liabilities

$

153.4

$

(70.5)

$

(52.3)

$

30.6

(1)The gross amount of recognized derivative liabilities is reported with other liabilities on the consolidated statements of financial position. The above excludes $314.5 million and $138.3 million of derivative liabilities as of December 31, 2019 and December 31, 2018, respectively, which are primarily embedded derivatives that are not subject to master netting agreements or similar agreements. The gross amounts of derivative liabilities are not netted against offsetting assets for presentation on the consolidated statements of financial position.
(2)Represents amount of offsetting derivative assets that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative liabilities for presentation on the consolidated statements of financial position.
v3.19.3.a.u2
Derivative Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2019
Derivative Financial Instruments  
Derivative Financial Instruments, Exposure (Table)

    

December 31, 2019

    

December 31, 2018

(in millions)

Notional amounts of derivative instruments

Interest rate contracts:

Interest rate swaps

$

35,173.6

$

34,393.7

Interest rate options

1,416.9

 

1,126.9

Interest rate futures

142.5

 

260.0

Swaptions

62.0

 

Foreign exchange contracts:

Currency forwards

1,262.6

 

863.6

Currency swaps

1,027.2

 

898.6

Currency options

53.8

525.2

Equity contracts:

Equity options

1,672.8

 

1,522.5

Equity futures

149.5

 

491.7

Credit contracts:

Credit default swaps

165.0

 

420.0

Other contracts:

Embedded derivatives

9,742.3

 

9,452.3

Total notional amounts at end of period

$

50,868.2

$

49,954.5

Credit exposure of derivative instruments

Interest rate contracts:

Interest rate swaps

$

181.9

$

95.4

Interest rate options

28.3

 

16.3

Foreign exchange contracts:

Currency swaps

55.4

 

71.2

Currency forwards

4.9

 

2.8

Currency options

0.1

1.9

Equity contracts:

Equity options

30.5

 

7.7

Credit contracts:

Credit default swaps

0.5

 

2.4

Total gross credit exposure

301.6

 

197.7

Less: collateral received

208.3

 

122.9

Net credit exposure

$

93.3

$

74.8

Derivative Financial Instruments, Fair Value Disclosures (Table)

Derivative assets (1)

Derivative liabilities (2)

    

December 31, 2019

    

December 31, 2018

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Derivatives designated as hedging instruments

Interest rate contracts

$

$

$

21.3

$

16.1

Foreign exchange contracts

30.0

 

37.6

15.2

 

13.5

Total derivatives designated as hedging instruments

$

30.0

$

37.6

$

36.5

$

29.6

Derivatives not designated as hedging instruments

Interest rate contracts

$

204.2

$

108.0

$

16.7

$

22.6

Foreign exchange contracts

29.5

 

38.4

100.2

 

72.9

Equity contracts

30.5

 

7.7

63.1

 

27.6

Credit contracts

0.5

 

2.3

1.2

 

4.4

Other contracts

 

312.8

 

134.6

Total derivatives not designated as hedging instruments

264.7

 

156.4

494.0

 

262.1

Total derivative instruments

$

294.7

$

194.0

$

530.5

$

291.7

(1)The fair value of derivative assets is reported with other investments on the consolidated statements of financial position.
(2)The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivatives with a net liability fair value of $214.2 million and $45.2 million as of December 31, 2019 and December 31, 2018, respectively, are reported with contractholder funds on the consolidated statements of financial position.
Credit Derivatives Sold (Table)

 

December 31, 2019

 

    

  

    

 

    

Weighted

Maximum

average

Notional

Fair

future

expected life

    

amount

    

value

    

payments

    

(in years)

(in millions)

Single name credit default swaps

Corporate debt

A

$

5.0

$

$

5.0

 

0.5

BBB

 

70.0

 

0.2

 

70.0

 

2.6

Sovereign

BBB

15.0

0.3

15.0

2.0

Total credit default swap protection sold

$

90.0

$

0.5

$

90.0

 

2.4

December 31, 2018

 

 

Weighted

Maximum

average

Notional

Fair

future

expected life

    

amount

    

value

    

payments

    

(in years)

(in millions)

Single name credit default swaps

Corporate debt

AAA

$

10.0

$

0.1

$

10.0

 

0.7

A

 

15.0

 

0.1

 

15.0

 

1.0

BBB

 

190.0

 

0.4

 

190.0

 

1.7

BB

 

10.0

 

 

10.0

 

0.5

CCC

15.0

(3.6)

15.0

0.9

Government/municipalities

AA

20.0

0.2

20.0

1.0

Sovereign

A

10.0

0.1

10.0

0.7

BBB

55.0

0.4

55.0

1.3

Total credit default swap protection sold

$

325.0

$

(2.3)

$

325.0

 

1.4

Fair Value Hedges (Table)

Cumulative amount of fair

value hedging basis adjustment

Line item in the consolidated statements

included in the amortized cost

of financial position in which the

Amortized cost of hedged item

of the hedged item

hedged item is included

    

December 31, 2019

    

December 31, 2018

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Fixed maturities, available-for-sale:

Active hedging relationships

$

142.0

$

137.0

$

18.1

$

12.4

Discontinued hedging relationships

159.3

298.9

7.7

13.3

Total fixed maturities, available-for-sale in active or discontinued hedging relationships

$

301.3

$

435.9

$

25.8

$

25.7

Cash Flow Hedges (Table)

Amount of gain (loss) recognized in AOCI on derivatives

Derivatives in cash flow

for the year ended December 31,

hedging relationships

     

Related hedged item

     

2019

     

2018

     

2017

   

(in millions)

Interest rate contracts

Fixed maturities, available-for-sale

$

(9.9)

$

36.7

$

(51.7)

Foreign exchange contracts

Fixed maturities, available-for-sale

(9.4)

 

20.8

 

(68.5)

Foreign exchange contracts

Investment contracts

 

(0.1)

 

Total

$

(19.3)

$

57.4

$

(120.2)

Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations (Table)

For the year ended December 31, 2019

 

Benefits,

 

Net investment

Net realized

claims and

 

income related

capital gains

settlement

 

to hedges

(losses) related to

expenses

 

of fixed

hedges of fixed

related to

Operating

 

maturities,

maturities,

hedges of

expenses

 

available-

available-

investment

related to

 

    

for-sale

    

for-sale

    

contracts

    

hedges of debt

  

(in millions)

 

Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported

$

3,998.4

$

(52.8)

$

9,905.8

$

4,503.9

 

  

 

  

Losses on fair value hedging relationships:

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

Gain recognized on hedged item

$

5.7

$

$

$

Loss recognized on derivatives

 

(6.0)

 

 

 

Amortization of hedged item basis adjustments

 

(4.2)

 

 

 

Amounts related to periodic settlements on derivatives

 

(3.4)

 

 

 

Total loss recognized for fair value hedging relationships

$

(7.9)

$

$

$

Gains (losses) on cash flow hedging relationships:

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

Gain (loss) reclassified from AOCI on derivatives

$

19.8

$

(0.6)

$

(0.1)

$

(4.8)

Gain reclassified from AOCI into net income as a result that a forecasted transaction is no longer probable of occurring

 

 

0.1

 

 

Foreign exchange contracts:

 

  

 

  

 

  

Gain reclassified from AOCI on derivatives

 

 

9.5

 

 

Amounts related to periodic settlements on derivatives

 

7.4

 

 

 

Total gain (loss) recognized for cash flow hedging relationships

$

27.2

$

9.0

$

(0.1)

$

(4.8)

5. Derivative Financial Instruments – (continued)

For the year ended December 31, 2018

 

Benefits,

 

Net investment

Net realized

claims and

 

income related

capital gains

settlement

 

to hedges

(losses) related to

expenses

 

of fixed

hedges of fixed

related to

Operating

 

maturities,

maturities,

hedges of

expenses

 

available-

available-

investment

related to

 

    

for-sale

    

for-sale

    

contracts

    

hedges of debt

  

(in millions)

 

Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported

$

3,629.2

$

(75.4)

$

8,192.5

$

4,136.7

 

  

 

  

Losses on fair value hedging relationships:

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

Loss recognized on hedged item

$

$

(6.6)

$

$

Gain recognized on derivatives

 

 

6.2

 

 

Amortization of hedged item basis adjustments

 

(6.7)

 

 

 

Amounts related to periodic settlements on derivatives

 

(5.9)

 

 

 

Total loss recognized for fair value hedging relationships

$

(12.6)

$

(0.4)

$

$

Gains (losses) on cash flow hedging relationships:

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

Gain (loss) reclassified from AOCI on derivatives

$

20.9

$

17.0

$

(0.1)

$

(10.7)

Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring

 

 

0.3

 

 

Foreign exchange contracts:

 

  

 

  

 

  

Gain reclassified from AOCI on derivatives

 

 

12.7

 

 

Amounts related to periodic settlements on derivatives

 

6.0

 

 

(0.1)

 

Total gain (loss) recognized for cash flow hedging relationships

$

26.9

$

30.0

$

(0.2)

$

(10.7)

5. Derivative Financial Instruments – (continued)

For the year ended December 31, 2017

 

Net

 

investment

Benefits,

 

income

Net realized capital gains (losses)

claims and

 

related

Related to

settlement

 

to hedges

hedges

expenses

Operating

 

of fixed

fixed

Related to

related to

expenses

 

maturities,

maturities,

hedges of

hedges of

related to

 

available-

available-

investment

investment

hedges

 

    

for-sale

    

for-sale

    

contracts

    

Total

    

contracts

    

of debt

  

(in millions)

 

Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported

$

3,459.3

$

524.2

$

7,822.6

$

3,893.8

Gains (losses) on fair value hedging relationships:

 

  

 

  

 

  

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

 

  

 

  

 

  

Gain (loss) recognized on hedged item

$

$

(5.2)

$

0.6

$

(4.6)

$

$

Gain (loss) recognized on derivatives

 

 

4.7

 

(0.6)

 

4.1

 

 

Amortization of hedged item basis adjustments

 

(11.6)

 

 

 

 

(0.5)

 

Amounts related to periodic settlements on derivatives

 

(10.3)

 

 

 

 

0.9

 

Total gain (loss) recognized for fair value hedging relationships

$

(21.9)

$

(0.5)

$

$

(0.5)

$

0.4

$

Gains (losses) on cash flow hedging relationships:

 

  

 

  

 

  

 

  

 

  

 

  

Interest rate contracts:

 

  

 

  

 

  

 

  

 

  

 

  

Gain (loss) reclassified from AOCI on derivatives

$

21.0

$

(0.6)

$

$

(0.6)

$

$

(10.8)

Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring

 

 

0.2

 

 

0.2

 

 

Foreign exchange contracts:

 

  

 

  

 

  

 

  

 

  

 

  

Gain reclassified from AOCI on derivatives

 

 

22.0

 

 

22.0

 

 

Amounts related to periodic settlements on derivatives

 

7.1

 

 

 

 

(1.1)

 

Total gain (loss) recognized for cash flow hedging relationships

$

28.1

$

21.6

$

$

21.6

$

(1.1)

$

(10.8)

Derivatives Not Designated as Hedging Instruments (Table)

Amount of gain (loss) recognized in

net income on derivatives for the

year ended December 31, 

Derivatives not designated as hedging instruments

     

2019

     

2018

     

2017

  

(in millions)

Interest rate contracts

$

218.0

$

(27.6)

$

(26.9)

Foreign exchange contracts

(58.6)

 

(64.2)

 

59.4

Equity contracts

(132.9)

 

(31.0)

 

(181.3)

Credit contracts

(3.6)

 

(1.6)

 

(15.9)

Other contracts

(168.1)

 

108.5

 

11.5

Total

$

(145.2)

$

(15.9)

$

(153.2)

v3.19.3.a.u2
Closed Block (Tables)
12 Months Ended
Dec. 31, 2019
Closed Block  
Closed Block Liabilities and Assets Designated to the Closed Block (Table)

     

December 31, 2019

     

December 31, 2018

  

(in millions)

 

Closed Block liabilities

Future policy benefits and claims

$

3,563.1

$

3,732.5

Other policyholder funds

6.6

 

6.5

Policyholder dividends payable

199.1

 

211.3

Policyholder dividends obligation

202.7

 

36.6

Other liabilities

7.8

 

9.5

Total Closed Block liabilities

3,979.3

 

3,996.4

Assets designated to the Closed Block

Fixed maturities, available-for-sale

2,269.6

 

2,176.4

Fixed maturities, trading

2.6

 

2.5

Equity securities

1.1

 

1.0

Mortgage loans

622.8

 

678.5

Policy loans

486.0

 

510.5

Other investments

46.4

 

33.8

Total investments

3,428.5

 

3,402.7

Cash and cash equivalents

47.5

 

42.1

Accrued investment income

38.1

 

39.5

Premiums due and other receivables

9.7

 

10.0

Deferred tax asset

29.5

 

30.5

Total assets designated to the Closed Block

3,553.3

 

3,524.8

Excess of Closed Block liabilities over assets designated to the Closed Block

426.0

 

471.6

Amounts included in accumulated other comprehensive income

0.9

 

5.2

Maximum future earnings to be recognized from Closed Block assets and liabilities

$

426.9

$

476.8

Closed Block Revenues and Expenses (Table)

For the year ended December 31, 

     

2019

     

2018

     

2017

  

(in millions)

Revenues

Premiums and other considerations

$

227.6

$

244.2

$

275.6

Net investment income

154.4

 

160.5

 

169.4

Net realized capital gains (losses)

7.4

 

(3.4)

 

(5.8)

Total revenues

389.4

 

401.3

 

439.2

Expenses

Benefits, claims and settlement expenses

204.4

 

211.5

 

245.6

Dividends to policyholders

116.3

 

120.9

 

122.0

Operating expenses

2.9

 

3.3

 

3.5

Total expenses

323.6

 

335.7

 

371.1

Closed Block revenues, net of Closed Block expenses, before income taxes

65.8

 

65.6

 

68.1

Income taxes

12.9

 

11.1

 

46.0

Closed Block revenues, net of Closed Block expenses and income taxes

52.9

 

54.5

 

22.1

Funding adjustments

(3.0)

 

(0.5)

 

(4.4)

Closed Block revenues, net of Closed Block expenses, income taxes and funding adjustments

$

49.9

$

54.0

$

17.7

Change in Maximum Future Earnings of the Closed Block (Table)

For the year ended December 31, 

     

2019

     

2018

     

2017

  

(in millions)

Beginning of year

$

476.8

$

532.1

$

549.8

Effects of implementation of accounting changes (1)

1.3

End of year

426.9

 

476.8

 

532.1

Change in maximum future earnings

$

(49.9)

$

(54.0)

$

(17.7)

(1)Includes the effects of implementation of accounting changes related to equity investments and the reclassification of certain tax effects.
v3.19.3.a.u2
Deferred Acquisition Costs (Tables)
12 Months Ended
Dec. 31, 2019
Deferred Acquisition Costs  
Deferred Acquisition Costs Rollforward (Table)

For the year ended December 31, 

     

2019

     

2018

     

2017

  

(in millions)

Balance at beginning of year

$

3,693.5

$

3,540.7

$

3,380.2

Costs deferred during the year

473.5

 

414.9

 

421.8

Amortized to expense during the year (1)

(347.0)

 

(253.5)

 

(234.6)

Adjustment related to unrealized (gains) losses on available-for-sale securities and derivative instruments

(298.7)

 

184.9

 

(26.7)

Other (2)

(193.5)

Balance at end of year

$

3,521.3

$

3,693.5

$

3,540.7

(1)Includes adjustments for revisions to EGPs.
(2)Reflects the impact of capitalized costs written off or transferred from DAC to a contract cost asset as a result of adopting revenue recognition guidance in 2018. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Recent Accounting Pronouncements” for further details.
v3.19.3.a.u2
Insurance Liabilities (Tables)
12 Months Ended
Dec. 31, 2019
Contractholder Funds (Table)

December 31, 

 

    

2019

    

2018

  

(in millions)

 

Liabilities for investment contracts:

Liabilities for individual annuities

$

13,457.5

$

12,913.9

GICs

10,423.5

 

10,321.7

Funding agreements

8,640.6

 

7,729.5

Other investment contracts

1,596.7

 

1,652.2

Total liabilities for investment contracts

34,118.3

 

32,617.3

Universal life and other reserves

7,249.2

 

7,082.4

Total contractholder funds

$

41,367.5

$

39,699.7

Liability for Unpaid Claims (Table)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

  

(in millions)

 

Balance at beginning of year

$

2,252.7

$

2,130.5

$

2,001.3

Less: reinsurance recoverable

404.3

375.8

340.3

Net balance at beginning of year

1,848.4

1,754.7

1,661.0

Incurred:

Current year

1,361.3

 

1,268.8

 

1,196.6

Prior years

0.8

 

0.3

 

18.2

Total incurred

1,362.1

 

1,269.1

 

1,214.8

Payments:

Current year

869.4

 

815.7

 

767.2

Prior years

379.4

 

359.7

 

353.9

Total payments

1,248.8

 

1,175.4

 

1,121.1

Net balance at end of year

1,961.7

1,848.4

1,754.7

Plus: reinsurance recoverable

403.8

404.3

375.8

Balance at end of year

$

2,365.5

$

2,252.7

$

2,130.5

Amounts not included in the rollforward above:

Claim adjustment expense liabilities

$

57.9

$

54.6

$

50.7

Reconciliation of unpaid claims to liability for unpaid claims (Table)

December 31, 2019

Dental, Vision, STD,

LTD and Group Life

Critical Illness and

    

Waiver

    

Accident

    

Group Life

    

Consolidated

  

(in millions)

Net outstanding liabilities for unpaid claims

$

1,188.5

$

71.2

$

49.5

$

1,309.2

Reconciling items:

Reinsurance recoverable on unpaid claims

56.4

0.9

57.3

Impact of discounting

(215.0)

(215.0)

Liability for unpaid claims - short-duration contracts

$

1,029.9

$

71.2

$

50.4

1,151.5

Insurance contracts other than short-duration

1,214.0

Liability for unpaid claims

$

2,365.5

Claim Duration and Payout (Table)

December 31, 2019 (1)

Dental, Vision, STD,

LTD and Group Life

Critical Illness and

Group

Year

    

Waiver

    

Accident

    

Life

1

7.6

%  

91.7

%  

81.7

%

2

24.2

8.0

17.0

3

14.9

4

8.1

5

5.6

6

5.3

7

4.2

8

3.9

9

3.5

10

3.1

(1)Unaudited.
Discounting (Table)

  

Dental, Vision, STD,

  

LTD and Group Life

Critical Illness and

 

    

Waiver

 

Accident

Group Life

($ in millions)

Carrying amount of liabilities for unpaid claims

    

    

    

December 31, 2019

$

1,029.9

$

71.2

$

50.4

December 31, 2018

1,020.0

59.3

49.7

Range of discount rates

December 31, 2019

3.3

-

7.0

%

-

%

-

%

December 31, 2018

3.3

-

7.0

-

-

Aggregate amount of discount

December 31, 2019

$

215.0

$

$

December 31, 2018

217.7

Interest accretion

For the year ended:

December 31, 2019

$

34.2

$

$

December 31, 2018

34.5

December 31, 2017

35.0

Long-Term Disability/Group Life Waiver  
Claims Development (Table)

Incurred

Cumulative

but not

number of

reported

reported

Net incurred claims (1)

claims

claims

December 31, 

   

2010

   

2011

   

2012

   

2013

   

2014

   

2015

   

2016

   

2017

   

2018

   

2019

   

2019

  

  

2019

($ in millions)

Incurral year

2010

$

184.1

$

176.7

$

176.2

$

172.0

$

162.7

$

155.7

$

154.1

$

153.4

$

152.1

$

151.8

$

0.1

5,649

2011

203.7

192.6

185.4

184.8

178.4

172.3

169.6

167.6

166.5

0.1

6,290

2012

217.9

200.0

191.1

189.5

181.8

174.8

173.3

171.9

0.1

6,444

2013

219.3

203.3

188.4

190.7

182.3

179.5

177.1

0.1

7,050

2014

242.2

231.4

214.4

218.1

206.2

201.9

0.1

7,596

2015

231.0

227.2

217.2

215.3

208.2

0.1

7,174

2016

229.8

228.4

219.4

219.5

5.4

6,161

2017

238.4

239.7

243.1

8.0

6,053

2018

239.4

245.1

3.8

5,668

2019

255.2

104.6

3,472

Total net incurred claims

$

2,040.3

    Net cumulative paid claims (1)

        

          

December 31, 

  

  

   

2010

   

2011

   

2012

   

2013

   

2014

   

2015

   

2016

   

2017

   

2018

   

2019

   

(in millions)

Incurral year

2010

$

10.4

$

46.5

$

67.1

$

78.4

$

85.9

$

94.2

$

100.9

$

107.2

$

112.1

$

116.7

                 

                  

2011

11.2

50.0

72.5

85.7

95.4

105.2

112.6

119.3

125.4

2012

13.8

55.1

80.8

93.7

104.6

112.9

120.0

126.1

2013

12.5

55.0

81.4

97.0

106.4

116.4

123.2

2014

16.1

66.0

96.3

111.8

122.3

132.4

2015

16.9

67.0

98.0

114.6

126.8

2016

16.2

70.6

105.6

124.9

2017

17.8

76.5

115.0

2018

20.1

79.9

2019

19.2

Total net paid claims

1,089.6

All outstanding liabilities for unpaid claims prior to 2010 net of reinsurance

237.8

Total outstanding liabilities for unpaid claims net of reinsurance

$

1,188.5

(1)2010-2018 unaudited.
Dental/Vision/Short-Term Disability/Critical Illness/Accident  
Claims Development (Table)

Incurred

Cumulative

but not

number of

reported

reported

Net incurred claims (1)

claims

claims

December 31, 

    

2018

    

2019

    

2019

    

2019

  

($ in millions)

Incurral year

2018

$

648.3

$

640.0

$

3,032,617

2019

724.7

45.0

3,184,519

Total net incurred claims

$

1,364.7

Net cumulative

paid claims (1)

December 31, 

2018

    

2019

    

    

(in millions)

Incurral year

2018

$

589.1

$

640.0

2019

653.5

Total net paid claims

1,293.5

All outstanding liabilities for unpaid claims prior to 2018 net of reinsurance

Total outstanding liabilities for unpaid claims net of reinsurance

$

71.2

(1)2018 unaudited.
Group Life  
Claims Development (Table)

Incurred

Cumulative

but not

number of

reported

reported

Net incurred claims (1)

claims

claims

December 31, 

    

2018

    

2019

    

2019

    

2019

  

($ in millions)

Incurral year

2018

$

239.6

$

238.4

$

0.7

5,220

2019

228.3

23.0

4,625

Total net incurred claims

$

466.7

Net cumulative

paid claims (1)

December 31, 

    

2018

    

2019

    

    

(in millions)

Incurral year

2018

$

193.9

$

236.5

2019

181.7

Total net paid claims

418.2

All outstanding liabilities for unpaid claims prior to 2018 net of reinsurance

1.0

Total outstanding liabilities for unpaid claims net of reinsurance

$

49.5

(1)2018 unaudited.
v3.19.3.a.u2
Debt (Tables)
12 Months Ended
Dec. 31, 2019
Debt  
Short-Term Debt (Table)

December 31, 2019

 

Financing

Short-term debt

 

Obligor/Applicant

    

structure

    

Maturity

    

Capacity

    

outstanding

  

(in millions)

 

PFG, Principal Financial Services, Inc. ("PFS"),

Principal Life as co-borrowers

 

Credit facility

 

November 2023

$

600.0

$

PFG, PFS, Principal Life and Principal Financial

 

  

 

  

 

  

 

Services V (UK) LTD as co-borrowers

 

Credit facility

 

November 2023

 

200.0

 

Principal International Chile (1)

 

Unsecured lines of credit

 

  

 

134.5

 

93.4

Principal Life

 

Unsecured line of credit

September 2020

 

60.0

 

Total

 

  

 

  

$

994.5

$

93.4

December 31, 2018

 

Financing

Short-term debt

 

Obligor/Applicant

    

structure

    

Maturity

    

Capacity

    

outstanding

  

(in millions)

 

PFG, PFS, Principal Life as co-borrowers

 

Credit facility

 

November 2023

$

600.0

$

PFG, PFS, Principal Life and Principal Financial

 

  

 

  

 

  

 

  

Services V (UK) LTD as co-borrowers

 

Credit facility

 

November 2023

 

200.0

 

Principal International Chile (1)

 

Unsecured lines of credit

 

141.4

 

42.9

Principal Life

 

Unsecured line of credit

September 2019

 

60.0

 

Total

$

1,001.4

$

42.9

(1)The unsecured lines of credit can be used for repurchase agreements or other borrowings. Each line has a maturity of less than one year.
Long-Term Debt (Table)

December 31, 2019

 

    

Principal

    

Net unamortized
discount,
premium and
debt issuance
costs

    

Carrying
amount

  

(in millions)

 

3.3% notes payable, due 2022

$

300.0

$

(1.0)

$

299.0

3.125% notes payable, due 2023

300.0

(1.0)

 

299.0

3.4% notes payable, due 2025

400.0

(2.6)

 

397.4

3.1% notes payable, due 2026

350.0

(2.5)

347.5

3.7% notes payable, due 2029

500.0

(6.1)

493.9

6.05% notes payable, due 2036

505.6

(2.4)

 

503.2

4.625% notes payable, due 2042

300.0

(3.2)

 

296.8

4.35% notes payable, due 2043

300.0

(3.3)

 

296.7

4.3% notes payable, due 2046

300.0

(3.3)

296.7

4.7% notes payable, due 2055

400.0

(4.9)

 

395.1

Non-recourse mortgages and notes payable

 

107.6

 

1.2

 

108.8

Total long-term debt

$

3,763.2

$

(29.1)

$

3,734.1

December 31, 2018

    

Principal

    

Net unamortized
discount,
premium and
debt issuance
costs

    

Carrying
amount

  

(in millions)

3.3% notes payable, due 2022

$

300.0

$

(1.5)

$

298.5

3.125% notes payable, due 2023

300.0

(1.2)

298.8

3.4% notes payable, due 2025

400.0

(3.0)

 

397.0

3.1% notes payable, due 2026

350.0

(2.7)

347.3

6.05% notes payable, due 2036

505.6

(2.6)

 

503.0

4.625% notes payable, due 2042

300.0

(3.3)

 

296.7

4.35% notes payable, due 2043

300.0

(3.3)

296.7

4.3% notes payable, due 2046

300.0

(3.3)

296.7

4.7% notes payable, due 2055

400.0

(4.9)

 

395.1

Non-recourse mortgages and notes payable

128.5

1.3

 

129.8

Total long-term debt

$

3,284.1

$

(24.5)

$

3,259.6

Future Annual Maturities of Long-Term Debt (Table)

9. Debt – (continued)

As of December 31, 2019, future annual maturities of long-term debt were as follows (in millions):

Year ending December 31:

    

    

  

2020

$

65.9

2021

1.8

2022

300.7

2023

314.0

2024

17.5

Thereafter

3,034.2

Total future maturities of long-term debt

$

3,734.1

v3.19.3.a.u2
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Taxes  
Income Tax Expense (Benefit) from Continuing Operations (Table)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

  

(in millions)

 

Current income taxes (benefits):

U.S. federal

$

31.9

$

(48.9)

$

(4.4)

State

18.1

 

10.3

 

48.9

Foreign

45.6

 

51.7

 

38.1

Tax benefit of operating loss carryforward

(3.0)

 

(13.5)

 

(21.5)

Total current income taxes (benefits)

92.6

 

(0.4)

 

61.1

Deferred income taxes (benefits):

U.S. federal

108.6

 

224.3

 

(208.2)

State

6.9

 

19.2

 

42.5

Foreign

41.1

 

(12.4)

 

32.3

Total deferred income taxes (benefits)

156.6

 

231.1

 

(133.4)

Income taxes (benefits)

$

249.2

$

230.7

$

(72.3)

Income Before Income Taxes, Domestic and Foreign (Table)

For the year ended December 31,

    

2019

    

2018

    

2017

  

(in millions)

Domestic

 

$

1,365.1

 

$

1,658.1

 

$

1,848.5

Foreign

328.2

126.3

403.7

Total income before income taxes

 

$

1,693.3

 

$

1,784.4

 

$

2,252.2

Reconciliation Between U.S. Corporate Income Tax Rate and Effective Income Tax Rate from Continuing Operations (Table)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

 

U.S. corporate income tax rate

 

21

%  

21

%  

35

%

Dividends received deduction

(5)

(4)

(8)

Tax credits

(3)

(3)

(2)

Impact of equity method presentation

(2)

(1)

(2)

Impact of the Tax Cuts and Jobs Act

(3)

(25)

Interest exclusion from taxable income

(1)

(1)

State income taxes

1

1

2

Local country permanent tax adjustments

1

1

Other

2

2

(2)

Effective income tax rate

15

%  

13

%  

(3)

%

Changes in Unrecognized Tax Benefits (Table)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

  

(in millions)

 

Balance at beginning of period

$

42.1

$

194.1

$

207.8

Additions based on tax positions related to the current year

0.1

 

0.8

 

7.2

Additions for tax positions of prior years

23.1

 

43.7

 

20.2

Reductions for tax positions related to the current year

(3.2)

 

(10.6)

 

(3.3)

Reductions for tax positions of prior years

(0.5)

 

(23.2)

 

(1.1)

Settlements

(162.7)

(36.7)

Balance at end of period (1)

$

61.6

$

42.1

$

194.1

(1)If recognized, $4.4 million of the above amount of unrecognized tax benefits would reduce our 2019 effective income tax rate. We recognize interest and penalties related to uncertain tax positions in operating expenses within the consolidated statements of operations.
Components of Net Deferred Income Taxes (Table)

December 31, 

 

    

2019

    

2018

  

(in millions)

 

Deferred income tax assets:

Investments, including derivatives

$

237.0

$

165.6

Insurance liabilities

143.2

 

Net operating and capital loss carryforwards

71.1

 

80.8

Tax credit carryforwards

106.0

163.3

Employee benefits

338.9

 

327.3

Foreign currency translation

14.0

28.1

Other deferred income tax assets

45.2

 

33.8

Gross deferred income tax assets

955.4

 

798.9

Valuation allowance

(16.7)

 

(17.0)

Total deferred income tax assets

938.7

 

781.9

Deferred income tax liabilities:

Deferred acquisition costs

(562.9)

 

(615.8)

Investments, including derivatives

(443.7)

 

(298.1)

Net unrealized gains on available-for-sale securities

(1,039.9)

 

(98.1)

Real estate

(147.9)

 

(144.9)

Intangible assets

(342.3)

 

(310.0)

Insurance liabilities

(60.2)

Other deferred income tax liabilities

(75.0)

 

(71.9)

Total deferred income tax liabilities

(2,611.7)

 

(1,599.0)

Total net deferred income tax liabilities

$

(1,673.0)

$

(817.1)

Net Deferred Income Taxes by Jurisdiction (Table)

December 31, 

 

    

2019

    

2018

  

(in millions)

 

Deferred income tax assets:

State

$

94.9

$

108.2

Foreign

28.7

33.1

Net deferred income tax assets

123.6

 

141.3

Deferred income tax liabilities:

U.S. federal

(1,507.6)

 

(708.2)

Foreign

(289.0)

 

(250.2)

Net deferred income tax liabilities

(1,796.6)

 

(958.4)

Total net deferred income tax liabilities

$

(1,673.0)

$

(817.1)

v3.19.3.a.u2
Employee and Agent Benefits (Tables)
12 Months Ended
Dec. 31, 2019
Defined Benefit Plans and Other Postretirement Benefit Plans  
Obligations and Funded Status (Table)

Other postretirement

 

Pension benefits

benefits

 

December 31, 

December 31, 

 

    

2019

    

2018

    

2019

    

2018

 

(in millions)

 

Change in benefit obligation

    

Benefit obligation at beginning of year

$

(3,239.2)

$

(3,383.6)

$

(98.9)

$

(109.1)

Service cost

(66.0)

 

(73.0)

 

(0.1)

Interest cost

(126.5)

 

(119.5)

(3.7)

 

(3.5)

Actuarial gain (loss)

(506.4)

 

220.9

(4.8)

 

7.9

Participant contributions

 

(4.4)

 

(3.7)

Benefits paid

123.6

 

109.6

12.2

 

9.7

Plan amendments

122.4

 

6.4

(1.8)

Other

(0.1)

Benefit obligation at end of year

$

(3,692.1)

$

(3,239.2)

$

(101.4)

$

(98.9)

Change in plan assets

Fair value of plan assets at beginning of year

$

2,498.2

$

2,542.2

$

643.9

$

696.8

Actual return on plan assets

520.9

 

(122.2)

95.5

 

(47.7)

Employer contribution

30.5

 

187.8

1.2

 

0.8

Participant contributions

 

4.4

 

3.7

Benefits paid

(123.6)

 

(109.6)

(12.2)

 

(9.7)

Fair value of plan assets at end of year

$

2,926.0

$

2,498.2

$

732.8

$

643.9

Amount recognized in statement of financial position

Other assets

$

$

$

635.1

$

546.9

Other liabilities

(766.1)

 

(741.0)

(3.7)

 

(1.9)

Total

$

(766.1)

$

(741.0)

$

631.4

$

545.0

Amount recognized in accumulated other comprehensive (income) loss

Total net actuarial (gain) loss

$

737.5

$

673.3

$

(17.4)

$

40.2

Prior service benefit

(137.8)

 

(26.7)

(7.3)

 

(10.2)

Pre-tax accumulated other comprehensive (income) loss

$

599.7

$

646.6

$

(24.7)

$

30.0

Components of Net Periodic Benefit Cost (Income) (Table)

Pension benefits

Other postretirement benefits

 

For the year ended December 31, 

 

    

2019

    

2018

    

2017

    

2019

    

2018

    

2017

   

(in millions)

 

Service cost

$

66.0

$

73.0

$

67.1

$

$

0.1

$

0.1

Interest cost

126.5

 

119.5

 

124.4

3.7

 

3.5

 

3.9

Expected return on plan assets

(148.8)

 

(157.0)

 

(144.2)

(33.2)

 

(33.6)

 

(27.5)

Amortization of prior service benefit

(11.3)

 

(3.4)

 

(2.3)

(1.2)

 

(13.9)

 

(34.6)

Recognized net actuarial (gain) loss

70.1

 

67.8

 

68.0

0.1

 

(1.5)

 

Net periodic benefit cost (income)

$

102.5

$

99.9

$

113.0

$

(30.6)

$

(45.4)

$

(58.1)

Amounts Recognized in Net Periodic Benefit Cost and Accumulated Other Comprehensive (Income) Loss (Table)

Pension

Other postretirement

 

benefits

benefits

 

For the year ended December 31, 

 

    

2019

    

2018

    

2019

    

2018

 

(in millions)

 

Other changes recognized in accumulated other comprehensive (income) loss

Net actuarial (gain) loss

$

134.3

$

58.3

$

(57.5)

$

73.4

Prior service (benefit) cost

(122.4)

(6.4)

1.7

Amortization of gain (loss)

(70.1)

 

(67.8)

(0.1)

 

1.5

Amortization of prior service benefit

11.3

 

3.4

1.2

 

13.9

Total recognized in pre-tax accumulated other comprehensive (income) loss

$

(46.9)

$

(12.5)

$

(54.7)

$

88.8

Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss

$

55.6

$

87.4

$

(85.3)

$

43.4

Weighted-Average Assumptions Used to Determine Benefit Obligations (Table)

Pension benefits

For the year ended December 31, 

     

2019

     

2018

Discount rate

3.25

%  

4.15

%

Rate of compensation increase:

Cash balance benefit

4.95

%  

4.94

%

Traditional benefit

2.98

%  

2.73

%

Other postretirement benefits

For the year ended December 31, 

    

2019

    

2018

Discount rate

2.95

%  

3.95

%

Rate of compensation increase

N/A

N/A

Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost (Table)

Pension benefits

For the year ended December 31, 

    

2019

    

2018

    

2017

Discount rate (1)

3.70

%  

3.60

%  

4.15

%

Expected long-term return on plan assets

5.95

%  

6.30

%  

6.70

%

Rate of compensation increase:

Cash balance benefit

4.94

%  

4.96

%  

5.02

%

Traditional benefit

2.73

%  

2.77

%  

2.82

%

Other postretirement benefits

For the year ended December 31, 

    

2019

    

2018

    

2017

Discount rate

3.95

%  

3.35

%  

3.75

%

Expected long-term return on plan assets

5.19

%  

4.85

%  

4.40

%

Rate of compensation increase

N/A

2.39

%  

2.44

%

(1)During the second quarter of 2019, we amended The Principal Pension Plan and The Principal Financial Group Nonqualified Defined Benefit Plan for Employees to end traditional benefit accruals as of December 31, 2022, and begin cash balance accruals January 1, 2023. We remeasured the associated plan assets and pension benefit obligations as of May 31, 2019. A discount rate of 4.15% was used until the remeasurement date at which time a discount rate of 3.70% was used. See "Pension Plan Changes and Plan Gains/Losses" for further details.
Assumed Health Care Cost Trend Rates (Table)

December 31, 

 

   

2019

    

2018

Health care cost trend rate assumed for next year under age 65

6.75

%  

7.00

%

Health care cost trend rate assumed for next year age 65 and over

6.00

%  

6.00

%

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)

4.50

%  

4.50

%

Year that the rate reaches the ultimate trend rate (under age 65)

2029

2026

Year that the rate reaches the ultimate trend rate (65 and older)

2026

2025

Effects of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates (Table)

  

1-percentage

1-percentage

 

    

point increase

    

point decrease

 

(in millions)

 

Effect on total of service cost and interest cost components

$

$

Effect on accumulated postretirement benefit obligation

(1.2)

1.1

Estimated Future Benefit Payments (Table)

    

Other postretirement

benefits (gross benefit

payments, including

    

Pension benefits

    

prescription drug benefits)

 

(in millions)

Year ending December 31:

2020

$

164.5

$

14.0

2021

150.1

12.2

2022

161.4

11.5

2023

170.1

10.6

2024

177.9

9.8

2025-2029

1,014.6

37.9

Defined Benefit Pension Plans Supplemental Information (Table)

For the year ended December 31, 

 

2019

2018

 

Qualified

Nonqualified

Qualified

Nonqualified

 

    

Plan

    

Plan

    

Total

    

Plan

    

Plan

    

Total

   

(in millions)

 

Amount recognized in statement of financial position

Other assets

$

$

$

$

$

$

Other liabilities

(258.7)

(507.4)

(766.1)

 

(266.3)

(474.7)

(741.0)

Total

$

(258.7)

$

(507.4)

$

(766.1)

$

(266.3)

$

(474.7)

$

(741.0)

Amount recognized in accumulated other comprehensive loss

Total net actuarial loss

$

567.6

$

169.9

$

737.5

$

544.4

$

128.9

$

673.3

Prior service benefit

(110.3)

(27.5)

(137.8)

 

(11.0)

(15.7)

(26.7)

Pre-tax accumulated other comprehensive loss

$

457.3

$

142.4

$

599.7

$

533.4

$

113.2

$

646.6

Components of net periodic benefit cost

Service cost

$

59.7

$

6.3

$

66.0

$

65.7

$

7.3

$

73.0

Interest cost

108.0

18.5

126.5

 

102.0

17.5

119.5

Expected return on plan assets

(148.8)

(148.8)

 

(157.0)

(157.0)

Amortization of prior service benefit

(7.8)

(3.5)

(11.3)

 

(1.5)

(1.9)

(3.4)

Recognized net actuarial loss

57.6

12.5

70.1

 

53.6

14.2

67.8

Net periodic benefit cost

$

68.7

$

33.8

$

102.5

$

62.8

$

37.1

$

99.9

Other changes recognized in accumulated other comprehensive (income) loss

Net actuarial (gain) loss

$

80.8

$

53.5

$

134.3

$

81.7

$

(23.4)

$

58.3

Prior service benefit

(107.2)

(15.2)

(122.4)

(6.4)

(6.4)

Amortization of net loss

(57.6)

(12.5)

(70.1)

 

(53.6)

(14.2)

(67.8)

Amortization of prior service benefit

7.8

3.5

11.3

 

1.5

1.9

3.4

Total recognized in pre-tax accumulated other comprehensive (income) loss

$

(76.2)

$

29.3

$

(46.9)

$

29.6

$

(42.1)

$

(12.5)

Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss

$

(7.5)

$

63.1

$

55.6

$

92.4

$

(5.0)

$

87.4

Pension benefits  
Defined Benefit Plans and Other Postretirement Benefit Plans  
Accumulated Benefit Obligation in Excess of Plan Assets (Table)

December 31, 

 

    

2019

    

2018

 

(in millions)

 

Projected benefit obligation

$

3,692.1

$

3,239.2

Accumulated benefit obligation

3,599.5

 

3,029.0

Fair value of plan assets

2,926.0

 

2,498.2

Fair Value of Plan Assets (Table)

December 31, 2019

Assets

Amount

Fair value hierarchy level

measured at

measured at

    

fair value

    

net asset value

    

Level 1

    

Level 2

    

Level 3

(in millions)

Asset category

Pooled separate account investments:

U.S. large cap equity portfolios (1)

$

509.7

$

$

$

509.7

$

U.S. small/mid cap equity portfolios (2)

 

90.9

 

 

90.9

 

Balanced asset portfolios (3)

 

78.5

 

 

78.5

 

International equity portfolios (4)

 

328.6

 

 

328.6

 

Real estate investment portfolios (5)

 

193.5

 

 

193.5

 

Single client separate account investments:

Fixed income securities:

U.S. government and agencies

485.9

485.9

States and political subdivisions

26.1

26.1

Corporate

1,009.1

1,009.1

Commercial mortgage-backed securities

32.7

32.7

Other debt obligations

7.1

7.1

Hedge funds (6)

129.0

129.0

Pooled separate account investment (7)

31.5

31.5

Other (8)

3.4

3.4

Total

$

2,926.0

$

129.0

$

485.9

$

2,311.1

$

December 31, 2018

 

Assets

Amount

Fair value hierarchy level

 

measured at

measured at

 

    

fair value

    

net asset value

    

Level 1

    

Level 2

    

Level 3

 

(in millions)

 

Asset category

Pooled separate account investments:

U.S. large cap equity portfolios (1)

$

387.7

$

$

$

387.7

$

U.S. small/mid cap equity portfolios (2)

 

64.4

 

 

64.4

 

Balanced asset portfolios (3)

 

116.3

 

 

116.3

 

International equity portfolios (4)

 

220.9

 

 

220.9

 

Real estate investment portfolios (5)

 

133.6

133.6

Single client separate account investments:

Fixed income securities:

U.S. government and agencies

418.8

418.8

States and political subdivisions

24.0

24.0

Corporate

934.5

934.5

Commercial mortgage-backed securities

30.7

30.7

Other debt obligations

8.0

8.0

Hedge funds (6)

124.7

124.7

Pooled separate account investment (7)

23.9

23.9

Other (8)

10.7

0.3

10.4

Total

$

2,498.2

$

124.7

$

419.1

$

1,954.4

$

(1)The portfolios invest primarily in publicly traded equity securities of large U.S. companies.
(2)The portfolios invest primarily in publicly traded equity securities of mid-sized and small U.S. companies.

11. Employee and Agent Benefits – (continued)

(3)The portfolios are a combination of underlying fixed income and equity investment options. These investment options may include balanced, asset allocation, target-date and target-risk investment options. Although typically lower risk than investment options that invest solely in equities, all investment options in this category have the potential to lose value.
(4)The portfolios invest primarily in publicly traded equity securities of non-U.S. companies.
(5)The portfolio invests primarily in U.S. commercial real estate properties through a separate account.
(6)The hedge funds have varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these hedge funds.
(7)The single client separate accounts invest in a money market pooled separate account.
(8)Includes cash and net (payables)/receivables for the single client separate accounts.
Target Asset Allocation (Table)

Asset category

    

Target allocation

Fixed income security portfolios

25

%

-

80

%

Equity portfolios

5

%

-

60

%

Real estate investment portfolios

10

%

Alternatives

5

%

Other postretirement benefits  
Defined Benefit Plans and Other Postretirement Benefit Plans  
Accumulated Benefit Obligation in Excess of Plan Assets (Table)

December 31, 

 

    

2019

    

2018

 

(in millions)

 

Accumulated postretirement benefit obligation

$

3.8

$

2.1

Fair value of plan assets

 

0.2

Fair Value of Plan Assets (Table)

December 31, 2019

Assets

Fair value hierarchy level

measured at

    

fair value

    

Level 1

    

Level 2

    

Level 3

 

(in millions)

Asset category

Cash and cash equivalents

$

0.6

$

0.6

$

$

Fixed income security portfolios:

Fixed income investment funds (1)

 

370.5

 

331.0

 

39.5

 

U.S. equity portfolios (2)

 

254.5

 

210.3

 

44.2

 

International equity portfolios (3)

 

107.2

 

88.9

 

18.3

 

Total

$

732.8

$

630.8

$

102.0

$

December 31, 2018

Assets

Fair value hierarchy level

measured at

    

fair value

    

Level 1

    

Level 2

    

Level 3

 

(in millions)

Asset category

Cash and cash equivalents

$

0.3

$

0.3

$

$

Fixed income security portfolios:

Fixed income investment funds (1)

 

203.7

 

166.2

 

37.5

 

U.S. equity portfolios (2)

 

135.8

 

101.0

 

34.8

 

International equity portfolios (3)

61.2

 

47.4

 

13.8

 

Alternative mutual fund portfolios (4)

 

235.4

235.4

Real estate mutual fund (5)

 

7.5

7.5

Total

$

643.9

$

557.8

$

86.1

$

(1)The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not limited to, corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities, U.S. Treasury securities, agency securities, asset-backed securities and collateralized mortgage obligations.
(2)The portfolios invest primarily in publicly traded equity securities of large U.S. companies.
(3)The portfolios invest primarily in publicly traded equity securities of non-U.S. companies.
(4)The portfolios invest primarily in equities, corporate bonds, foreign currencies, convertible securities and derivatives.
(5)The mutual fund invests primarily in U.S. commercial real estate properties.
Target Asset Allocation (Table)

Asset category

    

Target allocation

U.S. equity portfolios

35

%

International equity portfolios

15

%

Fixed income security portfolios

50

%

v3.19.3.a.u2
Contingencies, Guarantees, Indemnifications and Leases (Tables)
12 Months Ended
Dec. 31, 2019
Contingencies, Guarantees, Indemnifications and Leases  
Lease Assets and Liabilities (Table)

December 31, 2019

 

    

(in millions)

 

Assets

 

  

Operating lease assets (1)

$

190.0

Finance lease assets (1)

 

31.4

Total lease assets

$

221.4

Liabilities

 

  

Operating lease liabilities (2)

$

197.5

Finance lease liabilities (2)

 

31.8

Total lease liabilities

$

229.3

(1)Operating and finance lease assets are primarily reported within property and equipment on the consolidated statements of financial position.

(2)

Operating and finance lease liabilities are reported within other liabilities on the consolidated statements of financial position.

Lease Cost (Table)

    

For the year ended

 

December 31, 2019

 

(in millions)

 

Finance lease cost (1):

 

  

Amortization of right-of-use assets

$

14.6

Interest on lease liabilities

 

1.0

Operating lease cost (1)

 

55.8

Other lease cost (1) (2)

 

8.0

Sublease income (3)

 

(1.7)

Total lease cost

$

77.7

(1)

Finance, operating and other lease costs are primarily included in operating expenses on the consolidated statements of operations.

(2)

Other lease cost primarily reflects variable and short-term lease costs.

(3)

Sublease income is included in fees and other revenues on the consolidated statements of operations.

Future Payments Due by Period for Lease Obligations (Table)

   

Operating leases

   

Finance leases

   

Total

 

(in millions)

For the twelve months ending December 31:

2020

$

53.9

$

14.8

$

68.7

2021

43.7

11.7

55.4

2022

35.3

3.9

39.2

2023

25.9

1.9

27.8

2024

18.3

0.5

18.8

2025 and thereafter

51.7

0.1

51.8

Total lease payments

228.8

32.9

261.7

Less: interest

31.3

1.1

32.4

Present value of lease liabilities

$

197.5

$

31.8

$

229.3

Weighted-Average Remaining Lease Term and Weighted-Average Discount Rates (Table)

    

For the year ended

 

December 31, 2019

Weighted-average remaining lease term (in years):

 

  

Operating leases

 

6.7

Finance leases

 

2.6

Weighted-average discount rate:

 

  

Operating leases

 

3.9

%

Finance leases

 

2.7

%

v3.19.3.a.u2
Stockholders' Equity (Tables)
12 Months Ended
Dec. 31, 2019
Stockholders' Equity  
Common Stock Dividends (Table)

For the year ended December 31,

    

2019

    

2018

    

2017

 

Dividends declared per common share

$

2.18

$

2.10

$

1.87

Reconciliation of Outstanding Common Shares (Table)

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

(in millions)

 

Beginning balance

279.5

289.0

287.7

Shares issued

2.6

2.6

4.9

Treasury stock acquired

(5.5)

(12.1)

(3.6)

Ending balance

276.6

279.5

289.0

Other Comprehensive Income (Loss) (Table)

For the year ended December 31, 2019

    

Pre-Tax

    

Tax

    

After-Tax

 

(in millions)

Net unrealized gains on available-for-sale securities during the period

$

4,414.1

$

(947.0)

$

3,467.1

Reclassification adjustment for losses included in net income (1)

 

47.4

 

(9.7)

 

37.7

Adjustments for assumed changes in amortization patterns

 

(293.0)

 

61.5

 

(231.5)

Adjustments for assumed changes in policyholder liabilities

 

(847.7)

 

190.5

 

(657.2)

Net unrealized gains on available-for-sale securities

 

3,320.8

 

(704.7)

 

2,616.1

Noncredit component of impairment losses on fixed maturities, available-for-sale during the period

 

5.2

(1.1)

4.1

Adjustments for assumed changes in amortization patterns

 

(1.4)

0.3

(1.1)

Noncredit component of impairment losses on fixed maturities, available-for-sale (2)

 

3.8

(0.8)

3.0

Net unrealized losses on derivative instruments during the period

 

(0.5)

(0.5)

Reclassification adjustment for gains included in net income (3)

 

(23.9)

4.9

(19.0)

Adjustments for assumed changes in amortization patterns

 

3.1

(0.6)

2.5

Adjustments for assumed changes in policyholder liabilities

 

7.9

(1.9)

6.0

Net unrealized losses on derivative instruments

 

(13.4)

2.4

(11.0)

Foreign currency translation adjustment during the period

(112.3)

7.5

(104.8)

Reclassification adjustment for losses included in net income (4)

26.1

26.1

Foreign currency translation adjustment

 

(86.2)

7.5

(78.7)

Unrecognized postretirement benefit obligation during the period

 

43.6

(8.6)

35.0

Amortization of amounts included in net periodic benefit cost (5)

 

57.7

(15.4)

42.3

Net unrecognized postretirement benefit obligation

 

101.3

(24.0)

77.3

Other comprehensive income

$

3,326.3

$

(719.6)

$

2,606.7

13. Stockholders' Equity – (continued)

For the year ended December 31, 2018

    

Pre-Tax

    

Tax

    

After-Tax

 

(in millions)

Net unrealized losses on available-for-sale securities during the period

$

(2,517.5)

$

515.4

$

(2,002.1)

Reclassification adjustment for losses included in net income (1)

 

56.4

 

(5.3)

 

51.1

Adjustments for assumed changes in amortization patterns

 

185.9

 

(39.1)

 

146.8

Adjustments for assumed changes in policyholder liabilities

 

346.9

 

(72.3)

 

274.6

Net unrealized losses on available-for-sale securities

 

(1,928.3)

 

398.7

 

(1,529.6)

Noncredit component of impairment losses on fixed maturities, available-for-sale during the period

 

39.7

(8.4)

31.3

Adjustments for assumed changes in amortization patterns

 

(5.3)

1.1

(4.2)

Adjustments for assumed changes in policyholder liabilities

(0.8)

0.1

(0.7)

Noncredit component of impairment losses on fixed maturities, available-for-sale (2)

 

33.6

(7.2)

26.4

Net unrealized gains on derivative instruments during the period

 

50.4

(3.4)

47.0

Reclassification adjustment for gains included in net income (3)

 

(40.1)

4.2

(35.9)

Adjustments for assumed changes in amortization patterns

 

0.3

(0.1)

0.2

Adjustments for assumed changes in policyholder liabilities

 

5.7

(1.0)

4.7

Net unrealized gains on derivative instruments

 

16.3

(0.3)

16.0

Foreign currency translation adjustment

 

(303.9)

16.3

(287.6)

Unrecognized postretirement benefit obligation during the period

 

(125.3)

29.4

(95.9)

Amortization of amounts included in net periodic benefit cost (5)

 

49.0

(14.0)

35.0

Net unrecognized postretirement benefit obligation

 

(76.3)

15.4

(60.9)

Other comprehensive loss

$

(2,258.6)

$

422.9

$

(1,835.7)

13. Stockholders' Equity – (continued)

For the year ended December 31, 2017

    

Pre-Tax

    

Tax

    

After-Tax

 

(in millions)

Net unrealized gains on available-for-sale securities during the period

$

1,074.2

$

(341.6)

$

732.6

Reclassification adjustment for losses included in net income (1)

 

67.8

 

(23.5)

 

44.3

Adjustments for assumed changes in amortization patterns

 

(26.2)

 

9.3

 

(16.9)

Adjustments for assumed changes in policyholder liabilities

 

(184.6)

 

64.1

 

(120.5)

Net unrealized gains on available-for-sale securities

 

931.2

 

(291.7)

 

639.5

Noncredit component of impairment losses on fixed maturities, available-for-sale during the period

 

53.1

(17.0)

36.1

Adjustments for assumed changes in amortization patterns

 

(6.4)

2.3

(4.1)

Adjustments for assumed changes in policyholder liabilities

(1.3)

0.5

(0.8)

Noncredit component of impairment losses on fixed maturities, available-for-sale (2)

 

45.4

(14.2)

31.2

Net unrealized losses on derivative instruments during the period

 

(46.7)

16.0

(30.7)

Reclassification adjustment for gains included in net income (3)

 

(31.6)

10.8

(20.8)

Adjustments for assumed changes in amortization patterns

 

3.9

(1.3)

2.6

Adjustments for assumed changes in policyholder liabilities

 

9.6

(3.3)

6.3

Net unrealized losses on derivative instruments

 

(64.8)

22.2

(42.6)

Foreign currency translation adjustment during the period

 

171.6

4.7

176.3

Reclassification adjustment for losses included in net income (4)

2.6

2.6

Foreign currency translation adjustment

174.2

4.7

178.9

Unrecognized postretirement benefit obligation during the period

 

24.0

(3.8)

20.2

Amortization of amounts included in net periodic benefit cost (5)

 

31.1

(14.0)

17.1

Net unrecognized postretirement benefit obligation

 

55.1

(17.8)

37.3

Other comprehensive income

$

1,141.1

$

(296.8)

$

844.3

(1)Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations.
(2)Represents the net impact of (1) unrealized gains resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold and (2) unrealized losses resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI.
(3)See Note 5, Derivative Financial Instruments – Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations, for further details.
(4)Pre-tax reclassification adjustments primarily relate to deconsolidated sponsored investment funds and are reported in net realized capital gains (losses) on the consolidated statements of operations. For the years ended December 31, 2019 and 2017, $5.7 million and $2.0 million, respectively, of the reclassification relates to noncontrolling interest and is reported in net income attributable to noncontrolling interest on the consolidated statements of operations.
(5)Amount is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of operations. See Note 11, Employee and Agent Benefits – Components of Net Periodic Benefit Cost, for further details.
Accumulated Other Comprehensive Income (Loss) (Table)

Noncredit

Net unrealized

component of

Net unrealized

Foreign

Unrecognized

Accumulated

gains on

impairment losses

gains

currency

postretirement

other

available-for-sale

on fixed maturities

on derivative

translation

benefit

comprehensive

   

securities

   

available-for-sale

   

instruments

   

adjustment

   

obligation

   

income (loss)

   

(in millions)

Balances as of January 1, 2017

$

831.2

$

(89.5)

$

85.3

$

(1,093.8)

$

(408.4)

$

(675.2)

Other comprehensive income during the period, net of adjustments

 

595.2

 

 

(21.8)

 

174.7

 

20.2

 

768.3

Amounts reclassified from AOCI

 

44.3

 

31.2

 

(20.8)

 

0.6

 

17.1

 

72.4

Other comprehensive income

 

639.5

 

31.2

 

(42.6)

 

175.3

 

37.3

 

840.7

Balances as of December 31, 2017

1,470.7

(58.3)

42.7

(918.5)

(371.1)

165.5

Other comprehensive loss during the period, net of adjustments

 

(1,580.6)

 

 

51.9

 

(283.2)

 

(95.9)

 

(1,907.8)

Amounts reclassified from AOCI

 

51.1

 

26.4

 

(35.9)

 

 

35.0

 

76.6

Other comprehensive loss

 

(1,529.5)

26.4

16.0

(283.2)

(60.9)

(1,831.2)

Purchase of subsidiary shares from noncontrolling interest

(1.6)

(1.6)

Effects of implementation of accounting change related to equity investments, net

(1.0)

(1.0)

Effects of implementation of accounting change accounting change related to revenue recognition, net

25.6

25.6

Effects of implementation of accounting change related to the reclassification of certain tax effects, net

249.8

(15.2)

5.7

(81.8)

(80.9)

77.6

Balances as of December 31, 2018

190.0

(47.1)

64.4

(1,259.5)

(512.9)

(1,565.1)

Other comprehensive income during the period, net of adjustments

2,578.3

8.0

(102.7)

35.0

2,518.6

Amounts reclassified from AOCI

37.7

3.0

(19.0)

20.4

42.3

84.4

Other comprehensive income

2,616.0

3.0

(11.0)

(82.3)

77.3

2,603.0

Balances as of December 31, 2019

$

2,806.0

$

(44.1)

$

53.4

$

(1,341.8)

$

(435.6)

$

1,037.9

Redeemable Noncontrolling Interest (Table)

For the year ended December 31,

   

2019

   

2018

   

2017

 

(in millions)

Beginning balance

$

391.2

$

101.3

$

97.5

Net income (loss) attributable to redeemable noncontrolling interest

33.6

(2.1)

7.0

Redeemable noncontrolling interest of deconsolidated entities (1)

(505.4)

(10.6)

(61.1)

Contributions from redeemable noncontrolling interest

 

402.1

 

355.0

 

94.1

Distributions to redeemable noncontrolling interest

 

(66.3)

 

(36.8)

 

(39.0)

Purchase of subsidiary shares from redeemable noncontrolling interest

 

(1.1)

 

(7.1)

 

(4.4)

Change in redemption value of redeemable noncontrolling interest

 

5.4

 

(7.0)

 

5.9

Stock-based compensation attributable to redeemable noncontrolling interest

0.1

0.1

Other comprehensive income (loss) attributable to redeemable noncontrolling interest

 

5.3

 

(1.6)

 

1.3

Ending balance

$

264.9

$

391.2

$

101.3

(1)We deconsolidated certain sponsored investment funds as they no longer met the requirements for consolidation.
v3.19.3.a.u2
Fair Value Measurements (Tables)
12 Months Ended
Dec. 31, 2019
Fair Value Measurements  
Fair Value (Table)

December 31, 2019

Assets/

Amount

(liabilities)

measured at

Fair value hierarchy level

measured at

net asset

    

fair value

    

value (4)

    

Level 1

    

Level 2

    

Level 3

   

(in millions)

Assets

Fixed maturities, available-for-sale:

U.S. government and agencies

$

1,724.2

$

$

1,320.0

$

404.2

$

Non-U.S. governments

 

996.2

 

1.4

 

994.8

 

States and political subdivisions

 

7,490.0

 

 

7,490.0

 

Corporate

 

40,647.4

 

18.5

 

40,547.2

 

81.7

Residential mortgage-backed securities

 

2,982.4

 

 

2,982.4

 

Commercial mortgage-backed securities

 

4,850.2

 

 

4,837.3

 

12.9

Collateralized debt obligations (1)

 

3,215.3

 

 

3,016.3

 

199.0

Other debt obligations

 

8,200.5

 

 

8,109.2

 

91.3

Total fixed maturities, available-for-sale

 

70,106.2

 

1,339.9

 

68,381.4

 

384.9

Fixed maturities, trading

 

675.9

 

0.5

 

675.1

 

0.3

Equity securities

 

1,879.4

 

645.8

 

1,233.6

 

Derivative assets (2)

 

294.7

 

 

265.4

 

29.3

Other investments

 

796.0

78.3

 

335.2

 

343.5

 

39.0

Cash equivalents

 

1,299.0

 

40.9

 

1,258.1

 

Sub-total excluding separate account assets

 

75,051.2

78.3

 

2,362.3

 

72,157.1

 

453.5

Separate account assets

 

165,468.0

129.0

 

95,652.5

 

60,718.5

 

8,968.0

Total assets

$

240,519.2

$

207.3

$

98,014.8

$

132,875.6

$

9,421.5

Liabilities

Investment and universal life contracts (3)

$

(214.2)

$

$

$

$

(214.2)

Derivative liabilities (2)

(217.7)

(201.4)

(16.3)

Other liabilities (3)

 

(98.9)

 

 

(98.9)

 

Total liabilities

$

(530.8)

$

$

$

(300.3)

$

(230.5)

Net assets

$

239,988.4

$

207.3

$

98,014.8

$

132,575.3

$

9,191.0

14. Fair Value Measurements – (continued)

December 31, 2018

Assets/

Amount

(liabilities)

measured at

Fair value hierarchy level

measured at

net asset

    

fair value

    

value (4)

    

Level 1

    

Level 2

    

Level 3

   

(in millions)

Assets

Fixed maturities, available-for-sale:

U.S. government and agencies

$

1,441.0

$

$

1,027.8

$

413.2

$

Non-U.S. governments

 

890.5

 

2.7

 

883.2

 

4.6

States and political subdivisions

 

6,225.7

 

 

6,225.7

 

Corporate

 

35,539.3

 

19.2

 

35,462.2

 

57.9

Residential mortgage-backed securities

 

2,460.6

 

 

2,460.6

 

Commercial mortgage-backed securities

 

3,945.6

 

 

3,936.1

 

9.5

Collateralized debt obligations (1)

 

2,420.8

 

 

2,412.5

 

8.3

Other debt obligations

 

7,185.0

 

 

7,126.5

 

58.5

Total fixed maturities, available-for-sale

 

60,108.5

 

1,049.7

 

58,920.0

 

138.8

Fixed maturities, trading

 

636.1

 

 

636.1

 

Equity securities

 

1,843.7

 

661.2

 

1,182.5

 

Derivative assets (2)

 

194.0

 

 

175.4

 

18.6

Other investments

 

828.6

75.4

 

125.9

 

610.1

 

17.2

Cash equivalents

1,775.9

46.3

1,729.6

Sub-total excluding separate account assets

 

65,386.8

75.4

 

1,883.1

 

63,253.7

 

174.6

Separate account assets

 

144,987.9

124.6

 

79,572.0

 

56,675.8

 

8,615.5

Total assets

$

210,374.7

$

200.0

$

81,455.1

$

119,929.5

$

8,790.1

Liabilities

Investment and universal life contracts (3)

$

(45.2)

$

$

$

$

(45.2)

Derivative liabilities (2)

(157.1)

(141.6)

(15.5)

Other liabilities (3)

 

(91.5)

 

 

(91.5)

 

Total liabilities

$

(293.8)

$

$

$

(233.1)

$

(60.7)

Net assets

$

210,080.9

$

200.0

$

81,455.1

$

119,696.4

$

8,729.4

(1)Primarily consists of collateralized loan obligations backed by secured corporate loans.
(2)Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes in Level 3 Fair Value Measurements tables. Refer to Note 5, Derivative Financial Instruments, for further information on fair value by class of derivative instruments.
(3)Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported.
(4)Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $19.9 million and $32.0 million as of December 31, 2019 and December 31, 2018, respectively. Separate account assets using the NAV practical expedient consist of hedge funds with varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these hedge funds.
Reconciliation for All Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Table)

For the year ended December 31, 2019

Total realized/unrealized

gains (losses)

Changes in

Beginning

unrealized

asset/

Net

Ending

gains (losses)

(liability)

purchases,

asset/

included in

balance

Included

Included in

sales,

(liability)

net income

as of

in net

other

issuances

Transfers

Transfers

balance as of

relating to

January 1,

income

comprehensive

and

into

out of

December 31, 

positions

   

2019

   

(1)

   

income (3)

   

settlements (4)

   

Level 3

   

Level 3

   

2019

   

still held (1)

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

4.6

$

$

$

(4.6)

$

$

$

$

Corporate

 

57.9

 

 

2.5

17.2

 

4.1

 

 

81.7

 

Commercial mortgage-backed securities

 

9.5

 

(3.8)

 

3.4

2.4

 

3.7

 

(2.3)

 

12.9

 

(2.9)

Collateralized debt obligations

 

8.3

 

(2.6)

 

0.9

122.5

 

69.9

 

 

199.0

 

(2.6)

Other debt obligations

 

58.5

 

 

0.8

100.0

 

8.3

 

(76.3)

 

91.3

 

Total fixed maturities, available-for-sale

 

138.8

 

(6.4)

 

7.6

237.5

 

86.0

 

(78.6)

 

384.9

 

(5.5)

Fixed maturities, trading

0.3

0.3

Other investments

 

17.2

 

6.0

 

5.8

 

10.0

 

 

39.0

 

6.0

Separate account assets (2)

 

8,615.5

 

739.9

 

(214.2)

 

 

(173.2)

 

8,968.0

 

697.1

Liabilities

Investment and universal life contracts

 

(45.2)

 

(145.5)

 

(0.2)

(23.3)

 

 

 

(214.2)

 

(146.0)

Derivatives

 

 

 

 

 

 

Net derivative assets (liabilities)

 

3.1

 

(0.8)

 

10.7

 

 

13.0

 

5.3

For the year ended December 31, 2018

Total realized/unrealized

gains (losses)

Changes in

Beginning

unrealized

asset/

Ending

gains (losses)

(liability)

Net purchases,

asset/

included in

balance

Included in

sales,

(liability)

net income

as of

Included

other

issuances

Transfers

Transfers

balance as of

relating to

January 1,

in net

comprehensive

and

into

out of

December 31, 

positions

   

2018

   

income (1)

   

income (3)

   

settlements (4)

   

Level 3

   

Level 3

   

2018

   

still held (1)

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

7.4

$

$

(0.1)

$

(1.4)

$

$

(1.3)

$

4.6

$

Corporate

 

128.0

 

(1.0)

 

(0.1)

(15.2)

 

1.0

 

(54.8)

 

57.9

 

Commercial mortgage-backed securities

 

10.6

 

(3.5)

 

0.2

0.1

 

3.6

 

(1.5)

 

9.5

 

(1.9)

Collateralized debt obligations

 

125.0

 

(0.9)

 

0.2

66.3

 

54.7

 

(237.0)

 

8.3

 

(0.9)

Other debt obligations

 

2.3

 

 

(0.2)

147.4

 

 

(91.0)

 

58.5

 

Total fixed maturities, available-for-sale

 

273.3

 

(5.4)

 

197.2

 

59.3

 

(385.6)

 

138.8

 

(2.8)

Fixed maturities, trading

 

 

 

3.7

 

 

(3.7)

 

 

Equity securities

 

2.7

 

12.9

 

(15.6)

 

 

 

 

Other investments

 

6.5

 

1.7

 

9.0

 

 

 

17.2

 

1.7

Separate account assets (2)

 

7,651.4

 

869.5

 

(0.3)

133.7

 

2.3

 

(41.1)

 

8,615.5

 

829.8

Liabilities

Investment and universal life contracts

 

(160.3)

 

107.5

 

0.1

7.5

 

 

 

(45.2)

 

109.9

Derivatives

Net derivative assets (liabilities)

18.1

(20.2)

5.2

3.1

(18.4)

14. Fair Value Measurements – (continued)

For the year ended December 31, 2017

Total realized/unrealized

gains (losses)

Changes in

Beginning

unrealized

asset/

Ending

gains (losses)

(liability)

Net purchases,

asset/

included in

balance

Included in

sales,

(liability)

net income

as of

Included

other

issuances

Transfers

Transfers

balance as of

relating to

January 1,

in net

comprehensive

and

into

out of

December 31, 

positions

   

2017

   

income (1)

   

income (3)

   

settlements (4)

   

Level 3

   

Level 3

   

2017

   

still held (1)

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

62.1

$

(0.2)

$

(0.3)

$

(19.0)

$

$

(35.2)

$

7.4

$

(0.3)

Corporate

 

259.1

 

(2.3)

 

3.5

(29.2)

 

22.2

 

(125.3)

 

128.0

 

(0.8)

Commercial mortgage-backed securities

 

71.1

 

(12.7)

 

11.1

(0.7)

 

26.3

 

(84.5)

 

10.6

 

(4.0)

Collateralized debt obligations

 

33.6

 

 

1.7

7.3

 

183.7

 

(101.3)

 

125.0

 

Other debt obligations

 

91.5

 

 

(0.2)

(0.8)

 

0.1

 

(88.3)

 

2.3

 

Total fixed maturities, available-for-sale

 

517.4

 

(15.2)

 

15.8

(42.4)

 

232.3

 

(434.6)

 

273.3

 

(5.1)

Fixed maturities, trading

 

92.9

 

(2.4)

 

(92.4)

 

1.9

 

 

 

Equity securities, available-for-sale

 

2.7

 

 

 

 

 

2.7

 

Equity securities, trading

(0.7)

0.7

Other investments

 

36.9

 

3.9

 

(34.3)

 

 

 

6.5

 

3.8

Separate account assets (2)

 

7,354.8

 

798.1

 

(1.1)

(464.8)

 

3.1

 

(38.7)

 

7,651.4

 

696.0

Liabilities

Investment and universal life contracts

 

(176.5)

 

8.4

 

0.4

7.4

 

 

 

(160.3)

 

5.7

Other liabilities

 

(59.9)

 

(0.1)

 

60.0

 

 

 

 

Derivatives

Net derivative assets (liabilities)

11.3

3.1

3.7

18.1

4.9

(1)Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses) within the consolidated statements of operations. Realized and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market changes are reported in net investment income within the consolidated statements of operations.
(2)Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. Foreign currency translation adjustments related to the Principal International segment separate account assets are recorded in AOCI and are offset by foreign currency translation adjustments of the corresponding separate account liabilities.
(3)Includes foreign currency translation adjustments related to our Principal International segment.
(4)Gross purchases, sales, issuances and settlements were:

14. Fair Value Measurements – (continued)

For the year ended December 31, 2019

Net purchases,

sales, issuances

    

Purchases

    

Sales

    

Issuances

    

Settlements

    

and settlements

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

$

$

$

(4.6)

$

(4.6)

Corporate

 

41.9

 

(1.4)

 

 

(23.3)

 

17.2

Commercial mortgage-backed securities

 

2.4

 

 

 

 

2.4

Collateralized debt obligations

 

124.7

 

 

 

(2.2)

 

122.5

Other debt obligations

 

107.7

 

 

 

(7.7)

 

100.0

Total fixed maturities, available-for-sale

 

276.7

 

(1.4)

 

 

(37.8)

 

237.5

Fixed maturities, trading

0.5

(0.2)

0.3

Other investments

 

10.7

 

(4.9)

 

 

 

5.8

Separate account assets (5)

 

279.1

(526.4)

(280.4)

 

313.5

 

(214.2)

Liabilities

Investment and universal life contracts

 

 

 

(33.4)

 

10.1

 

(23.3)

Derivatives

Net derivative assets (liabilities)

1.9

 

8.8

 

 

 

10.7

For the year ended December 31, 2018

Net purchases,

sales, issuances

    

Purchases

    

Sales

    

Issuances

    

Settlements

    

and settlements

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

$

$

$

(1.4)

$

(1.4)

Corporate

 

12.9

 

(10.1)

 

 

(18.0)

 

(15.2)

Commercial mortgage-backed securities

 

 

 

 

0.1

 

0.1

Collateralized debt obligations

 

93.6

 

 

 

(27.3)

 

66.3

Other debt obligations

 

152.0

 

 

 

(4.6)

 

147.4

Total fixed maturities, available-for-sale

 

258.5

 

(10.1)

 

 

(51.2)

 

197.2

Fixed maturities, trading

3.7

 

 

3.7

Equity securities

 

 

(15.6)

 

 

 

(15.6)

Other investments

 

9.0

 

 

 

 

9.0

Separate account assets (5)

 

743.0

(608.4)

(206.5)

 

205.6

 

133.7

Liabilities

Investment and universal life contracts

 

 

 

2.8

 

4.7

 

7.5

Derivatives

Net derivative assets (liabilities)

1.8

 

3.4

 

 

 

5.2

14. Fair Value Measurements – (continued)

For the year ended December 31, 2017

Net purchases,

sales, issuances

   

Purchases

   

Sales

   

Issuances

   

Settlements

   

and settlements

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

67.4

$

(85.0)

$

$

(1.4)

$

(19.0)

Corporate

 

112.3

 

(89.4)

 

 

(52.1)

 

(29.2)

Commercial mortgage-backed securities

 

 

 

 

(0.7)

 

(0.7)

Collateralized debt obligations

 

22.9

 

 

 

(15.6)

 

7.3

Other debt obligations

 

 

 

 

(0.8)

 

(0.8)

Total fixed maturities, available-for-sale

 

202.6

 

(174.4)

 

 

(70.6)

 

(42.4)

Fixed maturities, trading

 

 

(92.4)

(92.4)

Equity securities, trading

(0.7)

(0.7)

Other investments

 

2.4

 

(36.7)

 

 

 

(34.3)

Separate account assets (5)

 

401.4

(651.4)

(284.6)

 

69.8

 

(464.8)

Liabilities

Investment and universal life contracts

 

 

 

(0.2)

 

7.6

 

7.4

Other liabilities

 

 

 

 

60.0

 

60.0

Derivatives

Net derivative assets (liabilities)

 

1.5

 

2.2

 

 

 

3.7

(5)

Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts.

Transfers (Table)

For the year ended December 31, 2019

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

of Level 1 into

of Level 1 into

of Level 2 into

of Level 2 into

of Level 3 into

of Level 3 into

   

Level 2

   

Level 3

   

Level 1

   

Level 3

   

Level 1

   

Level 2

   

(in millions)

Assets

Fixed maturities, available-for-sale:

U.S. government and agencies

$

$

$

1.1

$

$

$

Corporate

4.1

Commercial mortgage-backed securities

 

 

 

 

3.7

 

 

2.3

Collateralized debt obligations

 

69.9

Other debt obligations

 

8.3

76.3

Total fixed maturities, available-for-sale

1.1

86.0

78.6

Other investments

10.0

Separate account assets

 

102.7

173.2

14. Fair Value Measurements – (continued)

For the year ended December 31, 2018

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

of Level 1 into

of Level 1 into

of Level 2 into

of Level 2 into

of Level 3 into

of Level 3 into

   

Level 2

   

Level 3

   

Level 1

   

Level 3

   

Level 1

   

Level 2

   

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

$

$

$

$

$

1.3

Corporate

1.0

54.8

Commercial mortgage-backed securities

 

 

 

 

3.6

 

 

1.5

Collateralized debt obligations

 

54.7

237.0

Other debt obligations

 

91.0

Total fixed maturities, available-for-sale

59.3

385.6

Fixed maturities, trading

 

3.7

Separate account assets

 

293.2

0.8

2.3

0.2

40.9

For the year ended December 31, 2017

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

Transfers out

of Level 1 into

of Level 1 into

of Level 2 into

of Level 2 into

of Level 3 into

of Level 3 into

   

Level 2

   

Level 3

   

Level 1

   

Level 3

   

Level 1

   

Level 2

   

(in millions)

Assets

Fixed maturities, available-for- sale:

Non-U.S. governments

$

$

$

$

$

$

35.2

Corporate

 

 

 

 

22.2

 

 

125.3

Commercial mortgage-backed securities

 

 

 

 

26.3

 

 

84.5

Collateralized debt obligations

183.7

101.3

Other debt obligations

 

 

 

 

0.1

 

 

88.3

Total fixed maturities, available-for-sale

232.3

434.6

Fixed maturities, trading

1.9

Equity securities, trading

0.7

Separate account assets

 

12.5

 

 

5.9

 

3.1

 

 

38.7

Quantitative Information about Level 3 Fair Value Measurements (Table)

December 31, 2019

    

Assets /

    

    

    

    

 

(liabilities)

measured at

Valuation

Unobservable

Input/range of

Weighted

fair value

technique(s)

input description

inputs

average

(in millions)

Assets

Fixed maturities, available-for-sale:

Corporate

$

72.5

Discounted cash flow

Discount rate (1)

1.9

%-

5.1

%

3.8

%

Illiquidity premium

0

basis points ("bps")-

410

bps

152

bps

Commercial mortgage-backed securities

2.4

Discounted cash flow

Probability of default

100.0

%

100.0

%

Potential loss severity

53.1

%

53.1

%

Collateralized debt obligations

108.7

Discounted cash flow

Discount rate (1)

2.9

%-

10.0

%

3.4

%

Potential loss severity

23.0

%

23.0

%

Probability of default

100.0

%

100.0

%

Other debt obligations

 

1.2

Discounted cash flow

Discount rate (1)

5.0

%

5.0

%

Illiquidity premium

500

bps

500

bps

Other investments

14.8

Discounted cash flow

Discount rate (1)

25.0

%-

30.0

%

27.5

%

Terminal earnings before interest, taxes, depreciation and amortization multiple

3.5

x-

4.5

x

4.0

x

Market comparables

Revenue multiples (2)

0.8

x-

7.0

x

4.1

x

Separate account assets

 

8,966.2

Discounted cash flow - mortgage loans

Discount rate (1)

2.8

%

2.8

%

Illiquidity premium

60

bps

60

bps

Credit spread rate

120

bps

120

bps

Discounted cash flow - real estate

Discount rate (1)

5.5

%-

11.8

%

6.7

%

Terminal capitalization rate

4.5

%-

9.3

%

5.7

%

Average market rent growth rate

2.0

%-

4.7

%

3.0

%

Discounted cash flow - real estate debt

Loan to value

8.0

%-

80.4

%

45.9

%

Market interest rate

3.2

%-

5.8

%

3.6

%

Liabilities

Investment and universal life contracts (6)

 

(214.2)

Discounted cash flow

Long duration interest rate

2.0

%-

2.1

%  (3)

Long-term equity market volatility

15.0

%-

26.9

%

Non-performance risk

0.2

%-

1.3

%

Utilization rate

See note (4)

Lapse rate

0.0

%-

18.0

%

Mortality rate

See note (5)

14. Fair Value Measurements – (continued)

December 31, 2018

    

Assets /

    

    

    

    

 

(liabilities)

 

measured at

Valuation

Unobservable

Input/range of

Weighted

fair value

technique(s)

input description

inputs

average

(in millions)

Assets

Fixed maturities, available-for-sale:

Non-U.S. governments

$

4.6

Discounted cash flow

Discount rate (1)

3.2

%

3.2

%

Illiquidity premium

50

bps

50

bps

Comparability adjustment

(25)

bps

(25)

bps

Corporate

 

25.4

Discounted cash flow

Discount rate (1)

3.3

%-

4.5

%

3.9

%

Illiquidity premium

0

bps-

60

bps

36

bps

Other debt obligations

 

1.7

Discounted cash flow

Discount rate (1)

5.0

%

5.0

%

Illiquidity premium

500

bps

500

bps

Separate account assets

 

8,440.8

Discounted cash flow - mortgage loans

Discount rate (1)

3.3

%-

4.7

%

4.2

%

Illiquidity premium

0

bps-

60

bps

56

bps

Credit spread rate

85

bps-

172

bps

168

bps

Discounted cash flow - real estate

Discount rate (1)

5.6

%-

11.5

%

6.7

%

Terminal capitalization rate

4.3

%-

9.3

%

5.8

%

Average market rent growth rate

2.0

%-

4.7

%

2.9

%

Discounted cash flow - real estate debt

Loan to value

11.0

%-

69.3

%

45.9

%

Market interest rate

3.9

%-

6.0

%

4.3

%

Liabilities

Investment and universal life contracts (6)

 

(45.2)

Discounted cash flow

Long duration interest rate

2.8

%-

2.9

%  (3)

Long-term equity market volatility

16.7

%-

27.8

%

Non-performance risk

0.6

%-

1.6

%

Utilization rate

See note (4)

Lapse rate

1.3

%-

16.0

%

Mortality rate

See note (5)

(1)Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any illiquidity or other adjustments, where applicable.
(2)Revenue multiples are amounts used when we have determined market participants would use such multiples to value the investments.
(3)Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. Derived from interpolation between various observable swap rates.
(4)This input factor is the number of contractholders taking withdrawals as well as the amount and timing of the withdrawals and a range does not provide a meaningful presentation.
(5)This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation.
(6)Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported.
Fair Value Option (Table)

    

December 31, 2019

    

December 31, 2018

  

(in millions)

Commercial mortgage loans of consolidated VIEs (1) (2)

Fair value

$

$

6.4

Aggregate contractual principal

6.5

Real estate ventures (1)

Fair value

22.8

17.2

(1)Reported with other investments in the consolidated statements of financial position.
(2)None of the loans were more than 90 days past due or in non-accrual status.

14. Fair Value Measurements – (continued)

For the year ended December 31, 

    

2019

    

2018

    

2017

  

(in millions)

Commercial mortgage loans of consolidated VIEs

Change in fair value pre-tax gain (loss) (1) (2)

$

0.1

$

(0.2)

$

(0.4)

Interest income (3)

0.3

0.7

0.9

Obligations of consolidated VIEs

Change in fair value pre-tax loss - instrument specific credit risk (2) (4)

(0.1)

Change in fair value pre-tax loss (2)

(0.1)

Interest expense (5)

0.3

Real estate ventures

Change in fair value pre-tax gain (6)

6.0

1.7

3.8

Investment funds

Change in fair value pre-tax gain (6) (7)

1.7

Dividend income (6)

1.9

(1)None of the change in fair value related to instrument-specific credit risk.
(2)Reported in net realized capital gains (losses) on the consolidated statements of operations.
(3)Reported in net investment income on the consolidated statements of operations and recorded based on the effective interest rates as determined at the closing of the loan.
(4)Estimated based on credit spreads and quality ratings.
(5)Reported in operating expenses on the consolidated statements of operations.
(6)Reported in net investment income on the consolidated statements of operations.
(7)Absent the fair value election, the change in fair value on the investments would be reported in OCI.
Financial Instruments Not Reported at Fair Value (Table)

December 31, 2019

Fair value hierarchy level

    

Carrying amount

    

Fair value

    

Level 1

    

Level 2

    

Level 3

   

(in millions)

 

Assets (liabilities)

Mortgage loans

$

16,486.9

$

17,214.7

$

$

$

17,214.7

Policy loans

 

798.0

 

1,030.8

 

 

 

1,030.8

Other investments

 

278.8

 

273.1

 

 

180.3

 

92.8

Cash and cash equivalents

 

1,216.9

 

1,216.9

 

1,193.3

 

23.6

 

Investment contracts

 

(33,922.2)

 

(34,001.3)

 

 

(4,304.5)

 

(29,696.8)

Short-term debt

 

(93.4)

 

(93.4)

 

 

(93.4)

 

Long-term debt

 

(3,734.1)

 

(4,122.9)

 

 

(4,015.3)

 

(107.6)

Separate account liabilities

 

(151,132.4)

 

(149,955.6)

 

 

 

(149,955.6)

Bank deposits (1)

 

(469.6)

 

(468.3)

 

 

(468.3)

 

Cash collateral payable

 

(156.8)

 

(156.8)

 

(156.8)

 

 

December 31, 2018

 

Fair value hierarchy level

 

    

Carrying amount

    

Fair value

    

Level 1

    

Level 2

    

Level 3

   

(in millions)

 

Assets (liabilities)

Mortgage loans

$

15,336.9

$

15,383.6

$

$

$

15,383.6

Policy loans

 

801.4

 

965.5

 

 

 

965.5

Other investments

 

247.4

 

239.8

 

 

157.5

 

82.3

Cash and cash equivalents

 

1,201.6

 

1,201.6

 

1,148.6

 

53.0

 

Investment contracts

 

(32,572.1)

 

(31,428.2)

 

 

(4,085.7)

 

(27,342.5)

Short-term debt

 

(42.9)

 

(42.9)

 

 

(42.9)

 

Long-term debt

 

(3,259.6)

 

(3,257.1)

 

 

(3,129.3)

 

(127.8)

Separate account liabilities

 

(132,562.9)

 

(131,491.4)

 

 

 

(131,491.4)

Bank deposits (1)

 

(500.0)

 

(489.1)

 

 

(489.1)

 

Cash collateral payable

 

(79.5)

 

(79.5)

 

(79.5)

 

 

(1)   Excludes deposit liabilities without defined or contractual maturities.

v3.19.3.a.u2
Statutory Insurance Financial Information (Tables)
12 Months Ended
Dec. 31, 2019
Statutory Insurance Financial Information  
Statutory Net Income and Statutory Capital and Surplus of Principal Life (Table)

As of or for the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Statutory net income

$

989.3

$

1,017.6

$

1,976.7

Statutory capital and surplus

5,193.4

 

5,319.6

 

4,946.8

v3.19.3.a.u2
Segment Information (Tables)
12 Months Ended
Dec. 31, 2019
Segment Information  
Reconciliation of Assets from Segment to Consolidated (Table)

    

December 31, 2019

    

December 31, 2018

 

(in millions)

 

Assets:

Retirement and Income Solutions

$

192,698.1

$

163,833.6

Principal Global Investors

2,363.3

 

2,301.0

Principal International

48,857.6

 

46,701.2

U.S. Insurance Solutions

28,669.6

 

25,388.2

Corporate

3,499.2

 

4,812.1

Total consolidated assets

$

276,087.8

$

243,036.1

Reconciliation of Operating Revenues and Pre-tax Operating Earnings (Losses) by Segment (Table)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Operating revenues by segment:

Retirement and Income Solutions:

Retirement and Income Solutions – Fee

$

2,003.0

$

1,783.7

$

1,776.4

Retirement and Income Solutions – Spread

6,951.4

5,493.3

5,378.3

Total Retirement and Income Solutions (1)

8,954.4

7,277.0

7,154.7

Principal Global Investors (2)

1,505.8

 

1,736.3

 

1,444.4

Principal International

1,523.2

 

1,372.9

 

1,251.5

U.S. Insurance Solutions:

Specialty Benefits insurance

2,493.6

 

2,326.4

 

2,168.4

Individual Life insurance

1,955.6

 

1,763.6

 

1,745.3

Eliminations

(0.2)

 

(0.2)

 

(0.2)

Total U.S. Insurance Solutions

4,449.0

 

4,089.8

 

3,913.5

Corporate

(39.3)

 

(51.2)

 

(60.8)

Total segment operating revenues

16,393.1

 

14,424.8

 

13,703.3

Net realized capital gains (losses), net of related revenue adjustments

(98.5)

 

(132.3)

 

472.2

Adjustments related to equity method investments

(72.5)

(55.3)

(82.3)

Total revenues per consolidated statements of operations

$

16,222.1

$

14,237.2

$

14,093.2

Pre-tax operating earnings (losses) by segment:

Retirement and Income Solutions

$

874.0

$

922.2

$

938.5

Principal Global Investors

483.3

 

562.1

 

481.3

Principal International

390.7

 

272.6

 

346.2

U.S. Insurance Solutions

521.6

 

467.0

 

412.8

Corporate

(380.3)

 

(269.4)

 

(305.1)

Total segment pre-tax operating earnings

1,889.3

 

1,954.5

 

1,873.7

Pre-tax net realized capital gains (losses), as adjusted (3)

(140.9)

 

(126.4)

 

520.3

Pre-tax other adjustments (4)

 

 

(70.0)

Adjustments related to equity method investments and noncontrolling interest

(55.1)

(43.7)

(71.8)

Income before income taxes per consolidated statements of operations

$

1,693.3

$

1,784.4

$

2,252.2

(1)Reflects inter-segment revenues of $357.8 million, $393.6 million and $402.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.
(2)Reflects inter-segment revenues of $264.9 million, $262.8 million and $250.9 million for the years ended December 31, 2019, 2018 and 2017, respectively.
(3)Pre-tax net realized capital gains (losses), as adjusted, is derived as follows:

16. Segment Information – (continued)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Net realized capital gains (losses)

$

(52.8)

$

(75.4)

$

524.2

Derivative and hedging-related revenue adjustments

(80.4)

 

(64.9)

 

(59.4)

Market value adjustments to fee revenues

 

0.1

 

(0.1)

Adjustments related to equity method investments

2.6

(5.4)

1.4

Adjustments related to sponsored investment funds

23.6

12.9

6.3

Recognition of front-end fee revenue

8.5

 

0.4

 

(0.2)

Net realized capital gains (losses), net of related revenue adjustments

(98.5)

 

(132.3)

 

472.2

Amortization of deferred acquisition costs and other actuarial balances

(40.8)

 

(27.0)

 

55.0

Capital (gains) losses distributed

(68.2)

 

14.4

 

(55.0)

Market value adjustments of embedded derivatives

66.6

 

18.5

 

48.1

Pre-tax net realized capital gains (losses), as adjusted (a)

$

(140.9)

$

(126.4)

$

520.3

(a)

As adjusted before noncontrolling interest capital gains (losses).

(4)

For the year ended December 31, 2017, pre-tax other adjustments included the negative effect of a contribution to The Principal Financial Group Foundation, Inc.

Reconciliation of Other Significant Reconciling Items from Segments to Consolidated (Table)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Income tax expense (benefit) by segment:

Retirement and Income Solutions

$

71.8

$

85.6

$

123.0

Principal Global Investors

121.8

 

149.1

 

186.0

Principal International

106.8

 

73.3

 

87.5

U.S. Insurance Solutions

101.8

 

85.7

 

134.0

Corporate

(82.0)

 

(36.7)

 

(135.4)

Total segment income taxes from operating earnings

320.2

 

357.0

 

395.1

Tax expense (benefit) related to net realized capital losses, as adjusted

1.3

 

(71.4)

 

209.1

Tax benefit related to other after-tax adjustments (1)

 

 

(594.5)

Certain adjustments related to equity method investments and noncontrolling interest

(72.3)

(54.9)

(82.0)

Total income taxes per consolidated statements of operations

$

249.2

$

230.7

$

(72.3)

(1)The 2017 tax benefit includes $568.3 million associated with the U.S. tax reform.
Reconciliation of Depreciation and Amortization Expense from Segments to Consolidated (Table)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Depreciation and amortization expense by segment:

Retirement and Income Solutions

$

48.2

$

32.5

$

30.6

Principal Global Investors

18.9

 

21.9

 

19.8

Principal International

58.6

 

59.6

 

53.1

U.S. Insurance Solutions

25.0

 

26.2

 

28.1

Corporate

16.1

 

10.8

 

8.2

Total depreciation and amortization expense included in our consolidated statements of operations

$

166.8

$

151.0

$

139.8

v3.19.3.a.u2
Revenues from Contracts with Customers (Tables)
12 Months Ended
Dec. 31, 2019
Revenues from Contracts with Customers  
Disaggregation of Revenues from Contracts with Customers (Table)

For the year ended December 31,

    

2019

    

2018

    

2017

 

(in millions)

Revenue from contracts with customers by segment:

Retirement and Income Solutions:

Retirement and Income Solutions – Fee

 

$

455.5

 

$

252.4

 

$

258.0

Retirement and Income Solutions – Spread

9.3

 

10.5

 

 

10.2

Total Retirement and Income Solutions

464.8

 

262.9

 

 

268.2

Principal Global Investors

1,456.7

 

1,700.5

 

 

1,406.1

Principal International

462.2

 

477.1

 

 

426.4

U.S. Insurance Solutions:

Specialty Benefits insurance

14.9

 

14.8

 

 

13.9

Individual Life insurance

51.2

 

42.4

 

 

36.4

Eliminations

(0.2)

 

(0.2)

 

 

(0.2)

Total U.S. Insurance Solutions

65.9

 

57.0

 

 

50.1

Corporate

160.4

 

161.4

 

 

148.4

Total segment revenue from contracts with customers

2,610.0

 

2,658.9

 

 

2,299.2

Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1)

1,791.4

 

1,614.4

 

 

1,593.4

Pre-tax other adjustments (2)

8.5

 

0.5

 

 

(0.3)

Total fees and other revenues per consolidated statements of operations

 

$

4,409.9

 

$

4,273.8

 

$

3,892.3

(1)Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted for under the financial instruments or insurance contracts standards.
(2)Pre-tax other adjustments relate to the recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and certain market value adjustments to fee revenues.
Retirement and Income Solutions | Retirement and Income Solutions - Fee  
Revenues from Contracts with Customers  
Disaggregation of Revenues from Contracts with Customers (Table)

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

  (in millions)

 

Administrative service fee revenue (1)

$

453.7

$

250.7

$

256.4

Other fee revenue

 

1.8

 

1.7

 

1.6

Total revenues from contracts with customers

 

455.5

 

252.4

 

258.0

Fees and other revenues not within the scope of revenue recognition guidance

 

1,139.0

 

1,132.9

 

1,111.2

Total fees and other revenues

 

1,594.5

 

1,385.3

 

1,369.2

Premiums and other considerations

 

3.5

 

4.0

 

3.8

Net investment income

 

405.0

 

394.4

 

403.4

Total operating revenues

$

2,003.0

$

1,783.7

$

1,776.4

(1)Includes fee revenue for the Acquired Business in 2019.
Retirement and Income Solutions | Retirement and Income Solutions - Spread  
Revenues from Contracts with Customers  
Disaggregation of Revenues from Contracts with Customers (Table)

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

(in millions)

Deposit account fee revenue

$

9.3

$

10.5

$

10.2

Total revenues from contracts with customers

 

9.3

 

10.5

 

10.2

Fees and other revenues not within the scope of revenue recognition guidance

 

13.9

 

12.5

 

15.0

Total fees and other revenues

 

23.2

 

23.0

 

25.2

Premiums and other considerations

 

4,859.2

 

3,631.9

 

3,667.3

Net investment income

 

2,069.0

 

1,838.4

 

1,685.8

Total operating revenues

$

6,951.4

$

5,493.3

$

5,378.3

Principal Global Investors  
Revenues from Contracts with Customers  
Disaggregation of Revenues from Contracts with Customers (Table)

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

(in millions)

 

Management fee revenue

$

1,239.1

$

1,244.5

$

1,217.0

Other fee revenue (1)

 

217.6

 

456.0

 

189.1

Total revenues from contracts with customers

1,456.7

 

1,700.5

 

1,406.1

Fees and other revenues not within the scope of revenue recognition guidance

38.5

 

30.4

 

28.1

Total fees and other revenues

1,495.2

 

1,730.9

 

1,434.2

Net investment income

10.6

 

5.4

 

10.2

Total operating revenues

$

1,505.8

$

1,736.3

$

1,444.4

(1)

During the third quarter of 2018, we recognized a $253.1 million accelerated performance fee resulting from the realignment of a real estate investment team.

Principal International  
Revenues from Contracts with Customers  
Disaggregation of Revenues from Contracts with Customers (Table)

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

 

(in millions)

Management fee revenue

$

459.3

$

472.1

$

414.6

Other fee revenue

 

2.9

 

5.0

 

11.8

Total revenues from contracts with customers

 

462.2

 

477.1

 

426.4

Fees and other revenues not within the scope of revenue recognition guidance

 

6.3

 

7.3

 

7.1

Total fees and other revenues

 

468.5

 

484.4

 

433.5

Premiums and other considerations

 

393.3

 

317.2

 

218.0

Net investment income

 

661.4

 

571.3

 

600.0

Total operating revenues

$

1,523.2

$

1,372.9

$

1,251.5

Revenues from contracts with customers by region:

 

  

 

  

 

  

Latin America

$

351.5

$

370.8

$

318.9

Asia

 

111.0

 

106.3

 

108.3

Principal International corporate / regional offices

 

0.9

 

0.9

 

0.7

Eliminations

 

(1.2)

 

(0.9)

 

(1.5)

Total revenues from contracts with customers

$

462.2

$

477.1

$

426.4

U.S. Insurance Solutions  
Revenues from Contracts with Customers  
Disaggregation of Revenues from Contracts with Customers (Table)

For the year ended December 31,

 

    

2019

    

2018

    

2017

 

(in millions)

 

Specialty Benefits insurance:

 

  

 

  

 

  

Administrative service fees

$

14.9

$

14.8

$

13.9

Total revenues from contracts with customers

 

14.9

 

14.8

 

13.9

Fees and other revenues not within the scope of revenue recognition guidance

 

19.6

 

20.6

 

21.3

Total fees and other revenues

 

34.5

 

35.4

 

35.2

Premiums and other considerations

 

2,292.7

 

2,134.1

 

1,985.9

Net investment income

 

166.4

 

156.9

 

147.3

Total operating revenues

$

2,493.6

$

2,326.4

$

2,168.4

Individual Life insurance:

 

  

 

  

 

  

Administrative service fees

$

24.3

$

22.8

$

21.5

Commission income

 

26.9

 

19.6

 

14.9

Total revenues from contracts with customers

 

51.2

 

42.4

 

36.4

Fees and other revenues not within the scope of revenue recognition guidance

 

875.9

 

727.0

 

703.5

Total fees and other revenues

 

927.1

 

769.4

 

739.9

Premiums and other considerations

 

317.9

 

322.4

 

342.4

Net investment income

 

710.6

 

671.8

 

663.0

Total operating revenues

$

1,955.6

$

1,763.6

$

1,745.3

Corporate  
Revenues from Contracts with Customers  
Disaggregation of Revenues from Contracts with Customers (Table)

For the year ended December 31,

    

2019

    

2018

    

2017

  (in millions)

Commission income

$

320.2

$

316.1

$

299.7

Other fee revenue

46.1

35.4

30.1

Eliminations

 

(205.9)

 

(190.1)

 

(181.4)

Total revenues from contracts with customers

 

160.4

 

161.4

 

148.4

Fees and other revenues not within the scope of revenue recognition guidance

 

(301.8)

 

(316.3)

 

(292.8)

Total fees and other revenues

 

(141.4)

 

(154.9)

 

(144.4)

Net investment income

 

102.1

 

103.7

 

83.6

Total operating revenues

$

(39.3)

$

(51.2)

$

(60.8)

v3.19.3.a.u2
Stock-Based Compensation Plans (Tables)
12 Months Ended
Dec. 31, 2019
Stock-Based Compensation Plans  
Stock-Based Compensation Disclosures (Table)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions)

 

Compensation cost

$

78.7

$

77.5

$

80.6

Related income tax benefit

16.8

 

16.7

 

27.1

Capitalized as part of an asset

1.7

 

1.9

 

2.5

Nonqualified Stock Options Status (Table)

Weighted-

 

average

 

    

Number of options

    

exercise price

    

Intrinsic value

 

(in millions)

(in millions)

 

Options outstanding as of January 1, 2019

 

4.2

$

46.77

Granted

1.2

53.09

Exercised

0.1

32.59

Options outstanding as of December 31, 2019

5.3

$

48.42

$

46.6

Options vested or expected to vest as of December 31, 2019

5.3

$

48.41

$

46.6

Options exercisable as of December 31, 2019

3.5

$

44.07

$

44.4

Nonqualified Stock Options Remaining Contractual Lives and Range of Exercise Prices (Table)

Weighted-

 

Number of options

average remaining

 

Range of exercise prices

    

outstanding

    

contractual life

 

(in millions)

 

$21.70 - $32.32

0.7

2.5

$32.33 - $42.95

1.0

5.3

$42.96 - $53.58

2.2

7.1

$53.59 - $64.22

1.4

7.7

$21.70 - $64.22

5.3

Nonqualified Stock Options Fair Value (Table)

For the year ended December 31, 

 

Options

    

2019

    

2018

    

2017

 

Expected volatility

23.3

%  

26.0

%  

27.6

%

Expected term (in years)

7.0

7.0

7.0

Risk-free interest rate

2.6

%  

2.8

%  

2.2

%

Expected dividend yield

4.07

%  

3.19

%  

2.87

%

Weighted average estimated fair value

$

10.00

$

14.85

$

15.31

Nonvested Performance Share Awards Activity (Table)

Number of

Weighted-

 

performance

average grant-date

 

    

share awards

    

fair value

 

(in millions)

 

Nonvested performance share awards as of January 1, 2019

 

0.6

$

52.50

Granted

0.2

53.09

Vested

0.3

37.38

Nonvested performance share awards as of December 31, 2019

0.5

$

59.26

Nonvested Restricted Stock Units Activity (Table)

Number of

Weighted-

 

restricted

average grant-date

 

    

stock units

    

fair value

 

(in millions)

 

Nonvested restricted stock units as of January 1, 2019

 

2.7

$

52.17

Granted

1.1

53.17

Vested

1.2

38.07

Nonvested restricted stock units as of December 31, 2019

2.6

$

59.15

v3.19.3.a.u2
Earnings Per Common Share (Tables)
12 Months Ended
Dec. 31, 2019
Earnings Per Common Share  
Earnings Per Common Share (Table)

For the year ended December 31, 

 

    

2019

    

2018

    

2017

 

(in millions, except per share data)

 

Net income

$

1,444.1

$

1,553.7

$

2,324.5

Subtract:

Net income attributable to noncontrolling interest

49.9

 

7.2

 

14.1

Total

$

1,394.2

$

1,546.5

$

2,310.4

Weighted-average shares outstanding:

Basic

278.6

 

285.8

 

288.9

Dilutive effects:

Stock options

0.9

 

1.0

 

2.0

Restricted stock units

1.4

 

1.7

 

2.0

Performance share awards

0.1

 

0.3

 

0.2

Diluted

281.0

 

288.8

 

293.1

Net income per common share:

Basic

$

5.00

$

5.41

$

8.00

Diluted

$

4.96

$

5.36

$

7.88

v3.19.3.a.u2
Quarterly Results of Operations (Unaudited) (Tables)
12 Months Ended
Dec. 31, 2019
Quarterly Results of Operations (Unaudited)  
Quarterly Results of Operations (Table)

For the three months ended ,

 

    

December 31

    

September 30

    

June 30

    

March 31

 

(in millions, except per share data)

 

2019

Total revenues

$

4,047.2

$

4,458.4

$

3,972.6

$

3,743.9

Total expenses

3,675.9

 

4,112.7

 

3,522.3

 

3,217.9

Net income

315.3

 

284.6

 

392.1

 

452.1

Net income attributable to PFG

300.9

 

277.1

 

386.3

 

429.9

Basic earnings per common share

1.08

 

0.99

 

1.38

 

1.54

Diluted earnings per common share

1.07

 

0.98

 

1.37

 

1.53

2018

Total revenues

$

3,770.6

$

4,348.1

$

3,234.9

$

2,883.6

Total expenses

3,527.7

 

3,779.0

 

2,719.5

 

2,426.6

Net income

231.7

 

460.0

 

459.5

 

402.5

Net income attributable to PFG

236.5

 

456.3

 

456.6

 

397.1

Basic earnings per common share

0.84

 

1.60

 

1.59

 

1.37

Diluted earnings per common share

0.83

 

1.59

 

1.58

 

1.36

v3.19.3.a.u2
Condensed Consolidating Financial Information (Tables)
12 Months Ended
Dec. 31, 2019
Condensed Consolidating Financial Information  
Condensed Consolidating Financial Information, Notes Guarantor (Table)

Condensed Consolidating Statements of Financial Position

December 31, 2019

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined (1)

Eliminations

consolidated

   

(in millions)

 

Assets

Fixed maturities, available-for-sale

$

265.8

$

62,363.1

$

7,833.1

$

(355.8)

$

70,106.2

Fixed maturities, trading

 

268.2

237.5

170.2

675.9

Equity securities

 

69.9

1,809.5

1,879.4

Mortgage loans

 

15,388.5

1,793.5

(695.1)

16,486.9

Real estate

 

3.3

1,711.5

1,714.8

Policy loans

 

742.2

55.8

798.0

Investment in unconsolidated entities

 

17,539.6

5,036.2

6,429.5

(28,175.1)

830.2

Other investments

 

10.4

3,682.5

2,859.6

(2,692.5)

3,860.0

Cash and cash equivalents

 

394.9

1,178.1

1,767.7

(824.8)

2,515.9

Accrued investment income

 

1.6

608.5

81.4

(4.9)

686.6

Premiums due and other receivables

 

2,082.3

4,525.8

(4,867.8)

1,740.3

Deferred acquisition costs

 

3,509.7

11.6

3,521.3

Property and equipment

 

733.9

233.8

967.7

Goodwill

 

54.3

1,639.5

1,693.8

Other intangibles

 

17.7

1,769.0

1,786.7

Separate account assets

 

125,801.7

39,666.3

165,468.0

Other assets

 

383.2

1,118.6

5,358.4

(5,504.1)

1,356.1

Total assets

$

18,863.7

$

222,628.0

$

77,716.2

$

(43,120.1)

$

276,087.8

Liabilities

Contractholder funds

$

$

38,334.6

$

3,388.0

$

(355.1)

$

41,367.5

Future policy benefits and claims

 

35,476.6

6,740.7

(1,379.1)

40,838.2

Other policyholder funds

 

790.3

171.9

(2.8)

959.4

Short-term debt

 

93.4

93.4

Long-term debt

 

3,625.5

763.1

(654.5)

3,734.1

Income taxes currently payable

 

81.7

(65.5)

16.2

Deferred income taxes

 

325.8

1,965.9

(495.1)

1,796.6

Separate account liabilities

 

125,801.7

39,666.3

165,468.0

Other liabilities

 

620.2

10,533.5

7,111.2

(11,401.2)

6,863.7

Total liabilities

 

4,245.7

211,262.5

59,982.2

(14,353.3)

261,137.1

Redeemable noncontrolling interest

 

264.9

264.9

Stockholders' equity

Common stock

 

4.8

2.5

(2.5)

4.8

Additional paid-in capital

 

10,182.6

6,331.5

10,038.7

(16,370.2)

10,182.6

Retained earnings

 

11,074.3

2,410.8

6,414.3

(8,825.1)

11,074.3

Accumulated other comprehensive income

 

1,037.9

2,620.7

948.3

(3,569.0)

1,037.9

Treasury stock, at cost

 

(7,681.6)

(7,681.6)

Total stockholders' equity attributable to PFG

 

14,618.0

11,365.5

17,401.3

(28,766.8)

14,618.0

Noncontrolling interest

 

67.8

67.8

Total stockholders’ equity

 

14,618.0

11,365.5

17,469.1

(28,766.8)

14,685.8

Total liabilities and stockholders' equity

$

18,863.7

$

222,628.0

$

77,716.2

$

(43,120.1)

$

276,087.8

(1)PFG sponsors nonqualified benefit plans. Nonqualified benefit plan assets and liabilities held in Rabbi trusts were $731.9 million and $593.7 million, respectively.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Financial Position

December 31, 2018

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined (1)

Eliminations

consolidated

   

(in millions)

 

Assets

Fixed maturities, available-for-sale

$

211.5

$

53,401.7

$

6,857.9

$

(362.6)

$

60,108.5

Fixed maturities, trading

 

308.9

165.5

161.7

636.1

Equity securities

 

84.8

1,758.9

1,843.7

Mortgage loans

 

14,478.0

1,615.5

(756.6)

15,336.9

Real estate

 

1.9

1,727.8

1,729.7

Policy loans

 

755.9

45.5

801.4

Investment in unconsolidated entities

 

13,862.4

2,324.4

6,853.8

(22,171.8)

868.8

Other investments

 

10.7

5,549.1

2,517.6

(4,635.9)

3,441.5

Cash and cash equivalents

 

334.9

1,323.9

2,014.8

(696.1)

2,977.5

Accrued investment income

 

1.4

563.2

77.5

(5.9)

636.2

Premiums due and other receivables

 

1,818.1

3,781.3

(4,186.3)

1,413.1

Deferred acquisition costs

 

3,680.2

13.3

3,693.5

Property and equipment

 

661.3

106.0

767.3

Goodwill

 

54.3

1,045.7

1,100.0

Other intangibles

 

19.7

1,295.4

1,315.1

Separate account assets

 

107,343.0

37,644.9

144,987.9

Other assets

 

375.0

1,135.1

4,418.3

(4,549.5)

1,378.9

Total assets

$

15,104.8

$

193,360.1

$

71,935.9

$

(37,364.7)

$

243,036.1

Liabilities

Contractholder funds

$

$

36,861.7

$

3,189.2

$

(351.2)

$

39,699.7

Future policy benefits and claims

 

30,690.3

6,128.6

(1,154.1)

35,664.8

Other policyholder funds

 

725.7

165.3

(2.6)

888.4

Short-term debt

 

42.9

42.9

Long-term debt

 

3,129.8

851.2

(721.4)

3,259.6

Income taxes currently payable

 

80.7

(55.4)

25.3

Deferred income taxes

 

405.3

1,056.4

(503.3)

958.4

Separate account liabilities

 

107,343.0

37,644.9

144,987.9

Other liabilities

 

585.0

8,503.2

8,586.5

(12,012.8)

5,661.9

Total liabilities

 

3,714.8

184,529.2

57,745.7

(14,800.8)

231,188.9

Redeemable noncontrolling interest

 

391.2

391.2

Stockholders' equity

Common stock

 

4.8

2.5

(2.5)

4.8

Additional paid-in capital

 

10,060.7

6,331.6

9,461.2

(15,792.8)

10,060.7

Retained earnings

 

10,290.2

2,441.2

5,855.0

(8,296.2)

10,290.2

Accumulated other comprehensive income (loss)

 

(1,565.1)

55.6

(1,583.2)

1,527.6

(1,565.1)

Treasury stock, at cost

 

(7,400.6)

(7,400.6)

Total stockholders' equity attributable to PFG

 

11,390.0

8,830.9

13,733.0

(22,563.9)

11,390.0

Noncontrolling interest

 

66.0

66.0

Total stockholders’ equity

 

11,390.0

8,830.9

13,799.0

(22,563.9)

11,456.0

Total liabilities and stockholders' equity

$

15,104.8

$

193,360.1

$

71,935.9

$

(37,364.7)

$

243,036.1

(1)PFG sponsors nonqualified benefit plans. Nonqualified benefit plan assets and liabilities held in Rabbi trusts were $671.7 million and $542.4 million, respectively.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2019

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

7,189.2

$

677.4

$

$

7,866.6

Fees and other revenues

 

2,343.9

2,461.9

(395.9)

4,409.9

Net investment income

 

19.4

2,843.7

2,223.9

(1,088.6)

3,998.4

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

 

12.3

(3,509.5)

3,488.5

(0.6)

(9.3)

Net other-than-temporary impairment losses on available-for-sale securities

 

(35.6)

(2.7)

(38.3)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

 

(4.7)

(0.5)

(5.2)

Net impairment losses on available-for-sale securities

 

(40.3)

(3.2)

(43.5)

Net realized capital gains (losses)

 

12.3

(3,549.8)

3,485.3

(0.6)

(52.8)

Total revenues

 

31.7

8,827.0

8,848.5

(1,485.1)

16,222.1

Expenses

Benefits, claims and settlement expenses

 

8,940.7

976.4

(11.3)

9,905.8

Dividends to policyholders

 

119.1

119.1

Operating expenses

 

210.9

2,460.0

2,206.2

(373.2)

4,503.9

Total expenses

 

210.9

11,519.8

3,182.6

(384.5)

14,528.8

Income (loss) before income taxes

 

(179.2)

(2,692.8)

5,665.9

(1,100.6)

1,693.3

Income taxes (benefits)

 

(44.2)

(685.5)

980.2

(1.3)

249.2

Equity in the net income (loss) of subsidiaries

 

1,529.2

3,121.0

(3,115.6)

(1,534.6)

Net income

 

1,394.2

1,113.7

1,570.1

(2,633.9)

1,444.1

Net income attributable to noncontrolling interest

 

49.9

49.9

Net income attributable to PFG

$

1,394.2

$

1,113.7

$

1,520.2

$

(2,633.9)

$

1,394.2

Net income

$

1,394.2

$

1,113.7

$

1,570.1

$

(2,633.9)

$

1,444.1

Other comprehensive income

 

2,570.9

2,564.6

2,654.0

(5,182.8)

2,606.7

Comprehensive income

$

3,965.1

$

3,678.3

$

4,224.1

$

(7,816.7)

$

4,050.8

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2018

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

5,846.0

$

563.6

$

$

6,409.6

Fees and other revenues

 

2,174.4

2,487.0

(387.6)

4,273.8

Net investment income

 

25.8

2,655.7

2,192.6

(1,244.9)

3,629.2

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

 

(8.2)

118.8

(175.1)

18.2

(46.3)

Net other-than-temporary impairment (losses) recoveries on available-for-sale securities

 

14.1

(3.5)

10.6

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income

 

(40.1)

0.4

(39.7)

Net impairment losses on available-for-sale securities

 

(26.0)

(3.1)

(29.1)

Net realized capital gains (losses)

 

(8.2)

92.8

(178.2)

18.2

(75.4)

Total revenues

 

17.6

10,768.9

5,065.0

(1,614.3)

14,237.2

Expenses

Benefits, claims and settlement expenses

 

7,346.3

857.1

(10.9)

8,192.5

Dividends to policyholders

 

123.6

123.6

Operating expenses

 

191.9

2,320.1

1,982.7

(358.0)

4,136.7

Total expenses

 

191.9

9,790.0

2,839.8

(368.9)

12,452.8

Income (loss) before income taxes

 

(174.3)

978.9

2,225.2

(1,245.4)

1,784.4

Income taxes (benefits)

 

(62.5)

60.0

235.0

(1.8)

230.7

Equity in the net income (loss) of subsidiaries

 

1,658.3

334.7

(335.3)

(1,657.7)

Net income

 

1,546.5

1,253.6

1,654.9

(2,901.3)

1,553.7

Net income attributable to noncontrolling interest

 

7.2

7.2

Net income attributable to PFG

$

1,546.5

$

1,253.6

$

1,647.7

$

(2,901.3)

$

1,546.5

Net income

$

1,546.5

$

1,253.6

$

1,654.9

$

(2,901.3)

$

1,553.7

Other comprehensive loss

 

(1,824.5)

(1,548.5)

(1,928.5)

3,465.8

(1,835.7)

Comprehensive loss

$

(278.0)

$

(294.9)

$

(273.6)

$

564.5

$

(282.0)

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2017

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

5,777.7

$

439.7

$

$

6,217.4

Fees and other revenues

 

7.8

 

2,140.9

 

2,163.4

 

(419.8)

 

3,892.3

Net investment income

 

9.7

 

2,533.1

 

3,180.9

 

(2,264.4)

 

3,459.3

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

 

(0.6)

 

(84.5)

 

691.8

 

(0.7)

 

606.0

Net other-than-temporary impairment losses on available-for-sale securities

 

 

(28.2)

 

(0.5)

 

 

(28.7)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

 

 

(46.4)

 

(6.7)

 

 

(53.1)

Net impairment losses on available-for-sale securities

 

 

(74.6)

 

(7.2)

 

 

(81.8)

Net realized capital gains (losses)

 

(0.6)

 

(159.1)

 

684.6

 

(0.7)

 

524.2

Total revenues

 

16.9

 

10,292.6

 

6,468.6

 

(2,684.9)

 

14,093.2

Expenses

Benefits, claims and settlement expenses

 

 

7,153.5

 

679.9

 

(10.8)

 

7,822.6

Dividends to policyholders

 

 

124.6

 

 

 

124.6

Operating expenses

 

238.1

 

2,185.4

 

1,823.2

 

(352.9)

 

3,893.8

Total expenses

 

238.1

 

9,463.5

 

2,503.1

 

(363.7)

 

11,841.0

Income (loss) before income taxes

 

(221.2)

 

829.1

 

3,965.5

 

(2,321.2)

 

2,252.2

Income taxes (benefits)

 

63.1

 

(540.1)

 

376.4

 

28.3

 

(72.3)

Equity in the net income (loss) of subsidiaries (1)

 

2,594.7

 

901.5

 

(1,005.3)

 

(2,490.9)

 

Net income

2,310.4

2,270.7

2,583.8

 

(4,840.4)

 

2,324.5

Net income attributable to noncontrolling interest

 

 

 

14.1

 

 

14.1

Net income attributable to PFG

$

2,310.4

$

2,270.7

$

2,569.7

$

(4,840.4)

$

2,310.4

Net income

$

2,310.4

$

2,270.7

$

2,583.8

$

(4,840.4)

$

2,324.5

Other comprehensive income

 

840.3

611.6

877.6

(1,485.2)

844.3

Comprehensive income

$

3,150.7

$

2,882.3

$

3,461.4

$

(6,325.6)

$

3,168.8

(1)Principal Life Insurance Company Only includes income from discontinued operations of $35.5 million related to its sale of Principal Global Investors, LLC to PFS in connection with a corporate reorganization.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2019

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Operating activities

Net cash provided by operating activities

$

7.1

$

2,292.0

$

650.5

$

2,543.6

$

5,493.2

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

(251.5)

(11,482.9)

(2,402.7)

(14,137.1)

Sales

1,411.0

988.9

(2.5)

2,397.4

Maturities

200.0

6,123.0

741.2

7,064.2

Mortgage loans acquired or originated

(2,943.6)

(555.9)

11.8

(3,487.7)

Mortgage loans sold or repaid

2,030.8

372.0

(66.9)

2,335.9

Real estate acquired

(0.3)

(127.2)

(127.5)

Real estate sold

96.3

96.3

Net purchases of property and equipment

(0.1)

(52.9)

(79.4)

(132.4)

Purchase of business or interests in subsidiaries, net of cash acquired

(1,208.5)

(1,208.5)

Dividends and returns of capital received from unconsolidated entities

494.2

2.2

1,169.2

(1,665.6)

Net change in other investments

(34.0)

2,646.8

(420.3)

(2,681.6)

(489.1)

Net cash provided by (used in) investing activities

408.6

(2,265.9)

(1,426.4)

(4,404.8)

(7,688.5)

Financing activities

Issuance of common stock

37.7

37.7

Acquisition of treasury stock

(281.0)

(281.0)

Payments for financing element derivatives

(26.9)

(26.9)

Purchase of subsidiary shares from noncontrolling interest

(1.7)

(1.7)

Dividends to common stockholders

(606.0)

(606.0)

Issuance of long-term debt

493.6

11.3

504.9

Principal repayments of long-term debt

(99.1)

66.9

(32.2)

Net proceeds from short-term borrowings

57.5

57.5

Dividends and capital paid to parent

(1,169.2)

(496.4)

1,665.6

Investment contract deposits

8,727.6

472.4

9,200.0

Investment contract withdrawals

(7,709.4)

(38.3)

(7,747.7)

Net increase in banking operation deposits

623.4

623.4

Other

6.0

(0.3)

5.7

Net cash provided by (used in) financing activities

(355.7)

(171.9)

528.8

1,732.5

1,733.7

Net increase (decrease) in cash and cash equivalents

60.0

(145.8)

(247.1)

(128.7)

(461.6)

Cash and cash equivalents at beginning of period

 

334.9

1,323.9

2,014.8

(696.1)

2,977.5

Cash and cash equivalents at end of period

$

394.9

$

1,178.1

$

1,767.7

$

(824.8)

$

2,515.9

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2018

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

(132.4)

$

5,410.9

$

473.1

$

(595.1)

$

5,156.5

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

(210.9)

(11,457.5)

(2,249.2)

7.8

(13,909.8)

Sales

2,557.9

1,255.2

3,813.1

Maturities

2.3

5,660.9

554.4

6,217.6

Mortgage loans acquired or originated

(3,060.0)

(497.0)

109.5

(3,447.5)

Mortgage loans sold or repaid

1,967.4

297.8

(36.8)

2,228.4

Real estate acquired

(88.1)

(88.1)

Real estate sold

63.5

63.5

Net purchases of property and equipment

(0.1)

(50.5)

(41.7)

(92.3)

Purchase of business or interests in subsidiaries, net of cash acquired

(184.7)

(184.7)

Dividends and returns of capital received from unconsolidated entities

1,041.6

50.1

861.6

(1,953.3)

Net change in other investments

(2.2)

(626.1)

120.7

204.9

(302.7)

Net cash provided by (used in) investing activities

830.7

(4,957.8)

92.5

(1,667.9)

(5,702.5)

Financing activities

Issuance of common stock

64.0

64.0

Acquisition of treasury stock

(671.6)

(671.6)

Payments for financing element derivatives

(65.9)

(65.9)

Purchase of subsidiary shares from noncontrolling interest

(31.1)

(31.1)

Dividends to common stockholders

(598.6)

(598.6)

Issuance of long-term debt

178.9

(98.1)

80.8

Principal repayments of long-term debt

(38.1)

36.8

(1.3)

Net proceeds from short-term borrowings

8.5

8.5

Dividends and capital paid to parent

(861.6)

(1,091.7)

1,953.3

Investment contract deposits

7,896.0

412.8

8,308.8

Investment contract withdrawals

(6,520.1)

(69.5)

(6,589.6)

Net increase in banking operation deposits

553.0

553.0

Other

(4.3)

(4.3)

Net cash provided by (used in) financing activities

(1,206.2)

444.1

(77.2)

1,892.0

1,052.7

Net increase (decrease) in cash and cash equivalents

(507.9)

897.2

488.4

(371.0)

506.7

Cash and cash equivalents at beginning of period

 

842.8

 

426.7

 

1,526.4

 

(325.1)

 

2,470.8

Cash and cash equivalents at end of period

$

334.9

$

1,323.9

$

2,014.8

$

(696.1)

$

2,977.5

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2017

    

Principal

    

Principal Life

    

Principal Financial

    

    

Principal

 

Financial

Insurance

Services, Inc. and

Financial

 

Group, Inc.

Company

other subsidiaries

Group, Inc.

 

parent only

only

combined

Eliminations

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

(443.2)

$

5,571.5

$

(2,114.7)

$

1,174.4

$

4,188.0

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

 

 

(12,054.5)

 

(1,317.1)

 

 

(13,371.6)

Sales

 

 

1,005.3

 

425.1

 

(16.8)

 

1,413.6

Maturities

 

 

7,894.7

 

848.5

 

 

8,743.2

Mortgage loans acquired or originated

 

 

(2,629.8)

 

(448.1)

 

322.1

 

(2,755.8)

Mortgage loans sold or repaid

 

 

1,696.2

 

388.4

 

(212.6)

 

1,872.0

Real estate acquired

 

 

 

(200.5)

 

 

(200.5)

Real estate sold

481.9

481.9

Net purchases of property and equipment

 

(0.1)

 

(108.1)

 

(56.6)

 

 

(164.8)

Dividends and returns of capital received from unconsolidated entities

 

1,002.5

 

149.7

 

1,845.9

 

(2,998.1)

 

Net change in other investments

 

(1.1)

 

281.9

 

155.4

 

(507.0)

 

(70.8)

Net cash provided by (used in) investing activities

 

1,001.3

 

(3,764.6)

 

2,122.9

 

(3,412.4)

 

(4,052.8)

Financing activities

Issuance of common stock

 

162.5

 

 

 

 

162.5

Acquisition of treasury stock

 

(220.4)

 

 

 

 

(220.4)

Proceeds from financing element derivatives

 

 

0.1

 

 

 

0.1

Payments for financing element derivatives

 

 

(77.6)

 

 

 

(77.6)

Purchase of subsidiary shares from noncontrolling interest

 

 

 

(16.2)

 

2.9

 

(13.3)

Sale of subsidiary shares to noncontrolling interest

 

 

 

2.9

 

(2.9)

 

Dividends to common stockholders

 

(540.0)

 

 

 

 

(540.0)

Issuance of long-term debt

 

 

 

380.5

 

(377.7)

 

2.8

Principal repayments of long-term debt

 

 

 

(269.9)

 

213.4

 

(56.5)

Net repayments of short-term borrowings

 

 

 

(15.5)

 

 

(15.5)

Dividends and capital paid to parent

 

 

(1,845.9)

 

(1,152.2)

 

2,998.1

 

Investment contract deposits

 

 

9,760.5

 

393.9

 

 

10,154.4

Investment contract withdrawals

 

 

(9,889.9)

 

(24.7)

 

 

(9,914.6)

Net increase in banking operation deposits

 

 

 

136.6

 

 

136.6

Other

 

 

(2.5)

 

 

 

(2.5)

Net cash used in financing activities

 

(597.9)

 

(2,055.3)

 

(564.6)

 

2,833.8

 

(384.0)

Net decrease in cash and cash equivalents

 

(39.8)

 

(248.4)

 

(556.4)

 

595.8

 

(248.8)

Cash and cash equivalents at beginning of period

 

882.6

 

675.1

 

2,082.8

 

(920.9)

 

2,719.6

Cash and cash equivalents at end of period

$

842.8

$

426.7

$

1,526.4

$

(325.1)

$

2,470.8

Condensed Consolidating Financial Information, Shelf Registration Guarantor (Table)

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Financial Position

December 31, 2019

Principal Life

 

Principal

Principal

Insurance Company

Principal

 

Financial

Financial

and other

Financial

 

Group, Inc.

Services, Inc.

subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Assets

Fixed maturities, available-for-sale

$

265.8

$

$

69,840.4

$

$

70,106.2

Fixed maturities, trading

268.2

407.7

675.9

Equity securities

41.4

1,838.0

1,879.4

Mortgage loans

16,486.9

16,486.9

Real estate

1,714.8

1,714.8

Policy loans

798.0

798.0

Investment in unconsolidated entities

17,539.6

16,664.1

649.4

(34,022.9)

830.2

Other investments

10.4

251.9

3,597.7

3,860.0

Cash and cash equivalents

394.9

598.4

2,656.2

(1,133.6)

2,515.9

Accrued investment income

1.6

0.4

684.6

686.6

Premiums due and other receivables

100.0

1,961.1

(320.8)

1,740.3

Deferred acquisition costs

3,521.3

3,521.3

Property and equipment

967.7

967.7

Goodwill

618.5

1,075.3

1,693.8

Other intangibles

531.7

1,255.0

1,786.7

Separate account assets

165,468.0

165,468.0

Other assets

383.2

35.2

1,509.5

(571.8)

1,356.1

Total assets

$

18,863.7

$

18,841.6

$

274,431.6

$

(36,049.1)

$

276,087.8

Liabilities

Contractholder funds

$

$

$

41,367.5

$

$

41,367.5

Future policy benefits and claims

40,838.2

40,838.2

Other policyholder funds

959.4

959.4

Short-term debt

93.4

93.4

Long-term debt

3,625.5

320.7

108.7

(320.8)

3,734.1

Income taxes currently payable

66.4

(50.2)

16.2

Deferred income taxes

5.9

2,285.8

(495.1)

1,796.6

Separate account liabilities

165,468.0

165,468.0

Other liabilities

620.2

1,113.6

6,104.7

(974.8)

6,863.7

Total liabilities

4,245.7

1,440.2

257,292.1

(1,840.9)

261,137.1

Redeemable noncontrolling interest

264.9

264.9

Stockholders' equity

Common stock

4.8

11.0

(11.0)

4.8

Additional paid-in capital

10,182.6

9,658.3

12,157.9

(21,816.2)

10,182.6

Retained earnings

11,074.3

6,263.5

2,985.1

(9,248.6)

11,074.3

Accumulated other comprehensive income

1,037.9

1,479.6

1,654.8

(3,134.4)

1,037.9

Treasury stock, at cost

(7,681.6)

(2.0)

2.0

(7,681.6)

Total stockholders' equity attributable to PFG

14,618.0

17,401.4

16,806.8

(34,208.2)

14,618.0

Noncontrolling interest

67.8

67.8

Total stockholders' equity

14,618.0

17,401.4

16,874.6

(34,208.2)

14,685.8

Total liabilities and stockholders' equity

$

18,863.7

$

18,841.6

$

274,431.6

$

(36,049.1)

$

276,087.8

(1)

PFG sponsors nonqualified benefit plans. Nonqualified benefit plan assets and liabilities held in Rabbi trusts were $731.9 million and $593.7 million, respectively.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Financial Position

December 31, 2018

Principal Life

 

Principal

Principal

Insurance Company

Principal

 

Financial

Financial

and other

Financial

 

Group, Inc.

Services, Inc.

subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Assets

Fixed maturities, available-for-sale

$

211.5

$

$

59,897.0

$

$

60,108.5

Fixed maturities, trading

308.9

327.2

636.1

Equity securities

11.9

1,831.8

1,843.7

Mortgage loans

15,336.9

15,336.9

Real estate

1,729.7

1,729.7

Policy loans

801.4

801.4

Investment in unconsolidated entities

13,862.4

14,325.5

726.0

(28,045.1)

868.8

Other investments

10.7

100.9

3,329.9

3,441.5

Cash and cash equivalents

334.9

649.0

3,096.8

(1,103.2)

2,977.5

Accrued investment income

1.4

0.3

634.5

636.2

Premiums due and other receivables

0.5

1,779.6

(367.0)

1,413.1

Deferred acquisition costs

3,693.5

3,693.5

Property and equipment

767.3

767.3

Goodwill

1,100.0

1,100.0

Other intangibles

1,315.1

1,315.1

Separate account assets

144,987.9

144,987.9

Other assets

375.0

38.7

1,521.9

(556.7)

1,378.9

Total assets

$

15,104.8

$

15,126.8

$

242,876.5

$

(30,072.0)

$

243,036.1

Liabilities

Contractholder funds

$

$

$

39,699.7

$

$

39,699.7

Future policy benefits and claims

35,664.8

35,664.8

Other policyholder funds

888.4

888.4

Short-term debt

42.9

42.9

Long-term debt

3,129.8

366.7

129.9

(366.8)

3,259.6

Income taxes currently payable

9.8

61.5

(46.0)

25.3

Deferred income taxes

13.9

1,446.4

(501.9)

958.4

Separate account liabilities

144,987.9

144,987.9

Other liabilities

585.0

1,002.9

4,838.1

(764.1)

5,661.9

Total liabilities

3,714.8

1,393.3

227,759.6

(1,678.8)

231,188.9

Redeemable noncontrolling interest

391.2

391.2

Stockholders' equity

Common stock

4.8

11.0

(11.0)

4.8

Additional paid-in capital

10,060.7

9,100.0

12,004.5

(21,104.5)

10,060.7

Retained earnings

10,290.2

5,716.8

3,549.8

(9,266.6)

10,290.2

Accumulated other comprehensive loss

(1,565.1)

(1,083.3)

(903.6)

1,986.9

(1,565.1)

Treasury stock, at cost

(7,400.6)

(2.0)

2.0

(7,400.6)

Total stockholders' equity attributable to PFG

11,390.0

13,733.5

14,659.7

(28,393.2)

11,390.0

Noncontrolling interest

66.0

66.0

Total stockholders' equity

11,390.0

13,733.5

14,725.7

(28,393.2)

11,456.0

Total liabilities and stockholders' equity

$

15,104.8

$

15,126.8

$

242,876.5

$

(30,072.0)

$

243,036.1

(1)PFG sponsors nonqualified benefit plans. Nonqualified benefit plan assets and liabilities held in Rabbi trusts were $671.7 million and $542.4 million, respectively.

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2019

    

    

Principal Life

    

    

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

$

7,866.6

$

$

7,866.6

Fees and other revenues

205.9

4,215.5

(11.5)

4,409.9

Net investment income (loss)

19.4

(6.5)

3,975.1

10.4

3,998.4

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

12.3

17.5

(38.9)

(0.2)

(9.3)

Net other-than-temporary impairment losses on available-for-sale securities

(38.3)

(38.3)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

(5.2)

(5.2)

Net impairment losses on available-for-sale securities

(43.5)

(43.5)

Net realized capital gains (losses)

12.3

17.5

(82.4)

(0.2)

(52.8)

Total revenues

31.7

216.9

15,974.8

(1.3)

16,222.1

Expenses

Benefits, claims and settlement expenses

9,905.8

9,905.8

Dividends to policyholders

119.1

119.1

Operating expenses

210.9

368.2

3,935.1

(10.3)

4,503.9

Total expenses

210.9

368.2

13,960.0

(10.3)

14,528.8

Income (loss) before income taxes

(179.2)

(151.3)

2,014.8

9.0

1,693.3

Income taxes (benefits)

(44.2)

(11.8)

305.2

249.2

Equity in the net income of subsidiaries

1,529.2

1,659.7

(3,188.9)

Net income

1,394.2

1,520.2

1,709.6

(3,179.9)

1,444.1

Net income attributable to noncontrolling interest

49.9

49.9

Net income attributable to PFG

$

1,394.2

$

1,520.2

$

1,659.7

$

(3,179.9)

$

1,394.2

Net income

$

1,394.2

$

1,520.2

$

1,709.6

$

(3,179.9)

$

1,444.1

Other comprehensive income

2,570.9

2,530.9

2,562.2

(5,057.3)

2,606.7

Comprehensive income

$

3,965.1

$

4,051.1

$

4,271.8

$

(8,237.2)

$

4,050.8

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2018

    

    

Principal Life

    

    

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

$

6,409.6

$

$

6,409.6

Fees and other revenues

2.7

4,286.4

(15.3)

4,273.8

Net investment income (loss)

25.8

(6.7)

3,598.0

12.1

3,629.2

Net realized capital losses, excluding impairment losses on available-for-sale securities

(8.2)

(3.5)

(34.6)

(46.3)

Net other-than-temporary impairment recoveries on available-for-sale securities

10.6

10.6

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

(39.7)

(39.7)

Net impairment losses on available-for-sale securities

(29.1)

(29.1)

Net realized capital losses

(8.2)

(3.5)

(63.7)

(75.4)

Total revenues

17.6

(7.5)

14,230.3

(3.2)

14,237.2

Expenses

Benefits, claims and settlement expenses

8,192.5

8,192.5

Dividends to policyholders

123.6

123.6

Operating expenses

191.9

29.1

3,929.5

(13.8)

4,136.7

Total expenses

191.9

29.1

12,245.6

(13.8)

12,452.8

Income (loss) before income taxes

(174.3)

(36.6)

1,984.7

10.6

1,784.4

Income taxes (benefits)

(62.5)

0.2

293.0

230.7

Equity in the net income of subsidiaries

1,658.3

1,684.5

(3,342.8)

Net income

1,546.5

1,647.7

1,691.7

(3,332.2)

1,553.7

Net income attributable to noncontrolling interest

7.2

7.2

Net income attributable to PFG

$

1,546.5

$

1,647.7

$

1,684.5

$

(3,332.2)

$

1,546.5

Net income

$

1,546.5

$

1,647.7

$

1,691.7

$

(3,332.2)

$

1,553.7

Other comprehensive loss

(1,824.5)

(1,839.1)

(1,856.4)

3,684.3

(1,835.7)

Comprehensive loss

$

(278.0)

$

(191.4)

$

(164.7)

$

352.1

$

(282.0)

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2017

  

  

Principal Life

  

   

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Revenues

Premiums and other considerations

$

$

$

6,217.4

$

$

6,217.4

Fees and other revenues

 

7.8

0.2

3,894.7

(10.4)

3,892.3

Net investment income (loss)

 

9.7

(2.8)

3,396.5

55.9

3,459.3

Net realized capital gains (losses), excluding impairment losses on available-for-sale securities

 

(0.6)

4.2

602.4

606.0

Net other-than-temporary impairment losses on available-for-sale securities

 

(28.7)

(28.7)

Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income

 

(53.1)

(53.1)

Net impairment losses on available-for-sale securities

 

(81.8)

(81.8)

Net realized capital gains (losses)

 

(0.6)

4.2

520.6

524.2

Total revenues

 

16.9

1.6

14,029.2

45.5

14,093.2

Expenses

Benefits, claims and settlement expenses

 

7,822.6

7,822.6

Dividends to policyholders

 

124.6

124.6

Operating expenses

 

238.1

48.4

3,616.9

(9.6)

3,893.8

Total expenses

 

238.1

48.4

11,564.1

(9.6)

11,841.0

Income (loss) before income taxes

 

(221.2)

(46.8)

2,465.1

55.1

2,252.2

Income taxes (benefits)

 

63.1

115.4

(280.9)

30.1

(72.3)

Equity in the net income of subsidiaries

 

2,594.7

2,731.9

(5,326.6)

Net income

 

2,310.4

2,569.7

2,746.0

(5,301.6)

2,324.5

Net income attributable to noncontrolling interest

 

14.1

14.1

Net income attributable to PFG

$

2,310.4

$

2,569.7

$

2,731.9

$

(5,301.6)

$

2,310.4

Net income

$

2,310.4

$

2,569.7

$

2,746.0

$

(5,301.6)

$

2,324.5

Other comprehensive income

 

840.3

809.8

801.8

(1,607.6)

844.3

Comprehensive income

$

3,150.7

$

3,379.5

$

3,547.8

$

(6,909.2)

$

3,168.8

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2019

Principal Life

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

7.1

$

(54.7)

$

5,760.7

$

(219.9)

$

5,493.2

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

(251.5)

(0.2)

(13,885.4)

(14,137.1)

Sales

0.2

2,397.2

2,397.4

Maturities

200.0

6,864.2

7,064.2

Mortgage loans acquired or originated

(3,487.7)

(3,487.7)

Mortgage loans sold or repaid

2,335.9

2,335.9

Real estate acquired

(127.5)

(127.5)

Real estate sold

96.3

96.3

Net purchases of property and equipment

(0.1)

(2.0)

(130.3)

(132.4)

Purchase of business or interests in subsidiaries, net of cash acquired

(1,209.6)

1.1

(1,208.5)

Dividends and returns of capital received from unconsolidated entities

494.2

2,118.7

(2,612.9)

Net change in other investments

(34.0)

(362.9)

(235.8)

143.6

(489.1)

Net cash provided by (used in) investing activities

408.6

544.2

(6,172.0)

(2,469.3)

(7,688.5)

Financing activities

Issuance of common stock

37.7

37.7

Acquisition of treasury stock

(281.0)

(281.0)

Payments for financing element derivatives

(26.9)

(26.9)

Purchase of subsidiary shares from noncontrolling interest

(1.7)

(1.7)

Dividends to common stockholders

(606.0)

(606.0)

Issuance of long-term debt

493.6

10.0

11.3

(10.0)

504.9

Principal repayments of long-term debt

(55.9)

(32.2)

55.9

(32.2)

Net proceeds from short-term borrowings

57.5

57.5

Dividends and capital paid to parent

(494.2)

(2,118.7)

2,612.9

Investment contract deposits

9,200.0

9,200.0

Investment contract withdrawals

(7,747.7)

(7,747.7)

Net increase in banking operation deposits

623.4

623.4

Other

5.7

5.7

Net cash provided by (used in) financing activities

(355.7)

(540.1)

(29.3)

2,658.8

1,733.7

Net increase (decrease) in cash and cash equivalents

60.0

(50.6)

(440.6)

(30.4)

(461.6)

Cash and cash equivalents at beginning of period

 

334.9

649.0

3,096.8

(1,103.2)

2,977.5

Cash and cash equivalents at end of period

$

394.9

$

598.4

$

2,656.2

$

(1,133.6)

$

2,515.9

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2018

    

    

    

    

    

Principal Life

    

    

    

    

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

   

parent only

   

only

   

combined (1)

   

Eliminations

   

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

(132.4)

$

696.3

$

5,030.9

$

(438.3)

$

5,156.5

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

(210.9)

(13,698.9)

(13,909.8)

Sales

3,813.1

3,813.1

Maturities

2.3

6,215.3

6,217.6

Mortgage loans acquired or originated

(3,447.5)

(3,447.5)

Mortgage loans sold or repaid

2,228.4

2,228.4

Real estate acquired

(88.1)

(88.1)

Real estate sold

63.5

63.5

Net purchases of property and equipment

(0.1)

(92.2)

(92.3)

Purchase of business or interests in subsidiaries, net of cash acquired

(184.7)

(184.7)

Dividends and returns of capital received from unconsolidated entities

1,041.6

589.1

(1,630.7)

Net change in other investments

(2.2)

(166.2)

(413.9)

279.6

(302.7)

Net cash provided by (used in) investing activities

830.7

422.9

(5,605.0)

(1,351.1)

(5,702.5)

Financing activities

Issuance of common stock

64.0

64.0

Acquisition of treasury stock

(671.6)

(671.6)

Payments for financing element derivatives

(65.9)

(65.9)

Purchase of subsidiary shares from noncontrolling interest

(31.1)

(31.1)

Dividends to common stockholders

(598.6)

(598.6)

Issuance of long-term debt

11.1

80.8

(11.1)

80.8

Principal repayments of long-term debt

(57.1)

(1.3)

57.1

(1.3)

Net proceeds from short-term borrowings

8.5

8.5

Dividends and capital paid to parent

(1,041.6)

(589.1)

1,630.7

Investment contract deposits

8,308.8

8,308.8

Investment contract withdrawals

(6,589.6)

(6,589.6)

Net increase in banking operation deposits

553.0

553.0

Other

(4.3)

(4.3)

Net cash provided by (used in) financing activities

(1,206.2)

(1,087.6)

1,669.8

1,676.7

1,052.7

Net increase (decrease) in cash and cash equivalents

(507.9)

31.6

1,095.7

(112.7)

506.7

Cash and cash equivalents at beginning of period

 

842.8

 

617.4

 

2,001.1

 

(990.5)

 

2,470.8

Cash and cash equivalents at end of period

$

334.9

$

649.0

$

3,096.8

$

(1,103.2)

$

2,977.5

21. Condensed Consolidating Financial Information – (continued)

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2017

    

    

    

Principal Life

    

    

 

Principal

Principal

Insurance

Principal

 

Financial

Financial

Company and

Financial

 

Group, Inc.

Services, Inc.

other subsidiaries

Group, Inc.

 

    

parent only

    

only

    

combined (1)

    

Eliminations

    

consolidated

   

(in millions)

 

Operating activities

Net cash provided by (used in) operating activities

$

(443.2)

$

(252.8)

$

4,483.6

$

400.4

$

4,188.0

Investing activities

Fixed maturities available-for-sale and equity securities with intent to hold:

Purchases

 

(13,371.6)

(13,371.6)

Sales

 

1,413.6

1,413.6

Maturities

 

8,743.2

8,743.2

Mortgage loans acquired or originated

 

(2,755.8)

(2,755.8)

Mortgage loans sold or repaid

 

1,872.0

1,872.0

Real estate acquired

 

(200.5)

(200.5)

Real estate sold

481.9

481.9

Net purchases of property and equipment

 

(0.1)

(164.7)

(164.8)

Dividends and returns of capital received from unconsolidated entities

 

1,002.5

691.2

(1,693.7)

Net change in other investments

 

(1.1)

7.5

(61.6)

(15.6)

(70.8)

Net cash provided by (used in) investing activities

 

1,001.3

698.7

(4,043.5)

(1,709.3)

(4,052.8)

Financing activities

Issuance of common stock

 

162.5

162.5

Acquisition of treasury stock

 

(220.4)

(220.4)

Proceeds from financing element derivatives

 

0.1

0.1

Payments for financing element derivatives

 

(77.6)

(77.6)

Purchase of subsidiary shares from noncontrolling interest

 

(13.3)

(13.3)

Dividends to common stockholders

 

(540.0)

(540.0)

Issuance of long-term debt

 

9.4

2.8

(9.4)

2.8

Principal repayments of long-term debt

 

(38.8)

(56.5)

38.8

(56.5)

Net repayments of short-term

borrowings

 

(92.0)

76.5

(15.5)

Dividends and capital paid to parent

 

(1,002.5)

(691.2)

1,693.7

Investment contract deposits

 

10,154.4

10,154.4

Investment contract withdrawals

 

(9,914.6)

(9,914.6)

Net increase in banking operation deposits

 

136.6

136.6

Other

 

(2.5)

(2.5)

Net cash used in financing activities

 

(597.9)

(1,031.9)

(553.8)

1,799.6

(384.0)

Net decrease in cash and cash equivalents

 

(39.8)

(586.0)

(113.7)

490.7

(248.8)

Cash and cash equivalents at beginning of period

 

882.6

 

1,203.4

 

2,114.8

 

(1,481.2)

 

2,719.6

Cash and cash equivalents at end of period

$

842.8

$

617.4

$

2,001.1

$

(990.5)

$

2,470.8

v3.19.3.a.u2
Nature of Operations and Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 01, 2019
Jan. 01, 2018
Dec. 31, 2019
Dec. 31, 2018
Recent Accounting Pronouncements        
Assets     $ 276,087.8 $ 243,036.1
Liabilities     261,137.1 231,188.9
Package of practical expedients permitted under transition guidance true      
Hindsight practical expedient to determine the lease term for existing leases true      
ASU 2018-02 - Reclassification of certain tax effects | Accumulated other comprehensive income (loss)        
Recent Accounting Pronouncements        
Cumulative effect adjustment from adopting guidance   $ 77.6   77.6
ASU 2018-02 - Reclassification of certain tax effects | Retained earnings (accumulated deficit)        
Recent Accounting Pronouncements        
Cumulative effect adjustment from adopting guidance   (77.6)   (77.6)
ASU 2014-09 - Revenue recognition        
Recent Accounting Pronouncements        
Cumulative effect adjustment from adopting guidance   (39.7)   (39.7)
ASU 2014-09 - Revenue recognition | Accumulated other comprehensive income (loss)        
Recent Accounting Pronouncements        
Cumulative effect adjustment from adopting guidance       25.6
ASU 2014-09 - Revenue recognition | Retained earnings (accumulated deficit)        
Recent Accounting Pronouncements        
Cumulative effect adjustment from adopting guidance       (65.0)
ASU 2016-16 - Intra-entity asset transfer taxes        
Recent Accounting Pronouncements        
Cumulative effect adjustment, increase to retained earnings   8.7   8.7
Cumulative effect adjustment, decrease to other assets   21.1    
Cumulative effect adjustment, decrease to deferred income taxes   29.8    
ASU 2016-16 - Intra-entity asset transfer taxes | Retained earnings (accumulated deficit)        
Recent Accounting Pronouncements        
Cumulative effect adjustment, increase to retained earnings       8.7
ASU 2016-01 - Equity investments | Accumulated other comprehensive income (loss)        
Recent Accounting Pronouncements        
Cumulative effect adjustment from adopting guidance   (1.0)   (1.0)
ASU 2016-01 - Equity investments | Retained earnings (accumulated deficit)        
Recent Accounting Pronouncements        
Cumulative effect adjustment from adopting guidance   $ 1.0   $ 1.0
ASU 2016-02 - Leases        
Recent Accounting Pronouncements        
Cumulative effect adjustment, increase to retained earnings $ 4.0      
Cumulative effect adjustment from adopting guidance     4.0  
ASU 2016-02 - Leases | Adjustment for adoption of guidance        
Recent Accounting Pronouncements        
Assets 168.8      
Liabilities $ 164.0      
ASU 2016-02 - Leases | Retained earnings (accumulated deficit)        
Recent Accounting Pronouncements        
Cumulative effect adjustment from adopting guidance     $ 4.0  
v3.19.3.a.u2
Nature of Operations and Significant Accounting Policies - Cash and Cash Equivalents, Investments (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Cash and Cash Equivalents    
Maximum maturity period when purchased for investments to be included in cash and cash equivalents 3 months  
Investments    
Real estate held for sale $ 169.8 $ 209.6
v3.19.3.a.u2
Nature of Operations and Significant Accounting Policies - Contractholder and Policyholder Liabilities (Details) - Individual Life insurance
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Contractholder and Policyholder Liabilities      
Participating business as a percentage of life insurance in force (as a percent) 6.00% 7.00% 7.00%
Participating business as a percentage of life insurance policies in force (as a percent) 23.00% 26.00% 29.00%
Participating business as a percentage of life insurance premiums (as a percent) 21.00% 24.00% 30.00%
v3.19.3.a.u2
Nature of Operations and Significant Accounting Policies - Other Various Policies (Details)
$ in Millions
12 Months Ended
Dec. 31, 2019
USD ($)
Counterparty
Dec. 31, 2018
USD ($)
Counterparty
Dec. 31, 2017
USD ($)
Long-Term Debt      
Minimum maturity period at date of issuance for debt to be classified as long-term 1 year    
Reinsurance      
Net ceded reinsurance recoverables related to claims received $ 465.5 $ 450.6  
Amount of net ceded reinsurance recoverables related to claims received with five largest ceded reinsurers $ 457.2 $ 435.6  
Percentage of net ceded reinsurance recoverables related to claims received with five largest ceded reinsurers (as a percent) 98.00% 97.00%  
Number of largest ceded reinsurers | Counterparty 5 5  
Total amount recoverable from reinsurers $ 961.4 $ 920.8  
Premiums and other considerations:      
Premiums and other considerations, Direct 8,428.1 6,928.3 $ 6,699.3
Premiums and other considerations, Assumed 1.6 1.7 1.9
Premiums and other considerations, Ceded (563.1) (520.4) (483.8)
Premiums and other considerations 7,866.6 6,409.6 6,217.4
Benefits, claims and settlement expenses:      
Benefits, claims and settlement expenses, Direct 10,463.6 8,667.7 8,216.3
Benefits, claims and settlement expenses, Assumed 23.1 24.9 27.7
Benefits, claims and settlement expenses, Ceded (580.9) (500.1) (421.4)
Benefits, claims and settlement expenses 9,905.8 8,192.5 $ 7,822.6
Separate Accounts      
Separate account that primarily includes shares of Principal Financial Group, Inc. stock that were allocated and issued to eligible participants of qualified employee benefit plans as part of the 2001 demutualization $ 100.4 $ 94.9  
v3.19.3.a.u2
Goodwill and Other Intangible Assets - Changes in Goodwill (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Changes in Goodwill    
Beginning balance, Goodwill $ 1,100.0 $ 1,068.8
Goodwill from acquisitions 623.9 113.9
Goodwill disposed   (12.0)
Foreign currency, Goodwill (30.1) (70.7)
Ending balance, Goodwill 1,693.8 1,100.0
Retirement and Income Solutions    
Changes in Goodwill    
Beginning balance, Goodwill 57.4 57.4
Goodwill from acquisitions 618.5  
Ending balance, Goodwill 675.9 57.4
Principal Global Investors    
Changes in Goodwill    
Beginning balance, Goodwill 307.3 247.3
Goodwill from acquisitions 6.5 65.0
Foreign currency, Goodwill 1.5 (5.0)
Other, Goodwill 2.2  
Ending balance, Goodwill 317.5 307.3
Principal International    
Changes in Goodwill    
Beginning balance, Goodwill 676.6 707.5
Goodwill from acquisitions   46.8
Goodwill disposed   (12.0)
Foreign currency, Goodwill (31.6) (65.7)
Other, Goodwill (2.2)  
Ending balance, Goodwill 642.8 676.6
U.S. Insurance Solutions    
Changes in Goodwill    
Beginning balance, Goodwill 56.6 56.6
Ending balance, Goodwill 56.6 56.6
Corporate    
Changes in Goodwill    
Beginning balance, Goodwill 2.1  
Goodwill from acquisitions (1.1) 2.1
Ending balance, Goodwill $ 1.0 $ 2.1
v3.19.3.a.u2
Goodwill and Other Intangible Assets - Goodwill Acquired (Details) - USD ($)
$ in Millions
12 Months Ended
Jul. 01, 2019
Dec. 31, 2019
Dec. 31, 2018
Goodwill and Other Intangible Assets      
Goodwill from acquisitions   $ 623.9 $ 113.9
Institutional Retirement & Trust business of Wells Fargo Bank      
Goodwill and Other Intangible Assets      
Purchase price of acquired business in the form of cash to be paid at the closing $ 1,200.0    
Maximum additional earn-out payment based upon retention of fee revenue 150.0    
Goodwill from acquisitions 618.5    
Customer relationships | Institutional Retirement & Trust business of Wells Fargo Bank      
Goodwill and Other Intangible Assets      
Finite lived intangible assets acquired $ 510.3    
Finite lived intangible asset, useful life 23 years    
Technology | Institutional Retirement & Trust business of Wells Fargo Bank      
Goodwill and Other Intangible Assets      
Finite lived intangible assets acquired $ 35.4    
Finite lived intangible asset, useful life 6 years    
v3.19.3.a.u2
Goodwill and Other Intangible Assets - Finite-Lived Intangible Assets (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Goodwill and Other Intangible Assets      
Weighted average remaining expected life of finite lived intangible assets 18 years    
Gross carrying amount $ 1,346.3 $ 810.2  
Accumulated amortization 343.2 288.4  
Net carrying amount 1,003.1 521.8  
Amortization expense for intangible assets with finite useful lives 62.8 $ 53.9 $ 45.4
Estimated amortization expense for the next five years      
Year 1: Finite lived intangible assets amortization 74.5    
Year 2: Finite lived intangible assets amortization 73.2    
Year 3: Finite lived intangible assets amortization 72.4    
Year 4: Finite lived intangible assets amortization 70.2    
Year 5: Finite lived intangible assets amortization $ 69.0    
v3.19.3.a.u2
Goodwill and Other Intangible Assets - Indefinite-Lived Intangible Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Indefinite Lived Intangible Assets    
Net carrying amount of unamortized indefinite lived intangible assets $ 783.6 $ 793.3
WM Advisors, Inc.    
Indefinite Lived Intangible Assets    
Net carrying amount of unamortized indefinite lived intangible assets $ 608.0 $ 608.0
v3.19.3.a.u2
Variable Interest Entities - Consolidated VIEs (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Carrying amounts of consolidated VIE assets and liabilities        
Total assets $ 276,087.8 $ 243,036.1    
Total liabilities 261,137.1 231,188.9    
Redeemable noncontrolling interest 264.9 391.2 $ 101.3 $ 97.5
Aggregate consolidated variable interest entities        
Carrying amounts of consolidated VIE assets and liabilities        
Total assets 40,802.1 38,922.8    
Total liabilities 39,713.7 37,742.9    
Redeemable noncontrolling interest 215.4 325.7    
Grantor trust        
Carrying amounts of consolidated VIE assets and liabilities        
Total assets 99.9 95.0    
Total liabilities 98.6 89.4    
Commercial mortgage-backed securities VIE        
Carrying amounts of consolidated VIE assets and liabilities        
Total assets   6.4    
Mandatory retirement savings funds        
Carrying amounts of consolidated VIE assets and liabilities        
Total assets 39,891.1 37,915.7    
Total liabilities 39,524.9 37,579.3    
Real estate VIE        
Carrying amounts of consolidated VIE assets and liabilities        
Total assets 479.7 379.2    
Total liabilities 88.0 70.6    
Sponsored investment funds        
Carrying amounts of consolidated VIE assets and liabilities        
Total assets 331.4 526.5    
Total liabilities 2.2 3.6    
Redeemable noncontrolling interest $ 215.4 $ 325.7    
v3.19.3.a.u2
Variable Interest Entities - Unconsolidated VIEs (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Money Market Funds    
Total assets of unconsolidated money market mutual funds $ 4,000.0 $ 3,000.0
Corporate debt securities | Available-for-sale    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 238.2 235.3
Maximum exposure to loss 225.7 222.6
Residential mortgage-backed pass-through securities | Available-for-sale    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 2,982.4 2,460.6
Maximum exposure to loss 2,913.9 2,488.5
Residential mortgage-backed pass-through securities | Trading    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 282.3 322.6
Maximum exposure to loss 282.3 322.6
Commercial mortgage-backed securities | Available-for-sale    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 4,850.2 3,945.6
Maximum exposure to loss 4,746.6 4,023.1
Commercial mortgage-backed securities | Trading    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 28.2 13.8
Maximum exposure to loss 28.2 13.8
Collateralized debt obligations | Available-for-sale    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 3,215.3 2,420.8
Maximum exposure to loss 3,226.7 2,451.3
Collateralized debt obligations | Trading    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 20.9 11.8
Maximum exposure to loss 20.9 11.8
Other debt obligations | Available-for-sale    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 8,191.1 7,153.2
Maximum exposure to loss 8,076.4 7,196.6
Other debt obligations | Trading    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 13.2 9.7
Maximum exposure to loss 13.2 9.7
Equity securities    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 123.2 103.9
Maximum exposure to loss 123.2 103.9
Other investments: Other limited partnership and fund interests    
Unconsolidated Variable Interest Entity disclosures    
Asset carrying value 911.9 737.5
Maximum exposure to loss 1,467.0 1,432.2
Fully secured debt of international real estate funds with recourse to the investment manager, included in maximum loss exposure $ 129.1 $ 132.2
v3.19.3.a.u2
Investments - Fixed Maturities and Equity Securities (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Available-for-sale securities    
Amortized cost, fixed maturities $ 65,302.5 $ 59,725.8
Gross unrealized gains, fixed maturities 4,927.7 1,612.4
Gross unrealized losses, fixed maturities 124.0 1,229.7
Fair value, fixed maturities 70,106.2 60,108.5
Other-than-temporary impairments in AOCI 48.4 53.6
Net unrealized gains (losses) on impaired fixed maturities, available-for-sale related to changes in fair value subsequent to the impairment date 62.3 64.2
U.S. government and agencies    
Available-for-sale securities    
Amortized cost, fixed maturities 1,627.0 1,441.6
Gross unrealized gains, fixed maturities 100.2 16.4
Gross unrealized losses, fixed maturities 3.0 17.0
Fair value, fixed maturities 1,724.2 1,441.0
Non-U.S. governments    
Available-for-sale securities    
Amortized cost, fixed maturities 852.3 833.4
Gross unrealized gains, fixed maturities 144.1 71.7
Gross unrealized losses, fixed maturities 0.2 14.6
Fair value, fixed maturities 996.2 890.5
States and political subdivisions    
Available-for-sale securities    
Amortized cost, fixed maturities 6,857.1 6,125.0
Gross unrealized gains, fixed maturities 644.5 196.0
Gross unrealized losses, fixed maturities 11.6 95.3
Fair value, fixed maturities 7,490.0 6,225.7
Corporate debt securities    
Available-for-sale securities    
Amortized cost, fixed maturities 36,993.1 35,134.6
Gross unrealized gains, fixed maturities 3,706.5 1,249.9
Gross unrealized losses, fixed maturities 52.2 845.2
Fair value, fixed maturities 40,647.4 35,539.3
Residential mortgage-backed pass-through securities    
Available-for-sale securities    
Amortized cost, fixed maturities 2,913.9 2,488.5
Gross unrealized gains, fixed maturities 72.3 21.9
Gross unrealized losses, fixed maturities 3.8 49.8
Fair value, fixed maturities 2,982.4 2,460.6
Commercial mortgage-backed securities    
Available-for-sale securities    
Amortized cost, fixed maturities 4,746.6 4,023.1
Gross unrealized gains, fixed maturities 127.6 17.1
Gross unrealized losses, fixed maturities 24.0 94.6
Fair value, fixed maturities 4,850.2 3,945.6
Other-than-temporary impairments in AOCI 15.8 16.3
Collateralized debt obligations    
Available-for-sale securities    
Amortized cost, fixed maturities 3,226.7 2,451.3
Gross unrealized gains, fixed maturities 2.9  
Gross unrealized losses, fixed maturities 14.3 30.5
Fair value, fixed maturities 3,215.3 2,420.8
Other-than-temporary impairments in AOCI 0.9 1.2
Other debt obligations    
Available-for-sale securities    
Amortized cost, fixed maturities 8,085.8 7,228.3
Gross unrealized gains, fixed maturities 129.6 39.4
Gross unrealized losses, fixed maturities 14.9 82.7
Fair value, fixed maturities 8,200.5 7,185.0
Other-than-temporary impairments in AOCI $ 31.7 $ 36.1
v3.19.3.a.u2
Investments - Amortization by Expected Maturity (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Amortized cost of fixed maturities available-for-sale    
Due in one year or less $ 2,138.3  
Due after one year through five years 9,955.3  
Due after five years through ten years 12,080.0  
Due after ten years 22,155.9  
Subtotal 46,329.5  
Mortgage-backed and other asset-backed securities 18,973.0  
Amortized cost, fixed maturities 65,302.5 $ 59,725.8
Fair value of fixed maturities available-for-sale    
Due in one year or less 2,154.0  
Due after one year through five years 10,319.2  
Due after five years through ten years 12,894.4  
Due after ten years 25,490.2  
Subtotal 50,857.8  
Mortgage-backed and other asset-backed securities 19,248.4  
Fair value, fixed maturities $ 70,106.2 $ 60,108.5
v3.19.3.a.u2
Investments - Net Investment Income (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Major categories of net investment income      
Gross investment income (loss) $ 4,116.5 $ 3,731.6 $ 3,548.6
Investment expenses (118.1) (102.4) (89.3)
Net investment income (loss) 3,998.4 3,629.2 3,459.3
Fixed maturities | Available-for-sale      
Major categories of net investment income      
Gross investment income (loss) 2,606.0 2,479.9 2,342.3
Fixed maturities | Trading      
Major categories of net investment income      
Gross investment income (loss) 23.8 26.4 12.6
Equity securities      
Major categories of net investment income      
Gross investment income (loss) 110.5 38.8  
Equity securities | Available-for-sale      
Major categories of net investment income      
Gross investment income (loss)     21.7
Equity securities | Trading      
Major categories of net investment income      
Gross investment income (loss)     46.1
Mortgage loans      
Major categories of net investment income      
Gross investment income (loss) 707.0 641.4 605.9
Real estate      
Major categories of net investment income      
Gross investment income (loss) 191.1 158.8 129.4
Policy loans      
Major categories of net investment income      
Gross investment income (loss) 44.0 45.0 45.6
Cash and cash equivalents      
Major categories of net investment income      
Gross investment income (loss) 65.3 56.2 28.6
Derivatives      
Major categories of net investment income      
Gross investment income (loss) (2.0) 0.1 (3.2)
Other investment types      
Major categories of net investment income      
Gross investment income (loss) $ 370.8 $ 285.0 $ 319.6
v3.19.3.a.u2
Investments - Net Realized Capital Gains and Losses (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Major components of net realized capital gains (losses) on investments      
Fixed maturities, available-for-sale: Gross gains $ 15.5 $ 40.2 $ 14.7
Fixed maturities, available-for-sale: Gross losses (15.3) (74.8) (27.2)
Fixed maturities, available-for-sale: Net impairment recoveries (losses) (43.5) (29.1)  
Fixed maturities, available-for-sale: Hedging, net (9.3) (39.6) (28.5)
Fixed maturities, trading 43.0 (9.0) (8.0)
Equity securities, available-for-sale: Gross gains     0.2
Net impairment (losses) recoveries on available-for-sale securities     (81.8)
Equity securities, trading     65.0
Equity securities 84.5 (17.7)  
Net realized capital gains (losses) (52.8) (75.4) 524.2
Unrealized gains (losses) on fixed maturities, trading 32.8 (12.2) (7.5)
Unrealized gains (losses) on equity securities, trading     45.3
Unrealized gains (losses) on equity securities, trading reported in net investment income     34.9
Unrealized gains (losses) on equity securities 61.6 (39.9)  
Unrealized gains (losses) on equity securities reported in net investment income 66.9 4.9  
Proceeds from sales of investments      
Proceeds from sales of investments in fixed maturities, available-for-sale 1,654.8 3,067.2 1,345.8
Fixed maturities      
Major components of net realized capital gains (losses) on investments      
Fixed maturities, available-for-sale: Net impairment recoveries (losses)   (29.1) (81.7)
Equity securities      
Major components of net realized capital gains (losses) on investments      
Net impairment (losses) recoveries on available-for-sale securities     (0.1)
Mortgage loans      
Major components of net realized capital gains (losses) on investments      
Realized capital gains (losses) 3.0 6.2 9.0
Derivatives      
Major components of net realized capital gains (losses) on investments      
Realized capital gains (losses) (120.3) 11.7 (149.8)
Other investment types      
Major components of net realized capital gains (losses) on investments      
Realized capital gains (losses) $ (10.4) $ 36.7 $ 730.6
v3.19.3.a.u2
Investments - Other-Than-Temporary Impairments (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Other-than-temporary impairment losses, net of recoveries      
Net other-than-temporary impairment (losses) recoveries $ (38.3) $ 10.6 $ (28.7)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income (5.2) (39.7) (53.1)
Net impairment (losses) recoveries on available-for-sale securities (43.5) (29.1)  
Net impairment (losses) recoveries on available-for-sale securities     (81.8)
Fixed maturities      
Other-than-temporary impairment losses, net of recoveries      
Net other-than-temporary impairment (losses) recoveries $ (38.3) 10.6 (28.6)
Net impairment (losses) recoveries on available-for-sale securities   $ (29.1) (81.7)
Equity securities      
Other-than-temporary impairment losses, net of recoveries      
Net other-than-temporary impairment (losses) recoveries     (0.1)
Net impairment (losses) recoveries on available-for-sale securities     $ (0.1)
v3.19.3.a.u2
Investments - Accumulated Credit Losses for Fixed Maturities with Bifurcated Credit Losses (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Other-Than-Temporary Impairment Credit Losses Recognized in Net Income - Rollforward      
Beginning balance $ (117.5) $ (124.3) $ (139.9)
Credit losses for which an other-than-temporary impairment was not previously recognized (6.8) (11.3) (15.0)
Credit losses for which an other-than-temporary impairment was previously recognized (11.8) (20.0) (42.5)
Reduction for credit losses previously recognized on fixed maturities now sold, paid down or intended to be sold 54.3 29.5 63.3
Net reduction (increase) for positive changes in cash flows expected to be collected and amortization 0.8 8.6 10.0
Foreign currency translation adjustment     (0.2)
Ending balance $ (81.0) $ (117.5) $ (124.3)
v3.19.3.a.u2
Investments - Gross Unrealized Losses for Fixed Maturities (Details)
$ in Millions
Dec. 31, 2019
USD ($)
item
Dec. 31, 2018
USD ($)
item
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value $ 5,390.1 $ 19,116.1
Fixed maturities, Less than twelve months, Gross unrealized losses 63.0 557.7
Fixed maturities, Greater than or equal to twelve months, Fair value 3,134.9 16,608.2
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses 61.0 672.0
Fixed maturities, Total, Fair value 8,525.0 35,724.3
Fixed maturities, Total, Gross unrealized losses 124.0 1,229.7
U.S. government and agencies    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value 100.0 101.8
Fixed maturities, Less than twelve months, Gross unrealized losses 1.9 1.6
Fixed maturities, Greater than or equal to twelve months, Fair value 74.2 500.3
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses 1.1 15.4
Fixed maturities, Total, Fair value 174.2 602.1
Fixed maturities, Total, Gross unrealized losses 3.0 17.0
Non-U.S. governments    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value 17.6 210.2
Fixed maturities, Less than twelve months, Gross unrealized losses 0.2 4.7
Fixed maturities, Greater than or equal to twelve months, Fair value 12.4 191.5
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses   9.9
Fixed maturities, Total, Fair value 30.0 401.7
Fixed maturities, Total, Gross unrealized losses 0.2 14.6
States and political subdivisions    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value 559.9 1,359.9
Fixed maturities, Less than twelve months, Gross unrealized losses 11.2 33.9
Fixed maturities, Greater than or equal to twelve months, Fair value 86.3 1,590.3
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses 0.4 61.4
Fixed maturities, Total, Fair value 646.2 2,950.2
Fixed maturities, Total, Gross unrealized losses 11.6 95.3
Corporate debt securities    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value 1,041.5 13,198.4
Fixed maturities, Less than twelve months, Gross unrealized losses 27.8 476.0
Fixed maturities, Greater than or equal to twelve months, Fair value 394.7 6,865.0
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses 24.4 369.2
Fixed maturities, Total, Fair value 1,436.2 20,063.4
Fixed maturities, Total, Gross unrealized losses 52.2 845.2
Residential mortgage-backed pass-through securities    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value 429.6 236.7
Fixed maturities, Less than twelve months, Gross unrealized losses 1.4 1.0
Fixed maturities, Greater than or equal to twelve months, Fair value 237.3 1,410.2
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses 2.4 48.8
Fixed maturities, Total, Fair value 666.9 1,646.9
Fixed maturities, Total, Gross unrealized losses 3.8 49.8
Commercial mortgage-backed securities    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value 829.3 790.3
Fixed maturities, Less than twelve months, Gross unrealized losses 9.2 11.6
Fixed maturities, Greater than or equal to twelve months, Fair value 268.5 2,223.2
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses 14.8 83.0
Fixed maturities, Total, Fair value 1,097.8 3,013.5
Fixed maturities, Total, Gross unrealized losses 24.0 94.6
Collateralized debt obligations    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value 639.4 2,233.3
Fixed maturities, Less than twelve months, Gross unrealized losses 1.8 24.0
Fixed maturities, Greater than or equal to twelve months, Fair value 1,447.8 162.6
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses 12.5 6.5
Fixed maturities, Total, Fair value 2,087.2 2,395.9
Fixed maturities, Total, Gross unrealized losses 14.3 30.5
Other debt obligations    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value 1,772.8 985.5
Fixed maturities, Less than twelve months, Gross unrealized losses 9.5 4.9
Fixed maturities, Greater than or equal to twelve months, Fair value 613.7 3,665.1
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses 5.4 77.8
Fixed maturities, Total, Fair value 2,386.5 4,650.6
Fixed maturities, Total, Gross unrealized losses 14.9 82.7
Principal Life Insurance Company    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Less than twelve months, Fair value 5,302.7 18,764.0
Fixed maturities, Less than twelve months, Gross unrealized losses 44.0 541.3
Fixed maturities, Greater than or equal to twelve months, Fair value 3,078.0 16,287.9
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses 59.9 661.6
Fixed maturities, Total, Fair value 8,380.7 35,051.9
Fixed maturities, Total, Gross unrealized losses $ 103.9 $ 1,202.9
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure    
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Percent Investment Grade (as a percent) 97.00% 95.00%
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Average Price (percent of carrying value to amortized cost) | item 99 97
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less Than Twelve Months | item 882 2,076
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Less Than Twelve Months (percent of carrying value to amortized cost) | item 99 97
Available-for-sale Securities in Unrealized Loss Positions, Percent Investment Grade, Less Than Twelve Months (as a percent) 98.00% 92.00%
Available-for-sale Securities in Unrealized Loss Position, Aggregate Losses On Investment Grade Investments, Less Than Twelve Months $ 43.1 $ 473.7
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Twelve Months or Longer | item 502 2,335
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | item 98 96
Principal Life Insurance Company | Corporate debt securities    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses $ 23.6 $ 360.4
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure    
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | item 94 95
Principal Life Insurance Company | Commercial mortgage-backed securities    
Gross Unrealized Losses for Fixed Maturities    
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses $ 14.6 $ 82.2
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure    
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | item 95 96
v3.19.3.a.u2
Investments - Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments    
Net unrealized gains (losses) on fixed maturities, available-for-sale $ 4,834.2 $ 400.8
Noncredit component of impairment losses on fixed maturities, available-for-sale (48.4) (53.6)
Net unrealized gains (losses) on derivative instruments 94.1 118.5
Adjustments for assumed changes in amortization patterns (261.0) 30.3
Adjustments for assumed changes in policyholder liabilities (1,133.5) (293.7)
Net unrealized gains (losses) on other investments and noncontrolling interest adjustments 96.8 68.8
Provision for deferred income tax benefits (taxes) (766.9) (63.8)
Net unrealized gains (losses) on available-for-sale securities and derivative instruments $ 2,815.3 $ 207.3
v3.19.3.a.u2
Investments - Mortgage Loans (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 16,513.9 $ 15,364.3 $ 14,183.2  
Mortgage loan valuation allowance (27.0) (27.4) (32.7) $ (44.9)
Mortgage loans, Total carrying value 16,486.9 15,336.9    
Commercial mortgage loans        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost 15,017.2 13,996.3 12,897.3  
Mortgage loan valuation allowance (24.5) (24.3) (25.8) (27.4)
Mortgage loans, purchased 200.5 127.5 144.2  
Mortgage loans, sold $ 1.6 $ 2.2 28.9  
Percent of mortgage loans (as a percent) 100.00% 100.00%    
Commercial mortgage loans | Office        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 4,887.1 $ 4,625.8    
Percent of mortgage loans (as a percent) 32.60% 33.00%    
Commercial mortgage loans | Retail        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 2,052.6 $ 2,305.6    
Percent of mortgage loans (as a percent) 13.70% 16.50%    
Commercial mortgage loans | Industrial        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 2,268.5 $ 2,312.9    
Percent of mortgage loans (as a percent) 15.10% 16.50%    
Commercial mortgage loans | Apartments        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 5,246.9 $ 4,250.5    
Percent of mortgage loans (as a percent) 34.90% 30.40%    
Commercial mortgage loans | Hotel        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 90.8 $ 99.8    
Percent of mortgage loans (as a percent) 0.60% 0.70%    
Commercial mortgage loans | Mixed use/other        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 471.3 $ 401.7    
Percent of mortgage loans (as a percent) 3.10% 2.90%    
Commercial mortgage loans | New England        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 613.9 $ 640.6    
Percent of mortgage loans (as a percent) 4.10% 4.60%    
Commercial mortgage loans | Middle Atlantic        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 4,139.7 $ 3,927.3    
Percent of mortgage loans (as a percent) 27.50% 28.00%    
Commercial mortgage loans | East North Central        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 624.5 $ 592.8    
Percent of mortgage loans (as a percent) 4.20% 4.20%    
Commercial mortgage loans | West North Central        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 237.2 $ 205.8    
Percent of mortgage loans (as a percent) 1.60% 1.50%    
Commercial mortgage loans | South Atlantic        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 2,318.4 $ 2,206.5    
Percent of mortgage loans (as a percent) 15.40% 15.80%    
Commercial mortgage loans | East South Central        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 438.5 $ 422.5    
Percent of mortgage loans (as a percent) 2.90% 3.00%    
Commercial mortgage loans | West South Central        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 1,450.0 $ 1,213.8    
Percent of mortgage loans (as a percent) 9.70% 8.70%    
Commercial mortgage loans | Mountain        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 931.8 $ 968.6    
Percent of mortgage loans (as a percent) 6.20% 6.90%    
Commercial mortgage loans | Pacific        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 3,963.7 $ 3,567.6    
Percent of mortgage loans (as a percent) 26.40% 25.50%    
Commercial mortgage loans | International        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 299.5 $ 250.8    
Percent of mortgage loans (as a percent) 2.00% 1.80%    
Residential mortgage loans        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 1,496.7 $ 1,368.0 1,285.9  
Mortgage loan valuation allowance (2.5) (3.1) (6.9) $ (17.5)
Mortgage loans, purchased 489.2 394.2 346.0  
Mortgage loans, sold 70.7 80.3 $ 152.2  
First liens        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost 1,485.7 1,352.9    
Home equity        
Mortgage loan disclosures        
Mortgage loans, Total amortized cost $ 11.0 $ 15.1    
v3.19.3.a.u2
Investments - Mortgage Loan Credit Monitoring (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost $ 16,513.9 $ 15,364.3 $ 14,183.2
Commercial mortgage loans      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 15,017.2 13,996.3 12,897.3
Commercial mortgage loans | A- and above      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 13,961.9 12,819.5  
Commercial mortgage loans | BBB+ thru BBB-      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 1,026.9 1,083.0  
Commercial mortgage loans | BB+ thru BB-      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 23.3 88.3  
Commercial mortgage loans | B+ and below      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 5.1 5.5  
Brick and mortar      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 14,856.7 13,806.3  
Brick and mortar | A- and above      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 13,885.2 12,735.2  
Brick and mortar | BBB+ thru BBB-      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 943.1 977.3  
Brick and mortar | BB+ thru BB-      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 23.3 88.3  
Brick and mortar | B+ and below      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 5.1 5.5  
Credit tenant loans      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 160.5 190.0  
Credit tenant loans | A- and above      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 76.7 84.3  
Credit tenant loans | BBB+ thru BBB-      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 83.8 105.7  
Residential mortgage loans      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 1,496.7 1,368.0 $ 1,285.9
Residential mortgage loans | Performing      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 1,482.2 1,351.1  
Residential mortgage loans | Non-performing      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost $ 14.5 $ 16.9  
Mortgage loans, Days delinquent to be considered non-performing 90 days 90 days  
First liens      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost $ 1,485.7 $ 1,352.9  
First liens | Performing      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 1,474.2 1,340.3  
First liens | Non-performing      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 11.5 12.6  
Home equity      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 11.0 15.1  
Home equity | Performing      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost 8.0 10.8  
Home equity | Non-performing      
Mortgage loan credit quality disclosures      
Mortgage loans, Total amortized cost $ 3.0 $ 4.3  
v3.19.3.a.u2
Investments - Mortgage Loans, Non-Accrual and Aging (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Mortgage loan non-accrual and aging disclosures      
Mortgage loans, Non-accrual status $ 11.8 $ 14.4  
Past due 68.2 66.6  
Current 16,445.7 15,297.7  
Mortgage loans, Total amortized cost 16,513.9 15,364.3 $ 14,183.2
Recorded investment 90 days or more past due and accruing 2.7 2.5  
30 to 59 Days Past Due      
Mortgage loan non-accrual and aging disclosures      
Past due 47.4 45.1  
60 to 89 Days Past Due      
Mortgage loan non-accrual and aging disclosures      
Past due 9.3 9.0  
90 Days or More Past Due      
Mortgage loan non-accrual and aging disclosures      
Past due 11.5 12.5  
Commercial mortgage loans      
Mortgage loan non-accrual and aging disclosures      
Mortgage loans, Total amortized cost 15,017.2 13,996.3 12,897.3
Brick and mortar      
Mortgage loan non-accrual and aging disclosures      
Current 14,856.7 13,806.3  
Mortgage loans, Total amortized cost 14,856.7 13,806.3  
Credit tenant loans      
Mortgage loan non-accrual and aging disclosures      
Current 160.5 190.0  
Mortgage loans, Total amortized cost 160.5 190.0  
Residential mortgage loans      
Mortgage loan non-accrual and aging disclosures      
Mortgage loans, Total amortized cost 1,496.7 1,368.0 $ 1,285.9
First liens      
Mortgage loan non-accrual and aging disclosures      
Mortgage loans, Non-accrual status 8.8 10.1  
Past due 67.1 64.8  
Current 1,418.6 1,288.1  
Mortgage loans, Total amortized cost 1,485.7 1,352.9  
Recorded investment 90 days or more past due and accruing 2.7 2.5  
First liens | 30 to 59 Days Past Due      
Mortgage loan non-accrual and aging disclosures      
Past due 46.6 44.3  
First liens | 60 to 89 Days Past Due      
Mortgage loan non-accrual and aging disclosures      
Past due 9.3 8.4  
First liens | 90 Days or More Past Due      
Mortgage loan non-accrual and aging disclosures      
Past due 11.2 12.1  
Home equity      
Mortgage loan non-accrual and aging disclosures      
Mortgage loans, Non-accrual status 3.0 4.3  
Past due 1.1 1.8  
Current 9.9 13.3  
Mortgage loans, Total amortized cost 11.0 15.1  
Home equity | 30 to 59 Days Past Due      
Mortgage loan non-accrual and aging disclosures      
Past due 0.8 0.8  
Home equity | 60 to 89 Days Past Due      
Mortgage loan non-accrual and aging disclosures      
Past due   0.6  
Home equity | 90 Days or More Past Due      
Mortgage loan non-accrual and aging disclosures      
Past due $ 0.3 $ 0.4  
v3.19.3.a.u2
Investments - Mortgage Loan Valuation Allowance (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Changes in mortgage loan valuation allowance      
Beginning balance, Mortgage loan valuation allowance $ 27.4 $ 32.7 $ 44.9
Provision: Mortgage loan valuation allowance (3.0) (6.0) (12.0)
Charge-offs: Mortgage loan valuation allowance (0.6) (2.4) (5.1)
Recoveries: Mortgage loan valuation allowance 3.2 3.1 4.9
Ending balance, Mortgage loan valuation allowance 27.0 27.4 32.7
Individually evaluated for impairment, Mortgage loan valuation allowance 1.4 1.4 4.5
Collectively evaluated for impairment, Mortgage loan valuation allowance 25.6 26.0 28.2
Individually evaluated for impairment, Mortgage loans 11.4 9.2 12.5
Collectively evaluated for impairment, Mortgage loans 16,502.5 15,355.1 14,170.7
Mortgage loans, Total amortized cost $ 16,513.9 $ 15,364.3 $ 14,183.2
Commercial mortgage loans      
Mortgage loan valuation allowance disclosures      
Mortgage loans, Days delinquent to be analyzed for valuation allowance 60 days 60 days 60 days
Changes in mortgage loan valuation allowance      
Beginning balance, Mortgage loan valuation allowance $ 24.3 $ 25.8 $ 27.4
Provision: Mortgage loan valuation allowance 0.2 (1.5) (1.6)
Ending balance, Mortgage loan valuation allowance 24.5 24.3 25.8
Collectively evaluated for impairment, Mortgage loan valuation allowance 24.5 24.3 25.8
Collectively evaluated for impairment, Mortgage loans 15,017.2 13,996.3 12,897.3
Mortgage loans, Total amortized cost 15,017.2 13,996.3 12,897.3
Residential mortgage loans      
Changes in mortgage loan valuation allowance      
Beginning balance, Mortgage loan valuation allowance 3.1 6.9 17.5
Provision: Mortgage loan valuation allowance (3.2) (4.5) (10.4)
Charge-offs: Mortgage loan valuation allowance (0.6) (2.4) (5.1)
Recoveries: Mortgage loan valuation allowance 3.2 3.1 4.9
Ending balance, Mortgage loan valuation allowance 2.5 3.1 6.9
Individually evaluated for impairment, Mortgage loan valuation allowance 1.4 1.4 4.5
Collectively evaluated for impairment, Mortgage loan valuation allowance 1.1 1.7 2.4
Individually evaluated for impairment, Mortgage loans 11.4 9.2 12.5
Collectively evaluated for impairment, Mortgage loans 1,485.3 1,358.8 1,273.4
Mortgage loans, Total amortized cost $ 1,496.7 $ 1,368.0 $ 1,285.9
v3.19.3.a.u2
Investments - Impaired Mortgage Loans (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Residential mortgage loans      
Impaired mortgage loans      
Recorded investment in impaired mortgage loans $ 11.4 $ 9.2  
Unpaid principal balance of impaired mortgage loans 10.1 10.3  
Related allowance for impaired mortgage loans 1.4 1.4  
Average investment in impaired mortgage loans 10.3 11.0 $ 15.9
Interest income recognized on impaired mortgage loans 0.2 0.3 0.4
First liens      
Impaired mortgage loans      
Recorded investment in impaired mortgage loans with no related allowance 0.8 1.6  
Recorded investment in impaired mortgage loans with related allowance 6.8 2.2  
Unpaid principal balance of impaired mortgage loans with no related allowance   1.6  
Unpaid principal balance of impaired mortgage loans with related allowance 5.1 2.2  
Related allowance for impaired mortgage loans 0.2    
Average investment in impaired mortgage loans with no related allowance 1.2 1.3 1.2
Average investment in impaired mortgage loans with related allowance 4.5 3.2 4.4
Interest income recognized on impaired mortgage loans with related allowance 0.1 0.1 0.2
Home equity      
Impaired mortgage loans      
Recorded investment in impaired mortgage loans with related allowance 3.8 5.4  
Unpaid principal balance of impaired mortgage loans with related allowance 5.0 6.5  
Related allowance for impaired mortgage loans 1.2 1.4  
Average investment in impaired mortgage loans with related allowance 4.6 6.5 10.3
Interest income recognized on impaired mortgage loans with related allowance $ 0.1 $ 0.2 $ 0.2
v3.19.3.a.u2
Investments - Real Estate (Details) - USD ($)
$ in Millions
1 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Real estate        
Depreciation expense on invested real estate   $ 60.0 $ 54.1 $ 55.9
Accumulated depreciation on invested real estate   $ 526.0 $ 487.2  
Certain real estate joint ventures        
Real estate        
Net pre-tax realized capital gain $ 690.9      
Net after-tax realized capital gain $ 410.8      
v3.19.3.a.u2
Investments - Other Investments (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Summarized financial information of unconsolidated entities      
Total assets, unconsolidated entities $ 158,439.7 $ 135,355.6  
Total liabilities, unconsolidated entities 88,455.8 80,265.4  
Total equity, unconsolidated entities 69,983.9 55,090.2  
Net investment in unconsolidated entities 1,825.5 1,723.7  
Total revenues, unconsolidated entities 17,802.2 15,389.4 $ 15,020.9
Net income, unconsolidated entities 7,938.3 6,542.1 4,530.1
Our share of net income of unconsolidated entities 222.5 161.6 $ 232.7
Other Types of Investments      
Direct financing leases 782.9 830.7  
Cash surrender value of company owned life insurance 734.1 502.6  
Certain sponsored investment funds carried at fair value $ 678.7 $ 719.7  
v3.19.3.a.u2
Investments - Securities Posted as Collateral (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Securities Posted as Collateral    
Commercial mortgage loans and residential first lien mortgages posted as collateral associated with obligation under funding agreements with the Federal Home Loan Bank of Des Moines $ 4,062.0 $ 3,761.3
Fixed maturities available-for-sale and trading securities posted as collateral for a reinsurance arrangement, derivative credit support annex (collateral) agreements, Futures Commission Merchant agreements, a lending arrangement and an obligation under funding agreements with Federal Home Loan Bank of Des Moines 2,749.4 2,402.5
Securities posted as collateral eligible to be sold or repledged $ 163.9 $ 124.2
v3.19.3.a.u2
Investments - Balance Sheet Offsetting, Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Financial Asset Offsetting    
Gross amount of recognized assets subject to netting agreements $ 312.3 $ 239.3
Amount of liabilities that offset the gross amount of assets subject to netting agreements not offset in statement of financial position (88.4) (70.5)
Collateral received, financial assets (221.2) (161.1)
Net amount of assets subject to netting agreements 2.7 7.7
Derivative assets    
Financial Asset Offsetting    
Gross amount of recognized assets subject to netting agreements 288.7 186.3
Amount of liabilities that offset the gross amount of assets subject to netting agreements not offset in statement of financial position (88.4) (70.5)
Collateral received, financial assets (197.6) (108.1)
Net amount of assets subject to netting agreements 2.7 7.7
Gross amount of assets not subject to netting agreements 6.0 7.7
Reverse repurchase agreements    
Financial Asset Offsetting    
Gross amount of recognized assets subject to netting agreements 23.6 53.0
Collateral received, financial assets $ (23.6) $ (53.0)
v3.19.3.a.u2
Investments - Balance Sheet Offsetting, Liabilities (Details) - Derivative liabilities - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Financial Liability Offsetting    
Gross amount of recognized liabilities subject to netting agreements $ 216.0 $ 153.4
Amount of assets that offset the gross amount of liabilities subject to netting agreements not offset in statement of financial position (88.4) (70.5)
Collateral pledged, financial liabilities (118.3) (52.3)
Net amount of liabilities subject to netting agreements 9.3 30.6
Gross amount of liabilities not subject to netting agreements $ 314.5 $ 138.3
v3.19.3.a.u2
Derivative Financial Instruments - Notional Amounts and Credit Exposure (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Derivative Financial Instruments, exposure    
Cash and securities posted under collateral arrangements associated with derivative credit support agreements and Futures Commission Merchant agreements $ 271.6 $ 106.6
Aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position 164.7 109.7
Collateral and initial margin posted supporting derivatives with credit-risk-related contingent features that were in a liability position 271.6 106.6
Additional collateral required to be posted if derivative credit-risk-related contingent features were triggered 42.6  
Cash collateral received associated with derivative credit support annex agreements and Futures Commission Merchant agreements 156.8 79.5
Notional amount 50,868.2 49,954.5
Gross credit exposure 301.6 197.7
Less: collateral received 208.3 122.9
Net credit exposure 93.3 74.8
Interest rate swaps    
Derivative Financial Instruments, exposure    
Cash exchanged under contract 0.0  
Principal payments made under contract 0.0  
Notional amount 35,173.6 34,393.7
Gross credit exposure 181.9 95.4
Interest rate options    
Derivative Financial Instruments, exposure    
Notional amount 1,416.9 1,126.9
Gross credit exposure 28.3 16.3
Interest rate futures    
Derivative Financial Instruments, exposure    
Notional amount 142.5 260.0
Swaptions    
Derivative Financial Instruments, exposure    
Notional amount 62.0  
Currency forwards    
Derivative Financial Instruments, exposure    
Notional amount 1,262.6 863.6
Gross credit exposure 4.9 2.8
Currency swaps    
Derivative Financial Instruments, exposure    
Notional amount 1,027.2 898.6
Gross credit exposure 55.4 71.2
Currency options    
Derivative Financial Instruments, exposure    
Notional amount 53.8 525.2
Gross credit exposure 0.1 1.9
Equity options    
Derivative Financial Instruments, exposure    
Notional amount 1,672.8 1,522.5
Gross credit exposure 30.5 7.7
Equity futures    
Derivative Financial Instruments, exposure    
Notional amount 149.5 491.7
Credit default swaps    
Derivative Financial Instruments, exposure    
Notional amount 165.0 420.0
Gross credit exposure 0.5 2.4
Embedded derivative financial instruments    
Derivative Financial Instruments, exposure    
Notional amount $ 9,742.3 $ 9,452.3
v3.19.3.a.u2
Derivative Financial Instruments - Fair Value of Derivatives (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Derivatives, fair value disclosures    
Derivative instruments, assets $ 294.7 $ 194.0
Derivative instruments, liabilities 530.5 291.7
Fair value of embedded derivative liabilities reported with contractholder funds 214.2 45.2
Derivatives designated as hedging instruments    
Derivatives, fair value disclosures    
Derivative instruments, assets 30.0 37.6
Derivative instruments, liabilities 36.5 29.6
Derivatives not designated as hedging instruments    
Derivatives, fair value disclosures    
Derivative instruments, assets 264.7 156.4
Derivative instruments, liabilities 494.0 262.1
Interest rate contracts | Derivatives designated as hedging instruments    
Derivatives, fair value disclosures    
Derivative instruments, liabilities 21.3 16.1
Interest rate contracts | Derivatives not designated as hedging instruments    
Derivatives, fair value disclosures    
Derivative instruments, assets 204.2 108.0
Derivative instruments, liabilities 16.7 22.6
Foreign exchange contracts | Derivatives designated as hedging instruments    
Derivatives, fair value disclosures    
Derivative instruments, assets 30.0 37.6
Derivative instruments, liabilities 15.2 13.5
Foreign exchange contracts | Derivatives not designated as hedging instruments    
Derivatives, fair value disclosures    
Derivative instruments, assets 29.5 38.4
Derivative instruments, liabilities 100.2 72.9
Equity contracts | Derivatives not designated as hedging instruments    
Derivatives, fair value disclosures    
Derivative instruments, assets 30.5 7.7
Derivative instruments, liabilities 63.1 27.6
Credit contracts | Derivatives not designated as hedging instruments    
Derivatives, fair value disclosures    
Derivative instruments, assets 0.5 2.3
Derivative instruments, liabilities 1.2 4.4
Other contracts | Derivatives not designated as hedging instruments    
Derivatives, fair value disclosures    
Derivative instruments, liabilities $ 312.8 $ 134.6
v3.19.3.a.u2
Derivative Financial Instruments - Credit Derivatives Sold (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Credit default swaps    
Credit derivatives sold disclosures    
Notional amount $ 90.0 $ 325.0
Fair value 0.5 (2.3)
Maximum future payments $ 90.0 $ 325.0
Weighted average expected life 2 years 4 months 24 days 1 year 4 months 24 days
Single name credit default swaps | Corporate debt securities | AAA    
Credit derivatives sold disclosures    
Notional amount   $ 10.0
Fair value   0.1
Maximum future payments   $ 10.0
Weighted average expected life   8 months 12 days
Single name credit default swaps | Corporate debt securities | A    
Credit derivatives sold disclosures    
Notional amount $ 5.0 $ 15.0
Fair value   0.1
Maximum future payments $ 5.0 $ 15.0
Weighted average expected life 6 months 1 year
Single name credit default swaps | Corporate debt securities | BBB    
Credit derivatives sold disclosures    
Notional amount $ 70.0 $ 190.0
Fair value 0.2 0.4
Maximum future payments $ 70.0 $ 190.0
Weighted average expected life 2 years 7 months 6 days 1 year 8 months 12 days
Single name credit default swaps | Corporate debt securities | BB    
Credit derivatives sold disclosures    
Notional amount   $ 10.0
Maximum future payments   $ 10.0
Weighted average expected life   6 months
Single name credit default swaps | Corporate debt securities | CCC    
Credit derivatives sold disclosures    
Notional amount   $ 15.0
Fair value   (3.6)
Maximum future payments   $ 15.0
Weighted average expected life   10 months 24 days
Single name credit default swaps | Government/municipalities | AA    
Credit derivatives sold disclosures    
Notional amount   $ 20.0
Fair value   0.2
Maximum future payments   $ 20.0
Weighted average expected life   1 year
Single name credit default swaps | Sovereign | A    
Credit derivatives sold disclosures    
Notional amount   $ 10.0
Fair value   0.1
Maximum future payments   $ 10.0
Weighted average expected life   8 months 12 days
Single name credit default swaps | Sovereign | BBB    
Credit derivatives sold disclosures    
Notional amount $ 15.0 $ 55.0
Fair value 0.3 0.4
Maximum future payments $ 15.0 $ 55.0
Weighted average expected life 2 years 1 year 3 months 18 days
v3.19.3.a.u2
Derivative Financial Instruments - Fair Value Hedges (Details) - Fixed maturities, available-for-sale - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Fair Value Hedges    
Amortized cost of hedged item - Active hedging relationships $ 142.0  
Amortized cost of hedged item - Active hedging relationships   $ 137.0
Amortized cost of hedged item - Discontinued hedging relationships 159.3 298.9
Amortized cost of hedged item - Active or discontinued hedging relationships 301.3 435.9
Cumulative amount of fair value hedging basis adjustment - Active hedging relationships 18.1 12.4
Cumulative amount of fair value hedging basis adjustment - Discontinued hedging relationships 7.7 13.3
Cumulative amount of fair value hedging basis adjustment - Active or discontinued hedging relationships $ 25.8 $ 25.7
v3.19.3.a.u2
Derivative Financial Instruments - Cash Flow Hedges (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash Flow Hedges      
Maximum length of time hedging exposure to variability in future cash flows for forecasted transactions 6 months    
Net gains (losses) reported in AOCI related to active cash flow hedges of forecasted transactions $ 0.0    
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships (19.3)    
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships   $ 57.4 $ (120.2)
Net gains (losses) expected to be reclassified from accumulated OCI into net income in the next 12 months 24.3    
Interest rate contracts | Fixed maturities, available-for-sale      
Cash Flow Hedges      
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships (9.9)    
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships   36.7 (51.7)
Foreign exchange contracts | Fixed maturities, available-for-sale      
Cash Flow Hedges      
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships $ (9.4)    
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships   20.8 $ (68.5)
Foreign exchange contracts | Investment contracts      
Cash Flow Hedges      
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships   $ (0.1)  
v3.19.3.a.u2
Derivative Financial Instruments - Effect of Hedges on Consolidated Statements of Operations (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Gains (losses) recognized for hedging relationships      
Net investment income (loss) $ 3,998.4 $ 3,629.2 $ 3,459.3
Net realized capital gains (losses) (52.8) (75.4) 524.2
Benefits, claims and settlement expenses (9,905.8) (8,192.5) (7,822.6)
Operating expenses (4,503.9) (4,136.7) (3,893.8)
Fair Value Hedges | Interest rate contracts | Net investment income      
Gains (losses) recognized for hedging relationships      
Gain (loss) recognized on hedged item 5.7    
Gain (loss) recognized on derivatives (6.0)    
Amortization of hedged item basis adjustments (4.2) (6.7) (11.6)
Amounts related to periodic settlements on derivatives (3.4) (5.9) (10.3)
Total gain (loss) recognized for hedging relationships (7.9) (12.6) (21.9)
Fair Value Hedges | Interest rate contracts | Net realized capital gains (losses)      
Gains (losses) recognized for hedging relationships      
Gain (loss) recognized on hedged item   (6.6) (4.6)
Gain (loss) recognized on derivatives   6.2 4.1
Total gain (loss) recognized for hedging relationships   (0.4) (0.5)
Fair Value Hedges | Interest rate contracts | Benefits, claims and settlement expenses      
Gains (losses) recognized for hedging relationships      
Amortization of hedged item basis adjustments     (0.5)
Amounts related to periodic settlements on derivatives     0.9
Total gain (loss) recognized for hedging relationships     0.4
Fair Value Hedges | Interest rate contracts | Fixed maturities, available-for-sale | Net realized capital gains (losses)      
Gains (losses) recognized for hedging relationships      
Gain (loss) recognized on hedged item     (5.2)
Gain (loss) recognized on derivatives     4.7
Total gain (loss) recognized for hedging relationships     (0.5)
Fair Value Hedges | Interest rate contracts | Investment contracts | Net realized capital gains (losses)      
Gains (losses) recognized for hedging relationships      
Gain (loss) recognized on hedged item     0.6
Gain (loss) recognized on derivatives     (0.6)
Cash Flow Hedges | Net investment income      
Gains (losses) recognized for hedging relationships      
Total gain (loss) recognized for hedging relationships 27.2 26.9  
Cash Flow Hedges | Net realized capital gains (losses)      
Gains (losses) recognized for hedging relationships      
Total gain (loss) recognized for hedging relationships 9.0 30.0  
Cash Flow Hedges | Benefits, claims and settlement expenses      
Gains (losses) recognized for hedging relationships      
Total gain (loss) recognized for hedging relationships (0.1) (0.2)  
Cash Flow Hedges | Operating expense      
Gains (losses) recognized for hedging relationships      
Total gain (loss) recognized for hedging relationships (4.8) (10.7)  
Cash Flow Hedges | Interest rate contracts | Gain (loss) reclassified from AOCI on derivatives      
Gains (losses) recognized for hedging relationships      
Net investment income (loss) 19.8 20.9 21.0
Net realized capital gains (losses) (0.6) 17.0 (0.6)
Benefits, claims and settlement expenses (0.1) (0.1)  
Operating expenses (4.8) (10.7) (10.8)
Cash Flow Hedges | Interest rate contracts | Net realized capital gains (losses)      
Gains (losses) recognized for hedging relationships      
Gain (loss) reclassified from AOCI into net income as a result that a forecasted transaction is no longer probable of occurring 0.1 0.3 0.2
Cash Flow Hedges | Interest rate contracts | Fixed maturities, available-for-sale | Gain (loss) reclassified from AOCI on derivatives      
Gains (losses) recognized for hedging relationships      
Net realized capital gains (losses)     (0.6)
Cash Flow Hedges | Interest rate contracts | Fixed maturities, available-for-sale | Net realized capital gains (losses)      
Gains (losses) recognized for hedging relationships      
Gain (loss) reclassified from AOCI into net income as a result that a forecasted transaction is no longer probable of occurring     0.2
Cash Flow Hedges | Foreign exchange contracts | Gain (loss) reclassified from AOCI on derivatives      
Gains (losses) recognized for hedging relationships      
Net realized capital gains (losses) 9.5 12.7 22.0
Cash Flow Hedges | Foreign exchange contracts | Net investment income      
Gains (losses) recognized for hedging relationships      
Amounts related to periodic settlements on derivatives $ 7.4 6.0 7.1
Total gain (loss) recognized for hedging relationships     28.1
Cash Flow Hedges | Foreign exchange contracts | Net realized capital gains (losses)      
Gains (losses) recognized for hedging relationships      
Total gain (loss) recognized for hedging relationships     21.6
Cash Flow Hedges | Foreign exchange contracts | Benefits, claims and settlement expenses      
Gains (losses) recognized for hedging relationships      
Amounts related to periodic settlements on derivatives   $ (0.1) (1.1)
Total gain (loss) recognized for hedging relationships     (1.1)
Cash Flow Hedges | Foreign exchange contracts | Operating expense      
Gains (losses) recognized for hedging relationships      
Total gain (loss) recognized for hedging relationships     (10.8)
Cash Flow Hedges | Foreign exchange contracts | Fixed maturities, available-for-sale | Gain (loss) reclassified from AOCI on derivatives      
Gains (losses) recognized for hedging relationships      
Net realized capital gains (losses)     22.0
Cash Flow Hedges | Foreign exchange contracts | Fixed maturities, available-for-sale | Net realized capital gains (losses)      
Gains (losses) recognized for hedging relationships      
Total gain (loss) recognized for hedging relationships     $ 21.6
v3.19.3.a.u2
Derivative Financial Instruments - Derivatives Not Designated as Hedging Instruments (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations      
Amount of gain (loss) recognized in net income on derivatives $ (145.2) $ (15.9) $ (153.2)
Interest rate contracts      
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations      
Amount of gain (loss) recognized in net income on derivatives 218.0 (27.6) (26.9)
Foreign exchange contracts      
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations      
Amount of gain (loss) recognized in net income on derivatives (58.6) (64.2) 59.4
Equity contracts      
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations      
Amount of gain (loss) recognized in net income on derivatives (132.9) (31.0) (181.3)
Credit contracts      
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations      
Amount of gain (loss) recognized in net income on derivatives (3.6) (1.6) (15.9)
Other contracts      
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations      
Amount of gain (loss) recognized in net income on derivatives $ (168.1) $ 108.5 $ 11.5
v3.19.3.a.u2
Closed Block - Assets and Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Closed Block liabilities and assets designated to the Closed Block        
Closed Block liabilities: Policyholder dividends obligation $ 202.7 $ 36.6    
Closed Block liabilities        
Closed Block liabilities: Future policy benefits and claims 3,563.1 3,732.5    
Closed Block liabilities: Other policyholder funds 6.6 6.5    
Closed Block liabilities: Policyholder dividends payable 199.1 211.3    
Closed Block liabilities: Policyholder dividends obligation 202.7 36.6    
Closed Block liabilities: Other liabilities 7.8 9.5    
Total Closed Block liabilities 3,979.3 3,996.4    
Assets designated to the Closed Block        
Closed Block assets: Fixed maturities, available-for-sale 2,269.6 2,176.4    
Closed Block assets: Fixed maturities, trading 2.6 2.5    
Closed Block assets: Equity securities 1.1 1.0    
Closed Block assets: Mortgage loans 622.8 678.5    
Closed Block assets: Policy loans 486.0 510.5    
Closed Block assets: Other investments 46.4 33.8    
Closed Block assets: Total investments 3,428.5 3,402.7    
Closed Block assets: Cash and cash equivalents 47.5 42.1    
Closed Block assets: Accrued investment income 38.1 39.5    
Closed Block assets: Premiums due and other receivables 9.7 10.0    
Closed Block assets: Deferred tax asset 29.5 30.5    
Total assets designated to the Closed Block 3,553.3 3,524.8    
Excess of Closed Block liabilities over assets designated to the Closed Block 426.0 471.6    
Amounts included in accumulated other comprehensive income (loss) 0.9 5.2    
Maximum future earnings to be recognized from Closed Block assets and liabilities $ 426.9 $ 476.8 $ 532.1 $ 549.8
v3.19.3.a.u2
Closed Block - Revenues and Expenses (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenues      
Closed Block: Premiums and other considerations $ 227.6 $ 244.2 $ 275.6
Closed Block: Net investment income (loss) 154.4 160.5 169.4
Closed Block: Net realized capital gains (losses) 7.4 (3.4) (5.8)
Closed Block: Total revenues 389.4 401.3 439.2
Expenses      
Closed Block: Benefits, claims and settlement expenses 204.4 211.5 245.6
Closed Block: Dividends to policyholders 116.3 120.9 122.0
Closed Block: Operating expenses 2.9 3.3 3.5
Closed Block: Total expenses 323.6 335.7 371.1
Closed Block revenues, net of Closed Block expenses, before income taxes 65.8 65.6 68.1
Closed Block: Income taxes (benefits) 12.9 11.1 46.0
Closed Block revenues, net of Closed Block expenses and income taxes 52.9 54.5 22.1
Funding adjustment charges (3.0) (0.5) (4.4)
Closed Block revenues, net of Closed Block expenses, income taxes and funding adjustments $ 49.9 $ 54.0 $ 17.7
v3.19.3.a.u2
Closed Block - Change in Maximum Future Earnings (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Change in maximum future earnings of the Closed Block      
Maximum future earnings to be recognized from Closed Block assets and liabilities, Beginning of year $ 476.8 $ 532.1 $ 549.8
Effects of implementation of accounting changes   1.3  
Maximum future earnings to be recognized from Closed Block assets and liabilities, End of year 426.9 476.8 532.1
Closed Block revenues, net of Closed Block expenses, income taxes and funding adjustment charges $ (49.9) $ (54.0) $ (17.7)
v3.19.3.a.u2
Deferred Acquisition Costs (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Change in deferred acquisition costs      
Balance at beginning of year, deferred acquisition costs $ 3,693.5 $ 3,540.7 $ 3,380.2
Costs deferred during the year 473.5 414.9 421.8
Amortization of deferred acquisition costs (347.0) (253.5) (234.6)
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivative instruments (298.7) 184.9 (26.7)
Other   (193.5)  
Balance at end of year, deferred acquisition costs $ 3,521.3 $ 3,693.5 $ 3,540.7
v3.19.3.a.u2
Insurance Liabilities - Components of Contractholder Funds (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Liabilities for investment contracts:    
Liabilities for individual annuities $ 13,457.5 $ 12,913.9
GICs 10,423.5 10,321.7
Funding agreements 8,640.6 7,729.5
Other investment contracts 1,596.7 1,652.2
Total liabilities for investment contracts 34,118.3 32,617.3
Universal life and other reserves 7,249.2 7,082.4
Contractholder funds $ 41,367.5 $ 39,699.7
v3.19.3.a.u2
Insurance Liabilities - Contractholder Funding Agreements (Details)
$ in Millions, € in Billions
12 Months Ended
Dec. 31, 2019
USD ($)
item
Dec. 31, 2018
USD ($)
Nov. 30, 2017
USD ($)
Jun. 30, 2015
USD ($)
Dec. 31, 2011
USD ($)
Dec. 31, 2006
EUR (€)
Dec. 31, 2006
USD ($)
Mar. 31, 2004
USD ($)
Dec. 31, 2001
USD ($)
Dec. 31, 1998
USD ($)
Funding agreement disclosures                    
Funding agreements $ 8,640.6 $ 7,729.5                
Principal Life Insurance Company                    
Funding agreement disclosures                    
Number of separate funding agreement programs | item 5                  
Number of funding agreement programs not guaranteed by PFG | item 3                  
Principal Life Insurance Company | FHLB Des Moines funding agreement program                    
Funding agreement disclosures                    
Funding agreements $ 4,010.9 3,512.2                
Principal Life Insurance Company | 1998 Funding agreement program                    
Funding agreement disclosures                    
Maximum authorized amount of funding agreements to be issued                   $ 4,000.0
Funding agreements 75.2 109.6                
Principal Life Insurance Company | 2006 Funding agreement program                    
Funding agreement disclosures                    
Maximum authorized amount of funding agreements to be issued           € 4.0 $ 5,300.0      
Funding agreements 112.2 114.4                
Principal Life Insurance Company | 2001 Funding agreement program                    
Funding agreement disclosures                    
Maximum authorized amount of funding agreements to be issued                 $ 7,000.0  
Funding agreements 201.7 201.6                
Principal Life Insurance Company | 2004 Funding agreement program                    
Funding agreement disclosures                    
Maximum authorized amount of funding agreements to be issued               $ 9,000.0    
Funding agreements 26.2 26.2                
Principal Life Insurance Company | 2011 Funding agreement program                    
Funding agreement disclosures                    
Maximum authorized amount of funding agreements to be issued         $ 5,000.0          
Funding agreements $ 4,214.3 $ 3,765.3                
Additional maximum authorized amount of funding agreements to be issued     $ 4,000.0 $ 4,000.0            
Amount of funding agreement authorization used at time additional amount authorized       $ 5,000.0            
v3.19.3.a.u2
Insurance Liabilities - Liability for Unpaid Claims (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Change in unpaid claims      
Balance at beginning of period, unpaid claims $ 2,252.7 $ 2,130.5 $ 2,001.3
Balance at beginning of period, reinsurance recoverables for unpaid claims 404.3 375.8 340.3
Net balance at beginning of period, unpaid claims 1,848.4 1,754.7 1,661.0
Incurred:      
Incurred: Current year 1,361.3 1,268.8 1,196.6
Incurred: Prior years 0.8 0.3 18.2
Total incurred 1,362.1 1,269.1 1,214.8
Payments:      
Payments: Current year 869.4 815.7 767.2
Payments: Prior years 379.4 359.7 353.9
Total payments 1,248.8 1,175.4 1,121.1
Net balance at end of period, unpaid claims 1,961.7 1,848.4 1,754.7
Balance at end of period, reinsurance recoverables for unpaid claims 403.8 404.3 375.8
Balance at end of period, unpaid claims 2,365.5 2,252.7 2,130.5
Amount not included in the rollforward above:      
Claim adjustment expense liabilities $ 57.9 $ 54.6 $ 50.7
v3.19.3.a.u2
Insurance Liabilities - Claims Development Tables (Details)
$ in Millions
Dec. 31, 2019
USD ($)
claim
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Dec. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
Dec. 31, 2013
USD ($)
Dec. 31, 2012
USD ($)
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Claims Development                    
Total outstanding liabilities for unpaid claims net of reinsurance $ 1,309.2                  
Long-Term Disability/Group Life Waiver                    
Claims Development                    
Net incurred claims 2,040.3                  
Net cumulative paid claims 1,089.6                  
Liability for unpaid claims net, not separately presented 237.8                  
Total outstanding liabilities for unpaid claims net of reinsurance 1,188.5                  
Long-Term Disability/Group Life Waiver | Incurral year 2010                    
Claims Development                    
Net incurred claims 151.8 $ 152.1 $ 153.4 $ 154.1 $ 155.7 $ 162.7 $ 172.0 $ 176.2 $ 176.7 $ 184.1
Incurred but not reported claims $ 0.1                  
Cumulative number of reported claims | claim 5,649                  
Net cumulative paid claims $ 116.7 112.1 107.2 100.9 94.2 85.9 78.4 67.1 46.5 $ 10.4
Long-Term Disability/Group Life Waiver | Incurral year 2011                    
Claims Development                    
Net incurred claims 166.5 167.6 169.6 172.3 178.4 184.8 185.4 192.6 203.7  
Incurred but not reported claims $ 0.1                  
Cumulative number of reported claims | claim 6,290                  
Net cumulative paid claims $ 125.4 119.3 112.6 105.2 95.4 85.7 72.5 50.0 $ 11.2  
Long-Term Disability/Group Life Waiver | Incurral year 2012                    
Claims Development                    
Net incurred claims 171.9 173.3 174.8 181.8 189.5 191.1 200.0 217.9    
Incurred but not reported claims $ 0.1                  
Cumulative number of reported claims | claim 6,444                  
Net cumulative paid claims $ 126.1 120.0 112.9 104.6 93.7 80.8 55.1 $ 13.8    
Long-Term Disability/Group Life Waiver | Incurral year 2013                    
Claims Development                    
Net incurred claims 177.1 179.5 182.3 190.7 188.4 203.3 219.3      
Incurred but not reported claims $ 0.1                  
Cumulative number of reported claims | claim 7,050                  
Net cumulative paid claims $ 123.2 116.4 106.4 97.0 81.4 55.0 $ 12.5      
Long-Term Disability/Group Life Waiver | Incurral year 2014                    
Claims Development                    
Net incurred claims 201.9 206.2 218.1 214.4 231.4 242.2        
Incurred but not reported claims $ 0.1                  
Cumulative number of reported claims | claim 7,596                  
Net cumulative paid claims $ 132.4 122.3 111.8 96.3 66.0 $ 16.1        
Long-Term Disability/Group Life Waiver | Incurral year 2015                    
Claims Development                    
Net incurred claims 208.2 215.3 217.2 227.2 231.0          
Incurred but not reported claims $ 0.1                  
Cumulative number of reported claims | claim 7,174                  
Net cumulative paid claims $ 126.8 114.6 98.0 67.0 $ 16.9          
Long-Term Disability/Group Life Waiver | Incurral year 2016                    
Claims Development                    
Net incurred claims 219.5 219.4 228.4 229.8            
Incurred but not reported claims $ 5.4                  
Cumulative number of reported claims | claim 6,161                  
Net cumulative paid claims $ 124.9 105.6 70.6 $ 16.2            
Long-Term Disability/Group Life Waiver | Incurral year 2017                    
Claims Development                    
Net incurred claims 243.1 239.7 238.4              
Incurred but not reported claims $ 8.0                  
Cumulative number of reported claims | claim 6,053                  
Net cumulative paid claims $ 115.0 76.5 $ 17.8              
Long-Term Disability/Group Life Waiver | Incurral year 2018                    
Claims Development                    
Net incurred claims 245.1 239.4                
Incurred but not reported claims $ 3.8                  
Cumulative number of reported claims | claim 5,668                  
Net cumulative paid claims $ 79.9 20.1                
Long-Term Disability/Group Life Waiver | Incurral year 2019                    
Claims Development                    
Net incurred claims 255.2                  
Incurred but not reported claims $ 104.6                  
Cumulative number of reported claims | claim 3,472                  
Net cumulative paid claims $ 19.2                  
Dental/Vision/Short-Term Disability/Critical Illness/Accident                    
Claims Development                    
Net incurred claims 1,364.7                  
Net cumulative paid claims 1,293.5                  
Total outstanding liabilities for unpaid claims net of reinsurance 71.2                  
Dental/Vision/Short-Term Disability/Critical Illness/Accident | Incurral year 2018                    
Claims Development                    
Net incurred claims $ 640.0 648.3                
Cumulative number of reported claims | claim 3,032,617                  
Net cumulative paid claims $ 640.0 589.1                
Dental/Vision/Short-Term Disability/Critical Illness/Accident | Incurral year 2019                    
Claims Development                    
Net incurred claims 724.7                  
Incurred but not reported claims $ 45.0                  
Cumulative number of reported claims | claim 3,184,519                  
Net cumulative paid claims $ 653.5                  
Group Life                    
Claims Development                    
Net incurred claims 466.7                  
Net cumulative paid claims 418.2                  
Liability for unpaid claims net, not separately presented 1.0                  
Total outstanding liabilities for unpaid claims net of reinsurance 49.5                  
Group Life | Incurral year 2018                    
Claims Development                    
Net incurred claims 238.4 239.6                
Incurred but not reported claims $ 0.7                  
Cumulative number of reported claims | claim 5,220                  
Net cumulative paid claims $ 236.5 $ 193.9                
Group Life | Incurral year 2019                    
Claims Development                    
Net incurred claims 228.3                  
Incurred but not reported claims $ 23.0                  
Cumulative number of reported claims | claim 4,625                  
Net cumulative paid claims $ 181.7                  
v3.19.3.a.u2
Insurance Liabilities - Reconciliation of Unpaid Claims to Liability for Unpaid Claims Table (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]        
Net outstanding liabilities for unpaid claims $ 1,309.2      
Reconciling items        
Reinsurance recoverable on unpaid claims 57.3      
Impact of discounting (215.0)      
Liability for unpaid claims - short duration contracts 1,151.5      
Insurance contracts other than short duration 1,214.0      
Liability for unpaid claims 2,365.5 $ 2,252.7 $ 2,130.5 $ 2,001.3
Long-Term Disability/Group Life Waiver        
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]        
Net outstanding liabilities for unpaid claims 1,188.5      
Reconciling items        
Reinsurance recoverable on unpaid claims 56.4      
Impact of discounting (215.0) (217.7)    
Liability for unpaid claims - short duration contracts 1,029.9 1,020.0    
Dental/Vision/Short-Term Disability/Critical Illness/Accident        
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]        
Net outstanding liabilities for unpaid claims 71.2      
Reconciling items        
Liability for unpaid claims - short duration contracts 71.2 59.3    
Group Life        
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]        
Net outstanding liabilities for unpaid claims 49.5      
Reconciling items        
Reinsurance recoverable on unpaid claims 0.9      
Liability for unpaid claims - short duration contracts $ 50.4 $ 49.7    
v3.19.3.a.u2
Insurance Liabilities - Claim Duration and Payout Table (Details)
Dec. 31, 2019
Long-Term Disability/Group Life Waiver  
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]  
Year 1 7.60%
Year 2 24.20%
Year 3 14.90%
Year 4 8.10%
Year 5 5.60%
Year 6 5.30%
Year 7 4.20%
Year 8 3.90%
Year 9 3.50%
Year 10 3.10%
Dental/Vision/Short-Term Disability/Critical Illness/Accident  
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]  
Year 1 91.70%
Year 2 8.00%
Group Life  
Short-duration Insurance Contracts, Historical Claims Duration [Line Items]  
Year 1 81.70%
Year 2 17.00%
v3.19.3.a.u2
Insurance Liabilities - Discounting Table (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Short-duration Insurance Contracts, Discounted Liabilities [Line Items]      
Carrying amount of liabilities for unpaid claims $ 1,151.5    
Aggregate amount of discount 215.0    
Long-Term Disability/Group Life Waiver      
Short-duration Insurance Contracts, Discounted Liabilities [Line Items]      
Carrying amount of liabilities for unpaid claims 1,029.9 $ 1,020.0  
Aggregate amount of discount 215.0 217.7  
Interest accretion $ 34.2 $ 34.5 $ 35.0
Long-Term Disability/Group Life Waiver | Minimum      
Short-duration Insurance Contracts, Discounted Liabilities [Line Items]      
Discount rate 3.30% 3.30%  
Long-Term Disability/Group Life Waiver | Maximum      
Short-duration Insurance Contracts, Discounted Liabilities [Line Items]      
Discount rate 7.00% 7.00%  
Dental/Vision/Short-Term Disability/Critical Illness/Accident      
Short-duration Insurance Contracts, Discounted Liabilities [Line Items]      
Carrying amount of liabilities for unpaid claims $ 71.2 $ 59.3  
Group Life      
Short-duration Insurance Contracts, Discounted Liabilities [Line Items]      
Carrying amount of liabilities for unpaid claims $ 50.4 $ 49.7  
v3.19.3.a.u2
Debt - Short-Term Debt (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Short-Term Debt    
Credit facilities $ 994.5 $ 1,001.4
Short-term debt $ 93.4 $ 42.9
Weighted-average interest rates on short-term borrowings (as a percent) 3.40% 3.90%
Credit facility maturing November 2023 | PFG, PFS, Principal Life as co-borrowers    
Short-Term Debt    
Credit facilities $ 600.0 $ 600.0
Credit facility maturing November 2023 | PFG, PFS, Principal Life and Principal Financial Services V (UK) LTD as co-borrowers    
Short-Term Debt    
Credit facilities 200.0 200.0
Unsecured lines of credit | Principal International Chile    
Short-Term Debt    
Credit facilities 134.5 141.4
Short-term debt $ 93.4 $ 42.9
Unsecured lines of credit | Maximum | Principal International Chile    
Short-Term Debt    
Term of credit facility 1 year 1 year
Unsecured line of credit maturing September 2019 | Principal Life Insurance Company    
Short-Term Debt    
Credit facilities   $ 60.0
Unsecured line of credit maturing September 2020 | Principal Life Insurance Company    
Short-Term Debt    
Credit facilities $ 60.0  
Commercial paper    
Short-Term Debt    
Support provided by back-stop facility for commercial paper program (as a percent) 100.00% 100.00%
Back-stop facility outstanding balances $ 0.0 $ 0.0
v3.19.3.a.u2
Debt - Components of Long-Term Debt (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Long-Term Debt    
Long-term debt principal $ 3,763.2 $ 3,284.1
Net unamortized discount, premium and debt issuance costs (29.1) (24.5)
Long-term debt carrying amount $ 3,734.1 $ 3,259.6
3.3% notes payable, due 2022    
Long-Term Debt    
Interest rate (as a percent) 3.30% 3.30%
Long-term debt principal $ 300.0 $ 300.0
Net unamortized discount, premium and debt issuance costs (1.0) (1.5)
Long-term debt carrying amount $ 299.0 $ 298.5
3.125% notes payable, due 2023    
Long-Term Debt    
Interest rate (as a percent) 3.125% 3.125%
Long-term debt principal $ 300.0 $ 300.0
Net unamortized discount, premium and debt issuance costs (1.0) (1.2)
Long-term debt carrying amount $ 299.0 $ 298.8
3.4% notes payable, due 2025    
Long-Term Debt    
Interest rate (as a percent) 3.40% 3.40%
Long-term debt principal $ 400.0 $ 400.0
Net unamortized discount, premium and debt issuance costs (2.6) (3.0)
Long-term debt carrying amount $ 397.4 $ 397.0
3.1% notes payable, due 2026    
Long-Term Debt    
Interest rate (as a percent) 3.10% 3.10%
Long-term debt principal $ 350.0 $ 350.0
Net unamortized discount, premium and debt issuance costs (2.5) (2.7)
Long-term debt carrying amount $ 347.5 $ 347.3
3.7% notes payable, due 2029    
Long-Term Debt    
Interest rate (as a percent) 3.70%  
Long-term debt principal $ 500.0  
Net unamortized discount, premium and debt issuance costs (6.1)  
Long-term debt carrying amount $ 493.9  
6.05% notes payable, due 2036    
Long-Term Debt    
Interest rate (as a percent) 6.05% 6.05%
Long-term debt principal $ 505.6 $ 505.6
Net unamortized discount, premium and debt issuance costs (2.4) (2.6)
Long-term debt carrying amount $ 503.2 $ 503.0
4.625% notes payable, due 2042    
Long-Term Debt    
Interest rate (as a percent) 4.625% 4.625%
Long-term debt principal $ 300.0 $ 300.0
Net unamortized discount, premium and debt issuance costs (3.2) (3.3)
Long-term debt carrying amount $ 296.8 $ 296.7
4.35% notes payable, due 2043    
Long-Term Debt    
Interest rate (as a percent) 4.35% 4.35%
Long-term debt principal $ 300.0 $ 300.0
Net unamortized discount, premium and debt issuance costs (3.3) (3.3)
Long-term debt carrying amount $ 296.7 $ 296.7
4.3% notes payable, due 2046    
Long-Term Debt    
Interest rate (as a percent) 4.30% 4.30%
Long-term debt principal $ 300.0 $ 300.0
Net unamortized discount, premium and debt issuance costs (3.3) (3.3)
Long-term debt carrying amount $ 296.7 $ 296.7
4.7% notes payable, due 2055    
Long-Term Debt    
Interest rate (as a percent) 4.70% 4.70%
Long-term debt principal $ 400.0 $ 400.0
Net unamortized discount, premium and debt issuance costs (4.9) (4.9)
Long-term debt carrying amount 395.1 395.1
Non-recourse mortgages and notes payable    
Long-Term Debt    
Long-term debt principal 107.6 128.5
Net unamortized discount, premium and debt issuance costs 1.2 1.3
Long-term debt carrying amount $ 108.8 $ 129.8
v3.19.3.a.u2
Debt - Senior Notes and Junior Subordinated Notes (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
May 07, 2015
Sep. 05, 2012
Aug. 15, 2009
Dec. 31, 2016
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
May 07, 2019
Nov. 10, 2016
Nov. 16, 2012
May 18, 2009
Dec. 05, 2006
Oct. 16, 2006
Long-Term Debt                          
Principal repayments of long-term debt         $ 32.2 $ 1.3 $ 56.5            
Maximum | Junior subordinated notes                          
Long-Term Debt                          
Years interest payments on debt can be deferred 5 years                        
3.1% notes payable, due 2026 and 4.3% notes payable, due 2046 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                 $ 650.0        
3.1% notes payable, due 2026                          
Long-Term Debt                          
Interest rate (as a percent)         3.10% 3.10%              
3.1% notes payable, due 2026 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                 $ 350.0        
Interest rate (as a percent)                 3.10%        
4.3% notes payable, due 2046                          
Long-Term Debt                          
Interest rate (as a percent)         4.30% 4.30%              
4.3% notes payable, due 2046 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                 $ 300.0        
Interest rate (as a percent)                 4.30%        
3.4% notes payable, due 2025                          
Long-Term Debt                          
Interest rate (as a percent)         3.40% 3.40%              
3.4% notes payable, due 2025 | Senior notes                          
Long-Term Debt                          
Long-term debt issued $ 400.0                        
Interest rate (as a percent) 3.40%                        
4.7% notes payable, due 2055                          
Long-Term Debt                          
Interest rate (as a percent)         4.70% 4.70%              
4.7% notes payable, due 2055 | Junior subordinated notes                          
Long-Term Debt                          
Long-term debt issued $ 400.0                        
Interest rate (as a percent) 4.70%                        
Reference rate for floating rate of debt instrument 3-month LIBOR                        
Spread added to floating reference interest rate (as a percent) 3.044%                        
1.85% notes payable, due 2017; 3.125% notes payable, due 2023; and 4.35% notes payable, due 2043 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                   $ 900.0      
1.85% notes payable, due 2017 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                   $ 300.0      
Interest rate (as a percent)                   1.85%      
3.125% notes payable, due 2023                          
Long-Term Debt                          
Interest rate (as a percent)         3.125% 3.125%              
3.125% notes payable, due 2023 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                   $ 300.0      
Interest rate (as a percent)                   3.125%      
4.35% notes payable, due 2043                          
Long-Term Debt                          
Interest rate (as a percent)         4.35% 4.35%              
4.35% notes payable, due 2043 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                   $ 300.0      
Interest rate (as a percent)                   4.35%      
3.3% notes payable, due 2022 and 4.625% notes payable, due 2042 | Senior notes                          
Long-Term Debt                          
Long-term debt issued   $ 600.0                      
3.3% notes payable, due 2022                          
Long-Term Debt                          
Interest rate (as a percent)         3.30% 3.30%              
3.3% notes payable, due 2022 | Senior notes                          
Long-Term Debt                          
Long-term debt issued   $ 300.0                      
Interest rate (as a percent)   3.30%                      
4.625% notes payable, due 2042                          
Long-Term Debt                          
Interest rate (as a percent)         4.625% 4.625%              
4.625% notes payable, due 2042 | Senior notes                          
Long-Term Debt                          
Long-term debt issued   $ 300.0                      
Interest rate (as a percent)   4.625%                      
7.875% notes payable, due 2014 and 8.875% notes payable, due 2019 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                     $ 750.0    
7.875% notes payable, due 2014 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                     $ 400.0    
Interest rate (as a percent)                     7.875%    
Principal repayments of long-term debt   $ 400.0                      
8.875% notes payable, due 2019 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                     $ 350.0    
Interest rate (as a percent)                     8.875%    
8.2% notes payable, due 2009 | Senior notes                          
Long-Term Debt                          
Principal repayments of long-term debt     $ 440.9                    
6.05% notes payable, due 2036                          
Long-Term Debt                          
Interest rate (as a percent)         6.05% 6.05%              
6.05% notes payable, due 2036 | Senior notes                          
Long-Term Debt                          
Principal repayments of long-term debt       $ 94.4                  
6.05% notes payable, due 2036, issued in October 2006 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                         $ 500.0
Interest rate (as a percent)                         6.05%
6.05% notes payable, due 2036, issued in December 2006 | Senior notes                          
Long-Term Debt                          
Long-term debt issued                       $ 100.0  
Interest rate (as a percent)                       6.05%  
3.7% notes payable, due 2029                          
Long-Term Debt                          
Interest rate (as a percent)         3.70%                
3.7% notes payable, due 2029 | Senior notes                          
Long-Term Debt                          
Long-term debt issued               $ 500.0          
Interest rate (as a percent)               3.70%          
v3.19.3.a.u2
Debt - Non-Recourse Mortgages and Notes Payable (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Long-Term Debt    
Outstanding principal balances $ 3,763.2 $ 3,284.1
Non-recourse mortgages and notes payable    
Long-Term Debt    
Outstanding principal balances 107.6 128.5
Outstanding principal balances per real estate development, low end of range 3.7 3.8
Outstanding principal balances per real estate development, high end of range 64.2 58.4
Real estate $ 238.2 $ 307.3
Non-recourse mortgages and notes payable | Minimum    
Long-Term Debt    
Interest rate (as a percent) 3.90% 3.90%
Non-recourse mortgages and notes payable | Maximum    
Long-Term Debt    
Interest rate (as a percent) 4.80% 4.80%
v3.19.3.a.u2
Debt - Future Maturities of Long-Term Debt (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Future maturities of long-term debt    
Year 1: Long-term debt maturities $ 65.9  
Year 2: Long-term debt maturities 1.8  
Year 3: Long-term debt maturities 300.7  
Year 4: Long-term debt maturities 314.0  
Year 5: Long-term debt maturities 17.5  
Year 6 and thereafter: Long-term debt maturities 3,034.2  
Long-term debt carrying amount $ 3,734.1 $ 3,259.6
v3.19.3.a.u2
Debt - Contingent Funding Agreements (Details)
$ in Millions
Mar. 08, 2018
USD ($)
item
Contingent funding agreements  
Long-Term Debt  
Number of contingent funding agreements | item 2
Period failure to make payments to trust can be cured before automatic exercise of put options 30 days
Minimum shareholders' equity excluding AOCI and NCI, to avoid automatic exercise of options $ 4,000.0
10-year contingent funding agreement | 2028 Trust  
Long-Term Debt  
Term of contingent funding agreement 10 years
Semi-annual put premium (as a percent) 1.275%
10-year contingent funding agreement | 2028 Trust | Senior Notes due 2028  
Long-Term Debt  
Amount of notes issuable under option $ 400.0
Interest rate (as a percent) 4.111%
30-year contingent funding agreement | 2048 Trust  
Long-Term Debt  
Term of contingent funding agreement 30 years
Annual put premium (as a percent) 1.58%
30-year contingent funding agreement | 2048 Trust | Senior Notes due 2048  
Long-Term Debt  
Amount of notes issuable under option $ 350.0
Interest rate (as a percent) 4.682%
2028 Trust  
Long-Term Debt  
Pre-capitalized trust securities sold $ 400.0
2048 Trust  
Long-Term Debt  
Pre-capitalized trust securities sold $ 350.0
v3.19.3.a.u2
Income Taxes - Income Tax Expense and Income Before Income Taxes (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Taxes      
Current income taxes (benefits): U.S. federal $ 31.9 $ (48.9) $ (4.4)
Current income taxes (benefits): State 18.1 10.3 48.9
Current income taxes (benefits): Foreign 45.6 51.7 38.1
Current income taxes (benefits): Tax benefit of operating loss carryforwards (3.0) (13.5) (21.5)
Total current income taxes (benefits) 92.6 (0.4) 61.1
Deferred income taxes (benefits): U.S. federal 108.6 224.3 (208.2)
Deferred income taxes (benefits): State 6.9 19.2 42.5
Deferred income taxes (benefits): Foreign 41.1 (12.4) 32.3
Total deferred income taxes (benefits) 156.6 231.1 (133.4)
Income taxes (benefits) 249.2 230.7 (72.3)
Income (loss) before income taxes      
Income (loss) before income taxes - domestic 1,365.1 1,658.1 1,848.5
Income (loss) before income taxes - foreign 328.2 126.3 403.7
Income (loss) before income taxes $ 1,693.3 $ 1,784.4 $ 2,252.2
v3.19.3.a.u2
Income Taxes - Effective Income Tax Rate (Details)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Reconciliation between the U.S. corporate income tax rate and the effective income tax rate from continuing operations      
U.S. corporate income tax rate (as a percent) 21.00% 21.00% 35.00%
Dividends received deduction (as a percent) (5.00%) (4.00%) (8.00%)
Tax credits (as a percent) (3.00%) (3.00%) (2.00%)
Impact of equity method presentation (as a percent) (2.00%) (1.00%) (2.00%)
Impact of the Tax Cuts and Jobs Act (as a percent)   (3.00%) (25.00%)
Interest exclusion from taxable income (as a percent)   (1.00%) (1.00%)
State income taxes (as a percent) 1.00% 1.00% 2.00%
Local country permanent tax adjustments (as a percent) 1.00% 1.00%  
Other income tax rate impacts (as a percent) 2.00% 2.00% (2.00%)
Effective income tax rate (as a percent) 15.00% 13.00% (3.00%)
v3.19.3.a.u2
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Changes in Unrecognized Tax Benefits      
Beginning balance, Unrecognized tax benefits $ 42.1 $ 194.1 $ 207.8
Additions based on tax positions related to the current year 0.1 0.8 7.2
Additions for tax positions of prior years 23.1 43.7 20.2
Reductions for tax positions related to the current year (3.2) (10.6) (3.3)
Reductions for tax positions of prior years (0.5) (23.2) (1.1)
Settlements   (162.7) (36.7)
Ending balance, Unrecognized tax benefits 61.6 42.1 194.1
Amount of unrecognized tax benefits that would reduce the effective income tax rate, if recognized 4.4    
Accumulated pre-tax interest and penalties related to unrecognized tax benefits $ 0.9 $ 1.6 $ 125.5
v3.19.3.a.u2
Income Taxes - Deferred Income Taxes and Other (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Taxes      
U.S. statutory tax rate (as a percent) 21.00% 21.00% 35.00%
Deferred income tax assets:      
Investments, including derivative liabilities $ 237.0 $ 165.6  
Insurance liabilities 143.2    
Net operating and capital loss carryforwards 71.1 80.8  
Tax credit carryforwards 106.0 163.3  
Employee benefits 338.9 327.3  
Foreign currency translation 14.0 28.1  
Other deferred income tax assets 45.2 33.8  
Gross deferred income tax assets 955.4 798.9  
Valuation allowance (16.7) (17.0)  
Total deferred income tax assets 938.7 781.9  
Deferred income tax liabilities:      
Deferred acquisition costs (562.9) (615.8)  
Investments, including derivative assets (443.7) (298.1)  
Net unrealized gains on available-for-sale securities (1,039.9) (98.1)  
Real estate (147.9) (144.9)  
Intangible assets (342.3) (310.0)  
Insurance liabilities   (60.2)  
Other deferred income tax liabilities (75.0) (71.9)  
Total deferred income tax liabilities (2,611.7) (1,599.0)  
Total net deferred income tax liabilities (1,673.0) (817.1)  
Net deferred income taxes by jurisdiction      
Net deferred income tax assets 123.6 141.3  
Net deferred income tax liabilities (1,796.6) (958.4)  
Total net deferred income tax liabilities (1,673.0) (817.1)  
Deferred income tax disclosures      
One-time deemed repatriation tax, provisional amount     $ 43.0
Adjustments to deferred tax assets and liabilities 11.1    
Adjustment to one-time deemed repatriation tax   5.9  
One-time deemed repatriation tax, final determination amount   48.9  
Accumulated but undistributed earnings from operations of foreign subsidiaries for which U.S. federal and state deferred income taxes have not been provided 1,001.5 1,184.0  
Excess book carrying value over tax basis with respect to the original investment of foreign subsidiaries for which U.S. federal and state deferred income taxes have not been provided 106.2    
Current income tax receivables associated with outstanding audit issues      
Current income tax (receivables) payables associated with outstanding audit issues 195.3 193.0  
U.S. Federal      
Deferred income tax assets:      
Tax credit carryforwards 106.0 163.3  
Net deferred income taxes by jurisdiction      
Net deferred income tax liabilities (1,507.6) (708.2)  
State      
Net deferred income taxes by jurisdiction      
Net deferred income tax assets 94.9 108.2  
Deferred income tax disclosures-operating loss carryforwards      
Net operating loss carryforwards 190.4 309.6  
Foreign      
Net deferred income taxes by jurisdiction      
Net deferred income tax assets 28.7 33.1  
Net deferred income tax liabilities (289.0) (250.2)  
Deferred income tax disclosures-operating loss carryforwards      
Net operating loss carryforwards 186.1 191.3  
Valuation allowances on income tax benefits primarily associated with foreign net operating loss carryforwards $ 16.7 $ 17.0  
v3.19.3.a.u2
Employee and Agent Benefits - Plan Information (Details)
12 Months Ended
Dec. 31, 2019
Pension benefits  
Defined Benefit Plan Disclosures  
Period of employment used to calculate average annual compensation for the final average pay benefit 5 years
v3.19.3.a.u2
Employee and Agent Benefits - Benefit Obligation and Funded Status (Details) - USD ($)
$ in Millions
12 Months Ended
May 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Pension benefits        
Change in benefit obligation        
Benefit obligation at beginning of year   $ (3,239.2) $ (3,383.6)  
Service cost   (66.0) (73.0) $ (67.1)
Interest cost   (126.5) (119.5) (124.4)
Actuarial gain (loss) $ (59.0) (506.4) 220.9  
Benefits paid   123.6 109.6  
Plan amendments   122.4 6.4  
Benefit obligation at end of year   (3,692.1) (3,239.2) (3,383.6)
Change in plan assets        
Fair value of plan assets at beginning of year   2,498.2 2,542.2  
Actual return on plan assets $ 178.6 520.9 (122.2)  
Employer contribution   30.5 187.8  
Benefits paid   (123.6) (109.6)  
Fair value of plan assets at end of year   2,926.0 2,498.2 2,542.2
Amount recognized in statement of financial position        
Amount recognized in other liabilities   (766.1) (741.0)  
Total assets (liabilities) recognized in statement of financial position   (766.1) (741.0)  
Amount recognized in accumulated other comprehensive (income) loss        
Total net actuarial (gain) loss   737.5 673.3  
Prior service (benefit) cost   (137.8) (26.7)  
Pre-tax accumulated other comprehensive (income) loss   599.7 646.6  
Additional defined benefit plan disclosures        
Accumulated benefit obligation   3,599.5 3,029.0  
Market value of assets held in Rabbi trusts for benefit of nonqualified pension plan participants   377.8 348.8  
Other postretirement benefits        
Change in benefit obligation        
Benefit obligation at beginning of year   (98.9) (109.1)  
Service cost     (0.1) (0.1)
Interest cost   (3.7) (3.5) (3.9)
Actuarial gain (loss)   (4.8) 7.9  
Participant contributions   (4.4) (3.7)  
Benefits paid   12.2 9.7  
Plan amendments   (1.8)    
Other     (0.1)  
Benefit obligation at end of year   (101.4) (98.9) (109.1)
Change in plan assets        
Fair value of plan assets at beginning of year   643.9 696.8  
Actual return on plan assets   95.5 (47.7)  
Employer contribution   1.2 0.8  
Participant contributions   4.4 3.7  
Benefits paid   (12.2) (9.7)  
Fair value of plan assets at end of year   732.8 643.9 $ 696.8
Amount recognized in statement of financial position        
Amount recognized in other assets   635.1 546.9  
Amount recognized in other liabilities   (3.7) (1.9)  
Total assets (liabilities) recognized in statement of financial position   631.4 545.0  
Amount recognized in accumulated other comprehensive (income) loss        
Total net actuarial (gain) loss   (17.4) 40.2  
Prior service (benefit) cost   (7.3) (10.2)  
Pre-tax accumulated other comprehensive (income) loss   $ (24.7) $ 30.0  
v3.19.3.a.u2
Employee and Agent Benefits - Pension Plan Changes and Plan Gains/Losses (Details) - Pension benefits - USD ($)
$ in Millions
12 Months Ended
May 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Components of Net Periodic Benefit Cost (Income)        
Actuarial gain (loss) $ (59.0) $ (506.4) $ 220.9  
Total plan amendment gain 122.4      
Increase in benefit obligation 237.6      
Asset gain on plan assets $ 178.6 520.9 (122.2)  
Prior service cost (benefit) related to current year amendments       $ (23.1)
Contributions        
Contributions made by employer to fund qualified and nonqualified pension plans   $ 30.5 187.8  
Nonqualified benefit plans        
Components of Net Periodic Benefit Cost (Income)        
Prior service cost (benefit) related to current year amendments     $ (6.4)  
v3.19.3.a.u2
Employee and Agent Benefits - ABO in Excess of Plan Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Pension benefits      
Defined Benefit Plan Disclosures      
Prior service cost (benefit) related to current year amendments     $ (23.1)
Information for Defined Benefit Plans With an Accumulated Benefit Obligation in Excess of Plan Assets      
Projected benefit obligation for defined benefit plans with an accumulated benefit obligation in excess of plan assets $ 3,692.1 $ 3,239.2  
Accumulated benefit obligation for defined benefit plans with an accumulated benefit obligation in excess of plan assets 3,599.5 3,029.0  
Fair value of plan assets for defined benefit plans with an accumulated benefit obligation in excess of plan assets 2,926.0 2,498.2  
Other postretirement benefits      
Information for Defined Benefit Plans With an Accumulated Benefit Obligation in Excess of Plan Assets      
Accumulated benefit obligation for defined benefit plans with an accumulated benefit obligation in excess of plan assets $ 3.8 2.1  
Fair value of plan assets for defined benefit plans with an accumulated benefit obligation in excess of plan assets   $ 0.2  
v3.19.3.a.u2
Employee and Agent Benefits - Net Periodic Benefit Cost (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Plan actuarial gain and loss amortization disclosures      
Allowable corridor not used for amortization of actuarial gains and losses of qualified pension plan (as a percent) 10.00%    
Pension benefits      
Components of Net Periodic Benefit Cost (Income)      
Service cost $ 66.0 $ 73.0 $ 67.1
Interest cost $ 126.5 $ 119.5 $ 124.4
Interest cost, location on consolidated statements of operations pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization
Expected return on plan assets $ (148.8) $ (157.0) $ (144.2)
Expected return on plan assets, location on consolidated statements of operations pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization
Amortization of prior service (benefit) cost $ (11.3) $ (3.4) $ (2.3)
Amortization of prior service (benefit) cost, location on consolidated statements of operations pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization
Recognized net actuarial (gain) loss $ 70.1 $ 67.8 $ 68.0
Recognized net actuarial (gain) loss, location on consolidated statements of operations pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization
Net periodic benefit cost (income) $ 102.5 $ 99.9 $ 113.0
Other changes recognized in accumulated other comprehensive (income) loss      
Net actuarial (gain) loss 134.3 58.3  
Prior service (benefit) cost (122.4) (6.4)  
Amortization of net gain (loss) (70.1) (67.8)  
Amortization of prior service benefit (cost) 11.3 3.4  
Total recognized in pre-tax accumulated other comprehensive (income) loss (46.9) (12.5)  
Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss 55.6 87.4  
Estimated amounts that will be amortized from accumulated other comprehensive income into net periodic benefit cost during the next fiscal year      
Estimated net actuarial (gain) loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost during the next fiscal year 75.4    
Estimated prior service cost (benefit) that will be amortized from accumulated other comprehensive income into net periodic benefit cost during the next fiscal year (16.8)    
Other postretirement benefits      
Components of Net Periodic Benefit Cost (Income)      
Service cost   0.1 0.1
Interest cost $ 3.7 $ 3.5 $ 3.9
Interest cost, location on consolidated statements of operations pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization
Expected return on plan assets $ (33.2) $ (33.6) $ (27.5)
Expected return on plan assets, location on consolidated statements of operations pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization
Amortization of prior service (benefit) cost $ (1.2) $ (13.9) $ (34.6)
Amortization of prior service (benefit) cost, location on consolidated statements of operations pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization
Recognized net actuarial (gain) loss $ 0.1 $ (1.5)  
Recognized net actuarial (gain) loss, location on consolidated statements of operations pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization pfg:OperatingExpensesIncludingDeferredAcquisitionCostsCapitalizationAndAmortization
Net periodic benefit cost (income) $ (30.6) $ (45.4) $ (58.1)
Other changes recognized in accumulated other comprehensive (income) loss      
Net actuarial (gain) loss (57.5) 73.4  
Prior service (benefit) cost 1.7    
Amortization of net gain (loss) (0.1) 1.5  
Amortization of prior service benefit (cost) 1.2 13.9  
Total recognized in pre-tax accumulated other comprehensive (income) loss (54.7) 88.8  
Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss (85.3) $ 43.4  
Estimated amounts that will be amortized from accumulated other comprehensive income into net periodic benefit cost during the next fiscal year      
Estimated net actuarial (gain) loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost during the next fiscal year (0.1)    
Estimated prior service cost (benefit) that will be amortized from accumulated other comprehensive income into net periodic benefit cost during the next fiscal year $ (0.9)    
v3.19.3.a.u2
Employee and Agent Benefits - Weighted Average Assumptions (Details) - USD ($)
$ in Millions
5 Months Ended 7 Months Ended 12 Months Ended
May 31, 2019
Dec. 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Pension benefits          
Weighted-average assumptions used to determine benefit obligations as disclosed under the Obligations and Funded Status section          
Discount rate: Benefit obligation (as a percent)   3.25% 3.25% 4.15%  
Weighted-average assumptions used to determine net periodic benefit cost          
Discount rate: Net periodic benefit cost (as a percent) 4.15% 3.70% 3.70% 3.60% 4.15%
Expected long-term return on plan assets: Net periodic benefit cost (as a percent)     5.95% 6.30% 6.70%
Pension benefits, Cash balance benefit          
Weighted-average assumptions used to determine benefit obligations as disclosed under the Obligations and Funded Status section          
Rate of compensation increase: Benefit obligation (as a percent)   4.95% 4.95% 4.94%  
Weighted-average assumptions used to determine net periodic benefit cost          
Rate of compensation increase: Net periodic benefit cost (as a percent)     4.94% 4.96% 5.02%
Pension benefits, Traditional benefit          
Weighted-average assumptions used to determine benefit obligations as disclosed under the Obligations and Funded Status section          
Rate of compensation increase: Benefit obligation (as a percent)   2.98% 2.98% 2.73%  
Weighted-average assumptions used to determine net periodic benefit cost          
Rate of compensation increase: Net periodic benefit cost (as a percent)     2.73% 2.77% 2.82%
Other postretirement benefits          
Weighted-average assumptions used to determine benefit obligations as disclosed under the Obligations and Funded Status section          
Discount rate: Benefit obligation (as a percent)   2.95% 2.95% 3.95%  
Weighted-average assumptions used to determine net periodic benefit cost          
Discount rate: Net periodic benefit cost (as a percent)     3.95% 3.35% 3.75%
Expected long-term return on plan assets: Net periodic benefit cost (as a percent)     5.19% 4.85% 4.40%
Rate of compensation increase: Net periodic benefit cost (as a percent)       2.39% 2.44%
Assumed Health Care Cost Trend Rates          
Health care cost trend rate assumed for next year under age 65 (as a percent)   6.75% 6.75% 7.00%  
Health care cost trend rate assumed for next year age 65 and over (as a percent)   6.00% 6.00% 6.00%  
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate) (as a percent)   4.50% 4.50% 4.50%  
Year that the health care cost trend rate reaches the ultimate trend rate under age 65 (calendar year)     2029 2026  
Year that the health care cost trend rate reaches the ultimate trend rate age 65 and over (calendar year)     2026 2025  
Effect of one-percentage-point change in assumed health care cost trend rates          
Effect on accumulated postretirement benefit obligation of a one-percentage-point increase in assumed health care cost trend rates     $ (1.2)    
Effect on accumulated postretirement benefit obligation of a one-percentage-point decrease in assumed health care cost trend rates     $ 1.1    
Home office medical and life plans          
Weighted-average assumptions used to determine net periodic benefit cost          
Expected long-term return on plan assets: Net periodic benefit cost (as a percent)     5.25%    
Agent medical and life plans          
Weighted-average assumptions used to determine net periodic benefit cost          
Expected long-term return on plan assets: Net periodic benefit cost (as a percent)     4.95%    
Long-term care plans          
Weighted-average assumptions used to determine net periodic benefit cost          
Expected long-term return on plan assets: Net periodic benefit cost (as a percent)     4.35%    
Post-65 medical plans          
Weighted-average assumptions used to determine net periodic benefit cost          
Expected long-term return on plan assets: Net periodic benefit cost (as a percent)     5.00%    
v3.19.3.a.u2
Employee and Agent Benefits - Fair Value of Plan Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Pension benefits      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets $ 2,926.0 $ 2,498.2 $ 2,542.2
Pension benefits | Qualified benefit plans      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 2,926.0 2,498.2  
Pension benefits | Qualified benefit plans | Pooled separate account investments | U.S. large cap equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 509.7 387.7  
Pension benefits | Qualified benefit plans | Pooled separate account investments | U.S. small/mid cap equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 90.9 64.4  
Pension benefits | Qualified benefit plans | Pooled separate account investments | Balanced asset allocation portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 78.5 116.3  
Pension benefits | Qualified benefit plans | Pooled separate account investments | International equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 328.6 220.9  
Pension benefits | Qualified benefit plans | Pooled separate account investments | Real estate investment portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 193.5 133.6  
Pension benefits | Qualified benefit plans | Single client separate account investments | U.S. government and agencies      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 485.9 418.8  
Pension benefits | Qualified benefit plans | Single client separate account investments | States and political subdivisions      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 26.1 24.0  
Pension benefits | Qualified benefit plans | Single client separate account investments | Corporate debt securities      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 1,009.1 934.5  
Pension benefits | Qualified benefit plans | Single client separate account investments | Commercial mortgage-backed securities      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 32.7 30.7  
Pension benefits | Qualified benefit plans | Single client separate account investments | Other debt obligations      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 7.1 8.0  
Pension benefits | Qualified benefit plans | Single client separate account investments | Hedge funds      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 129.0 124.7  
Pension benefits | Qualified benefit plans | Single client separate account investments | Pooled separate account investment      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 31.5 23.9  
Pension benefits | Qualified benefit plans | Single client separate account investments | Other      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 3.4 10.7  
Pension benefits | Qualified benefit plans | Amount measured at net asset value      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 129.0 124.7  
Pension benefits | Qualified benefit plans | Amount measured at net asset value | Single client separate account investments | Hedge funds      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 129.0 124.7  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 1      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 485.9 419.1  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 1 | Single client separate account investments | U.S. government and agencies      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 485.9 418.8  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 1 | Single client separate account investments | Other      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets   0.3  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 2,311.1 1,954.4  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Pooled separate account investments | U.S. large cap equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 509.7 387.7  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Pooled separate account investments | U.S. small/mid cap equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 90.9 64.4  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Pooled separate account investments | Balanced asset allocation portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 78.5 116.3  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Pooled separate account investments | International equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 328.6 220.9  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Pooled separate account investments | Real estate investment portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 193.5 133.6  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Single client separate account investments | States and political subdivisions      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 26.1 24.0  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Single client separate account investments | Corporate debt securities      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 1,009.1 934.5  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Single client separate account investments | Commercial mortgage-backed securities      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 32.7 30.7  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Single client separate account investments | Other debt obligations      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 7.1 8.0  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Single client separate account investments | Pooled separate account investment      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 31.5 23.9  
Pension benefits | Qualified benefit plans | Fair value hierarchy Level 2 | Single client separate account investments | Other      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 3.4 10.4  
Other postretirement benefits      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 732.8 643.9 $ 696.8
Fair value of plan assets included in trust owned life insurance contract 101.8 86.1  
Other postretirement benefits | Cash and cash equivalents      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 0.6 0.3  
Other postretirement benefits | Fixed income investment funds      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 370.5 203.7  
Other postretirement benefits | U.S. equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 254.5 135.8  
Other postretirement benefits | International equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 107.2 61.2  
Other postretirement benefits | Alternative mutual fund portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets   235.4  
Other postretirement benefits | Real estate mutual fund      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets   7.5  
Other postretirement benefits | Fair value hierarchy Level 1      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 630.8 557.8  
Other postretirement benefits | Fair value hierarchy Level 1 | Cash and cash equivalents      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 0.6 0.3  
Other postretirement benefits | Fair value hierarchy Level 1 | Fixed income investment funds      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 331.0 166.2  
Other postretirement benefits | Fair value hierarchy Level 1 | U.S. equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 210.3 101.0  
Other postretirement benefits | Fair value hierarchy Level 1 | International equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 88.9 47.4  
Other postretirement benefits | Fair value hierarchy Level 1 | Alternative mutual fund portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets   235.4  
Other postretirement benefits | Fair value hierarchy Level 1 | Real estate mutual fund      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets   7.5  
Other postretirement benefits | Fair value hierarchy Level 2      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 102.0 86.1  
Other postretirement benefits | Fair value hierarchy Level 2 | Fixed income investment funds      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 39.5 37.5  
Other postretirement benefits | Fair value hierarchy Level 2 | U.S. equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets 44.2 34.8  
Other postretirement benefits | Fair value hierarchy Level 2 | International equity portfolios      
Defined benefit plan, fair value of plan assets      
Fair value of plan assets $ 18.3 $ 13.8  
v3.19.3.a.u2
Employee and Agent Benefits - Target Plan Asset Allocation (Details)
Dec. 31, 2019
Pension benefits | Qualified benefit plans | Fixed income security portfolios | Minimum  
Asset category target allocation  
Asset category target allocation 25.00%
Pension benefits | Qualified benefit plans | Fixed income security portfolios | Maximum  
Asset category target allocation  
Asset category target allocation 80.00%
Pension benefits | Qualified benefit plans | Equity portfolios | Minimum  
Asset category target allocation  
Asset category target allocation 5.00%
Pension benefits | Qualified benefit plans | Equity portfolios | Maximum  
Asset category target allocation  
Asset category target allocation 60.00%
Pension benefits | Qualified benefit plans | Real estate investment portfolios  
Asset category target allocation  
Asset category target allocation 10.00%
Pension benefits | Qualified benefit plans | Alternatives  
Asset category target allocation  
Asset category target allocation 5.00%
Other postretirement benefits | U.S. equity portfolios  
Asset category target allocation  
Asset category target allocation 35.00%
Other postretirement benefits | International equity portfolios  
Asset category target allocation  
Asset category target allocation 15.00%
Other postretirement benefits | Fixed income security portfolios  
Asset category target allocation  
Asset category target allocation 50.00%
v3.19.3.a.u2
Employee and Agent Benefits - Contributions and Estimated Future Benefit Payments (Details)
$ in Millions
Dec. 31, 2019
USD ($)
Pension benefits  
Estimated Future Benefit Payments  
Estimated future benefit payments, Year 1 $ 164.5
Estimated future benefit payments, Year 2 150.1
Estimated future benefit payments, Year 3 161.4
Estimated future benefit payments, Year 4 170.1
Estimated future benefit payments, Year 5 177.9
Estimated future benefit payments, Years 6-10 1,014.6
Pension benefits | Maximum  
Defined Benefit Plan Disclosures  
Possible contributions to be made during the next fiscal year to the qualified and nonqualified pension plans combined 35.0
Other postretirement benefits  
Estimated Future Benefit Payments  
Estimated future benefit payments, Year 1 14.0
Estimated future benefit payments, Year 2 12.2
Estimated future benefit payments, Year 3 11.5
Estimated future benefit payments, Year 4 10.6
Estimated future benefit payments, Year 5 9.8
Estimated future benefit payments, Years 6-10 $ 37.9
v3.19.3.a.u2
Employee and Agent Benefits - Supplemental Information, Qualified and Nonqualified Plans (Details) - Pension benefits - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Amount recognized in statement of financial position      
Amount recognized in other liabilities $ (766.1) $ (741.0)  
Total assets (liabilities) recognized in statement of financial position (766.1) (741.0)  
Amount recognized in accumulated other comprehensive (income) loss      
Total net actuarial loss 737.5 673.3  
Prior service benefit (137.8) (26.7)  
Pre-tax accumulated other comprehensive (income) loss 599.7 646.6  
Components of Net Periodic Benefit Cost (Income)      
Service cost 66.0 73.0 $ 67.1
Interest cost 126.5 119.5 124.4
Expected return on plan assets (148.8) (157.0) (144.2)
Amortization of prior service (benefit) cost (11.3) (3.4) (2.3)
Recognized net actuarial (gain) loss 70.1 67.8 68.0
Net periodic benefit cost (income) 102.5 99.9 $ 113.0
Other changes recognized in accumulated other comprehensive (income) loss      
Net actuarial (gain) loss 134.3 58.3  
Prior service (benefit) cost (122.4) (6.4)  
Amortization of net gain (loss) (70.1) (67.8)  
Amortization of prior service benefit (cost) 11.3 3.4  
Total recognized in pre-tax accumulated other comprehensive (income) loss (46.9) (12.5)  
Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss 55.6 87.4  
Qualified benefit plans      
Amount recognized in statement of financial position      
Amount recognized in other liabilities (258.7) (266.3)  
Total assets (liabilities) recognized in statement of financial position (258.7) (266.3)  
Amount recognized in accumulated other comprehensive (income) loss      
Total net actuarial loss 567.6 544.4  
Prior service benefit (110.3) (11.0)  
Pre-tax accumulated other comprehensive (income) loss 457.3 533.4  
Components of Net Periodic Benefit Cost (Income)      
Service cost 59.7 65.7  
Interest cost 108.0 102.0  
Expected return on plan assets (148.8) (157.0)  
Amortization of prior service (benefit) cost (7.8) (1.5)  
Recognized net actuarial (gain) loss 57.6 53.6  
Net periodic benefit cost (income) 68.7 62.8  
Other changes recognized in accumulated other comprehensive (income) loss      
Net actuarial (gain) loss 80.8 81.7  
Prior service (benefit) cost (107.2)    
Amortization of net gain (loss) (57.6) (53.6)  
Amortization of prior service benefit (cost) 7.8 1.5  
Total recognized in pre-tax accumulated other comprehensive (income) loss (76.2) 29.6  
Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss (7.5) 92.4  
Nonqualified benefit plans      
Amount recognized in statement of financial position      
Amount recognized in other liabilities (507.4) (474.7)  
Total assets (liabilities) recognized in statement of financial position (507.4) (474.7)  
Amount recognized in accumulated other comprehensive (income) loss      
Total net actuarial loss 169.9 128.9  
Prior service benefit (27.5) (15.7)  
Pre-tax accumulated other comprehensive (income) loss 142.4 113.2  
Components of Net Periodic Benefit Cost (Income)      
Service cost 6.3 7.3  
Interest cost 18.5 17.5  
Amortization of prior service (benefit) cost (3.5) (1.9)  
Recognized net actuarial (gain) loss 12.5 14.2  
Net periodic benefit cost (income) 33.8 37.1  
Other changes recognized in accumulated other comprehensive (income) loss      
Net actuarial (gain) loss 53.5 (23.4)  
Prior service (benefit) cost (15.2) (6.4)  
Amortization of net gain (loss) (12.5) (14.2)  
Amortization of prior service benefit (cost) 3.5 1.9  
Total recognized in pre-tax accumulated other comprehensive (income) loss 29.3 (42.1)  
Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss $ 63.1 $ (5.0)  
v3.19.3.a.u2
Employee and Agent Benefits - Defined Contribution and Deferred Compensation Plans (Details) - USD ($)
shares in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Defined Contribution Plan Disclosures      
Number of common stock shares allocated participants in the employee stock ownership plan 2.2 2.4  
Fair value of employee stock ownership plan $ 119,800,000 $ 105,100,000  
Pension benefits | Qualified benefit plans      
Defined Contribution Plan Disclosures      
Maximum amount of compensation eligible participants could contribute to defined contribution plans 19,000    
Amount contributed by the employer to defined contribution plans 55,300,000 53,400,000 $ 48,900,000
Pension benefits | Nonqualified benefit plans      
Defined Contribution Plan Disclosures      
Amount contributed by the employer to defined contribution plans $ 3,200,000 $ 3,400,000 $ 3,800,000
Defined contribution pension benefits - Grandfathered Choice Participant | Qualified benefit plans      
Defined Contribution Plan Disclosures      
Eligibility age to be able to elect to retain benefits in defined contribution plan 47 years    
Minimum years of service to be able to elect to retain benefits in defined contribution plan 10 years    
Contribution rate of employer to match participant's contributions (as a percent) 50.00%    
Maximum percent of participant's compensation matched by employer (as a percent) 3.00%    
Defined contribution pension benefits - Grandfathered Choice Participant | Nonqualified benefit plans      
Defined Contribution Plan Disclosures      
Contribution rate of employer to match participant's contributions (as a percent) 50.00%    
Maximum percent of participant's compensation matched by employer (as a percent) 3.00%    
Defined contribution pension benefits - All other participants | Qualified benefit plans      
Defined Contribution Plan Disclosures      
Contribution rate of employer to match participant's contributions (as a percent) 75.00%    
Maximum percent of participant's compensation matched by employer (as a percent) 6.00%    
Defined contribution pension benefits - All other participants | Nonqualified benefit plans      
Defined Contribution Plan Disclosures      
Contribution rate of employer to match participant's contributions (as a percent) 75.00%    
Maximum percent of participant's compensation matched by employer (as a percent) 6.00%    
v3.19.3.a.u2
Contingencies, Guarantees, Indemnifications and Leases - Guarantees and Indemnifications (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Guaranty Funds    
Undiscounted liability balance for guaranty fund assessments $ 21.7 $ 22.2
Premium tax offsets 10.0 $ 10.4
Guarantees to third parties primarily related to former subsidiaries and joint ventures    
Guarantees and Indemnifications    
Maximum exposure under guarantees 118.0  
Guarantees related to P-Caps contingent funding agreements    
Guarantees and Indemnifications    
Maximum exposure under guarantees 750.0  
Lawsuit alleging breach of fiduciary duty related to PFIO    
Loss contingencies - disclosures    
Estimated losses accrued related to legal matters $ 0.0  
v3.19.3.a.u2
Contingencies, Guarantees, Indemnifications and Leases - Leases (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Assets      
Operating lease assets $ 190.0    
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Property, Plant and Equipment, Net    
Finance lease assets $ 31.4    
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Property, Plant and Equipment, Net    
Total lease assets $ 221.4    
Liabilities      
Operating lease liabilities $ 197.5    
Operating Lease, Liability, Statement of Financial Position [Extensible List] Other Liabilities    
Finance lease liabilities $ 31.8    
Finance Lease, Liability, Statement of Financial Position [Extensible List] Other Liabilities    
Total lease liabilities $ 229.3    
Capital lease assets   $ 32.6  
Finance lease cost:      
Amortization of right-of-use assets 14.6    
Interest on lease liabilities 1.0    
Operating lease cost 55.8    
Other lease cost 8.0    
Sublease income (1.7)    
Total lease cost 77.7    
Operating lease rental expense   36.7 $ 44.0
Capital lease depreciation expense   $ 12.9 $ 13.4
Payments for operating leases 56.1    
Payments for finance leases 15.1    
Operating leases, payments due for the twelve months ending December 31:      
2020 53.9    
2021 43.7    
2022 35.3    
2023 25.9    
2024 18.3    
2025 and thereafter 51.7    
Total lease payments 228.8    
Less: interest 31.3    
Present value of lease liabilities 197.5    
Finance leases, payments due for the twelve months ending December 31:      
2020 14.8    
2021 11.7    
2022 3.9    
2023 1.9    
2024 0.5    
2025 and thereafter 0.1    
Total lease payments 32.9    
Less: interest 1.1    
Present value of lease liabilities 31.8    
Total leases, payments due for the twelve months ending December 31:      
2020 68.7    
2021 55.4    
2022 39.2    
2023 27.8    
2024 18.8    
2025 and thereafter 51.8    
Total lease payments 261.7    
Less: interest 32.4    
Present value of lease liabilities $ 229.3    
Weighted-average remaining lease term and weighted-average discount rates      
Weighted average remaining lease term, Operating leases 6 years 8 months 12 days    
Weighted average remaining lease term, Finance leases 2 years 7 months 6 days    
Weighted-average discount rate, Operating leases 3.90%    
Weighted-average discount rate, Finance leases 2.70%    
v3.19.3.a.u2
Stockholders' Equity - Common Stock Dividends and Reconciliation of Outstanding Common Shares (Details) - Common stock - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
1 Months Ended 12 Months Ended
Nov. 30, 2018
May 31, 2018
May 31, 2017
Feb. 29, 2016
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Common Stock Dividends              
Dividends declared per common share (in dollars per share)         $ 2.18 $ 2.10 $ 1.87
Reconciliation of Outstanding Common Shares              
Outstanding shares at beginning of period         279.5 289.0 287.7
Shares issued         2.6 2.6 4.9
Treasury stock acquired         (5.5) (12.1) (3.6)
Outstanding shares at end of period         276.6 279.5 289.0
Common stock share repurchase disclosures              
Share repurchase program, maximum authorized amount (in dollars) $ 500.0 $ 300.0 $ 250.0 $ 400.0      
v3.19.3.a.u2
Stockholders' Equity - Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Other Comprehensive Income (Loss)      
Other comprehensive income (loss), pre-tax $ 3,326.3 $ (2,258.6) $ 1,141.1
Other comprehensive income (loss), tax (719.6) 422.9 (296.8)
Other comprehensive income (loss) 2,606.7 (1,835.7) 844.3
Net unrealized gains (losses) on available-for-sale securities including NCI      
Other Comprehensive Income (Loss)      
Other comprehensive income (loss) before reclassifications, pre-tax 4,414.1 (2,517.5) 1,074.2
Adjustments for assumed changes in amortization patterns, pre-tax (293.0) 185.9 (26.2)
Adjustments for assumed changes in policyholder liabilities, pre-tax (847.7) 346.9 (184.6)
Other comprehensive income (loss), pre-tax 3,320.8 (1,928.3) 931.2
Other comprehensive income (loss) before reclassifications, tax (947.0) 515.4 (341.6)
Reclassification from accumulated other comprehensive income, tax (9.7) (5.3) (23.5)
Adjustments for assumed changes in amortization patterns, tax 61.5 (39.1) 9.3
Adjustments for assumed changes in policyholder liabilities, tax 190.5 (72.3) 64.1
Other comprehensive income (loss), tax (704.7) 398.7 (291.7)
Other comprehensive income (loss) before reclassifications, after-tax 3,467.1 (2,002.1) 732.6
Reclassification from accumulated other comprehensive income, after-tax 37.7 51.1 44.3
Adjustments for assumed changes in amortization patterns, after-tax (231.5) 146.8 (16.9)
Adjustments for assumed changes in policyholder liabilities, after-tax (657.2) 274.6 (120.5)
Other comprehensive income (loss) 2,616.1 (1,529.6) 639.5
Net unrealized gains (losses) on available-for-sale securities including NCI | Net realized capital gains (losses)      
Other Comprehensive Income (Loss)      
Reclassification from accumulated other comprehensive income, pre-tax 47.4 56.4 67.8
Noncredit component of impairment losses on fixed maturities available-for-sale including NCI      
Other Comprehensive Income (Loss)      
Other comprehensive income (loss) before reclassifications, pre-tax 5.2 39.7 53.1
Adjustments for assumed changes in amortization patterns, pre-tax (1.4) (5.3) (6.4)
Adjustments for assumed changes in policyholder liabilities, pre-tax   (0.8) (1.3)
Other comprehensive income (loss), pre-tax 3.8 33.6 45.4
Other comprehensive income (loss) before reclassifications, tax (1.1) (8.4) (17.0)
Adjustments for assumed changes in amortization patterns, tax 0.3 1.1 2.3
Adjustments for assumed changes in policyholder liabilities, tax   0.1 0.5
Other comprehensive income (loss), tax (0.8) (7.2) (14.2)
Other comprehensive income (loss) before reclassifications, after-tax 4.1 31.3 36.1
Adjustments for assumed changes in amortization patterns, after-tax (1.1) (4.2) (4.1)
Adjustments for assumed changes in policyholder liabilities, after-tax   (0.7) (0.8)
Other comprehensive income (loss) 3.0 26.4 31.2
Net unrealized gains (losses) on derivative instruments including NCI      
Other Comprehensive Income (Loss)      
Other comprehensive income (loss) before reclassifications, pre-tax (0.5)    
Reclassification from accumulated other comprehensive income, pre-tax (23.9)    
Adjustments for assumed changes in amortization patterns, pre-tax 3.1    
Adjustments for assumed changes in policyholder liabilities, pre-tax 7.9    
Other comprehensive income (loss), pre-tax (13.4)    
Reclassification from accumulated other comprehensive income, tax 4.9    
Adjustments for assumed changes in amortization patterns, tax (0.6)    
Adjustments for assumed changes in policyholder liabilities, tax (1.9)    
Other comprehensive income (loss), tax 2.4    
Other comprehensive income (loss) before reclassifications, after-tax (0.5)    
Reclassification from accumulated other comprehensive income, after-tax (19.0)    
Adjustments for assumed changes in amortization patterns, after-tax 2.5    
Adjustments for assumed changes in policyholder liabilities, after-tax 6.0    
Other comprehensive income (loss) (11.0)    
Net unrealized gains (losses) on derivative instruments including NCI      
Other Comprehensive Income (Loss)      
Other comprehensive income (loss) before reclassifications, pre-tax   50.4 (46.7)
Reclassification from accumulated other comprehensive income, pre-tax   (40.1) (31.6)
Adjustments for assumed changes in amortization patterns, pre-tax   0.3 3.9
Adjustments for assumed changes in policyholder liabilities, pre-tax   5.7 9.6
Other comprehensive income (loss), pre-tax   16.3 (64.8)
Other comprehensive income (loss) before reclassifications, tax   (3.4) 16.0
Reclassification from accumulated other comprehensive income, tax   4.2 10.8
Adjustments for assumed changes in amortization patterns, tax   (0.1) (1.3)
Adjustments for assumed changes in policyholder liabilities, tax   (1.0) (3.3)
Other comprehensive income (loss), tax   (0.3) 22.2
Other comprehensive income (loss) before reclassifications, after-tax   47.0 (30.7)
Reclassification from accumulated other comprehensive income, after-tax   (35.9) (20.8)
Adjustments for assumed changes in amortization patterns, after-tax   0.2 2.6
Adjustments for assumed changes in policyholder liabilities, after-tax   4.7 6.3
Other comprehensive income (loss)   16.0 (42.6)
Foreign currency translation adjustment including NCI      
Other Comprehensive Income (Loss)      
Other comprehensive income (loss) before reclassifications, pre-tax (112.3)   171.6
Reclassification from accumulated other comprehensive income, pre-tax 26.1   2.6
Other comprehensive income (loss), pre-tax (86.2) (303.9) 174.2
Other comprehensive income (loss) before reclassifications, tax 7.5   4.7
Other comprehensive income (loss), tax 7.5 16.3 4.7
Other comprehensive income (loss) before reclassifications, after-tax (104.8)   176.3
Reclassification from accumulated other comprehensive income, after-tax 26.1    
Other comprehensive income (loss) (78.7) (287.6) 178.9
Foreign currency translation adjustment including NCI | Net realized capital gains (losses)      
Other Comprehensive Income (Loss)      
Reclassification from accumulated other comprehensive income, after-tax     2.6
Foreign currency translation adjustment relating to noncontrolling interest | Net realized capital gains (losses)      
Other Comprehensive Income (Loss)      
Reclassification from accumulated other comprehensive income, pre-tax 5.7   2.0
Unrecognized postretirement benefit obligation including NCI      
Other Comprehensive Income (Loss)      
Other comprehensive income (loss) before reclassifications, pre-tax 43.6 (125.3) 24.0
Other comprehensive income (loss), pre-tax 101.3 (76.3) 55.1
Other comprehensive income (loss) before reclassifications, tax (8.6) 29.4 (3.8)
Reclassification from accumulated other comprehensive income, tax (15.4) (14.0) (14.0)
Other comprehensive income (loss), tax (24.0) 15.4 (17.8)
Other comprehensive income (loss) before reclassifications, after-tax 35.0 (95.9) 20.2
Reclassification from accumulated other comprehensive income, after-tax 42.3 35.0 17.1
Other comprehensive income (loss) 77.3 (60.9) 37.3
Unrecognized postretirement benefit obligation including NCI | Operating expense      
Other Comprehensive Income (Loss)      
Reclassification from accumulated other comprehensive income, pre-tax $ 57.7 $ 49.0 $ 31.1
v3.19.3.a.u2
Stockholders' Equity - AOCI and Noncontrolling Interest (Details) - USD ($)
$ in Millions
12 Months Ended
Jan. 01, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Change in accumulated other comprehensive income (loss) rollforward        
Balances   $ 11,390.0    
Purchase of subsidiary shares from noncontrolling interest   (0.6) $ (24.0) $ (8.9)
Balances   14,618.0 11,390.0  
Change in redeemable noncontrolling interest rollforward        
Redeemable noncontrolling interest, balance at beginning of period $ 101.3 391.2 101.3 97.5
Net income (loss) attributable to redeemable noncontrolling interest   33.6 (2.1) 7.0
Redeemable noncontrolling interest of deconsolidated entities   (505.4) (10.6) (61.1)
Contributions from redeemable noncontrolling interest   402.1 355.0 94.1
Distributions to redeemable noncontrolling interest   (66.3) (36.8) (39.0)
Purchase of subsidiary shares from redeemable noncontrolling interest   (1.1) (7.1) (4.4)
Change in redemption value of redeemable noncontrolling interest   5.4 (7.0) 5.9
Stock-based compensation attributable to redeemable noncontrolling interest   0.1 0.1  
Other comprehensive income (loss) attributable to redeemable noncontrolling interest   5.3 (1.6) 1.3
Redeemable noncontrolling interest, balance at end of period   264.9 391.2 101.3
ASU 2014-09 - Revenue recognition        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change (39.7)   (39.7)  
Accumulated other comprehensive income (loss)        
Change in accumulated other comprehensive income (loss) rollforward        
Balances 165.5 (1,565.1) 165.5 (675.2)
Other comprehensive income (loss) during the period, net of adjustments   2,518.6 (1,907.8) 768.3
Amounts reclassified from accumulated other comprehensive income (loss)   84.4 76.6 72.4
Other comprehensive income (loss) attributable to Principal Financial Group, Inc.   2,603.0 (1,831.2) 840.7
Purchase of subsidiary shares from noncontrolling interest     (1.6)  
Balances   1,037.9 (1,565.1) 165.5
Accumulated other comprehensive income (loss) | ASU 2016-01 - Equity investments        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change (1.0)   (1.0)  
Accumulated other comprehensive income (loss) | ASU 2014-09 - Revenue recognition        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change     25.6  
Accumulated other comprehensive income (loss) | ASU 2018-02 - Reclassification of certain tax effects        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change 77.6   77.6  
Net unrealized gains (losses) on available-for-sale securities        
Change in accumulated other comprehensive income (loss) rollforward        
Balances 1,470.7 190.0 1,470.7 831.2
Other comprehensive income (loss) during the period, net of adjustments   2,578.3 (1,580.6) 595.2
Amounts reclassified from accumulated other comprehensive income (loss)   37.7 51.1 44.3
Other comprehensive income (loss) attributable to Principal Financial Group, Inc.   2,616.0 (1,529.5) 639.5
Balances   2,806.0 190.0 1,470.7
Net unrealized gains (losses) on available-for-sale securities | ASU 2016-01 - Equity investments        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change     (1.0)  
Net unrealized gains (losses) on available-for-sale securities | ASU 2018-02 - Reclassification of certain tax effects        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change     249.8  
Noncredit component of impairment losses on fixed maturities available-for-sale        
Change in accumulated other comprehensive income (loss) rollforward        
Balances (58.3) (47.1) (58.3) (89.5)
Amounts reclassified from accumulated other comprehensive income (loss)   3.0 26.4 31.2
Other comprehensive income (loss) attributable to Principal Financial Group, Inc.   3.0 26.4 31.2
Balances   (44.1) (47.1) (58.3)
Noncredit component of impairment losses on fixed maturities available-for-sale | ASU 2018-02 - Reclassification of certain tax effects        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change     (15.2)  
Net unrealized gains (losses) on derivative instruments        
Change in accumulated other comprehensive income (loss) rollforward        
Balances 42.7 64.4 42.7 85.3
Other comprehensive income (loss) during the period, net of adjustments   8.0 51.9 (21.8)
Amounts reclassified from accumulated other comprehensive income (loss)   (19.0) (35.9) (20.8)
Other comprehensive income (loss) attributable to Principal Financial Group, Inc.   (11.0) 16.0 (42.6)
Balances   53.4 64.4 42.7
Net unrealized gains (losses) on derivative instruments | ASU 2018-02 - Reclassification of certain tax effects        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change     5.7  
Foreign currency translation adjustment        
Change in accumulated other comprehensive income (loss) rollforward        
Balances (918.5) (1,259.5) (918.5) (1,093.8)
Other comprehensive income (loss) during the period, net of adjustments   (102.7) (283.2) 174.7
Amounts reclassified from accumulated other comprehensive income (loss)   20.4   0.6
Other comprehensive income (loss) attributable to Principal Financial Group, Inc.   (82.3) (283.2) 175.3
Purchase of subsidiary shares from noncontrolling interest     (1.6)  
Balances   (1,341.8) (1,259.5) (918.5)
Foreign currency translation adjustment | ASU 2014-09 - Revenue recognition        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change     25.6  
Foreign currency translation adjustment | ASU 2018-02 - Reclassification of certain tax effects        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change     (81.8)  
Unrecognized postretirement benefit obligation        
Change in accumulated other comprehensive income (loss) rollforward        
Balances $ (371.1) (512.9) (371.1) (408.4)
Other comprehensive income (loss) during the period, net of adjustments   35.0 (95.9) 20.2
Amounts reclassified from accumulated other comprehensive income (loss)   42.3 35.0 17.1
Other comprehensive income (loss) attributable to Principal Financial Group, Inc.   77.3 (60.9) 37.3
Balances   $ (435.6) (512.9) $ (371.1)
Unrecognized postretirement benefit obligation | ASU 2018-02 - Reclassification of certain tax effects        
Change in accumulated other comprehensive income (loss) rollforward        
Effects of implementation of accounting change     $ (80.9)  
v3.19.3.a.u2
Stockholders' Equity - Dividend Limitations (Details) - Principal Life Insurance Company only - USD ($)
$ in Millions
12 Months Ended
May 01, 2017
Dec. 31, 2019
Dividend Limitations    
Dividend limitation as percentage of statutory policyholder surplus (as a percent)   10.00%
Dividends that can be paid in upcoming calendar year without exceeding statutory limitation   $ 1,060.3
Extraordinary dividend to parent $ 1,068.4  
v3.19.3.a.u2
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale $ 70,106.2 $ 60,108.5
Fixed maturities, trading 675.9 636.1
Equity securities 1,879.4 1,843.7
Derivative instruments, assets 294.7 194.0
Separate account assets 165,468.0 144,987.9
Investment and universal life contracts $ (214.2) (45.2)
Fixed maturities valued using internal pricing models    
Fixed maturities classified as Level 3 assets, percent valued using internal pricing models (as a percent) 1.00%  
Amount measured at net asset value    
Assets (liabilities) measured at fair value on a recurring basis    
Unfunded commitments of investments measured using NAV $ 19.9 32.0
U.S. government and agencies    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 1,724.2 1,441.0
Non-U.S. governments    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 996.2 890.5
States and political subdivisions    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 7,490.0 6,225.7
Corporate debt securities    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 40,647.4 35,539.3
Residential mortgage-backed pass-through securities    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 2,982.4 2,460.6
Commercial mortgage-backed securities    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 4,850.2 3,945.6
Collateralized debt obligations    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 3,215.3 2,420.8
Other debt obligations    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 8,200.5 7,185.0
Recurring Fair Value Measurements    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 70,106.2 60,108.5
Fixed maturities, trading 675.9 636.1
Equity securities 1,879.4 1,843.7
Derivative instruments, assets 294.7 194.0
Other investments 796.0 828.6
Cash equivalents 1,299.0 1,775.9
Sub-total excluding separate account assets 75,051.2 65,386.8
Separate account assets 165,468.0 144,987.9
Total assets 240,519.2 210,374.7
Investment and universal life contracts (214.2) (45.2)
Derivative liabilities (217.7) (157.1)
Other liabilities (98.9) (91.5)
Total liabilities (530.8) (293.8)
Net assets 239,988.4 210,080.9
Recurring Fair Value Measurements | Amount measured at net asset value    
Assets (liabilities) measured at fair value on a recurring basis    
Other investments 78.3 75.4
Sub-total excluding separate account assets 78.3 75.4
Separate account assets 129.0 124.6
Total assets 207.3 200.0
Net assets 207.3 200.0
Recurring Fair Value Measurements | Fair value hierarchy Level 1    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 1,339.9 1,049.7
Fixed maturities, trading 0.5  
Equity securities 645.8 661.2
Other investments 335.2 125.9
Cash equivalents 40.9 46.3
Sub-total excluding separate account assets 2,362.3 1,883.1
Separate account assets 95,652.5 79,572.0
Total assets 98,014.8 81,455.1
Net assets 98,014.8 81,455.1
Recurring Fair Value Measurements | Fair value hierarchy Level 2    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 68,381.4 58,920.0
Fixed maturities, trading 675.1 636.1
Equity securities 1,233.6 1,182.5
Derivative instruments, assets 265.4 175.4
Other investments 343.5 610.1
Cash equivalents 1,258.1 1,729.6
Sub-total excluding separate account assets 72,157.1 63,253.7
Separate account assets 60,718.5 56,675.8
Total assets 132,875.6 119,929.5
Derivative liabilities (201.4) (141.6)
Other liabilities (98.9) (91.5)
Total liabilities (300.3) (233.1)
Net assets 132,575.3 119,696.4
Recurring Fair Value Measurements | Fair value hierarchy Level 3    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 384.9 138.8
Fixed maturities, trading 0.3  
Derivative instruments, assets 29.3 18.6
Other investments 39.0 17.2
Sub-total excluding separate account assets 453.5 174.6
Separate account assets 8,968.0 8,615.5
Total assets 9,421.5 8,790.1
Investment and universal life contracts (214.2) (45.2)
Derivative liabilities (16.3) (15.5)
Total liabilities (230.5) (60.7)
Net assets 9,191.0 8,729.4
Recurring Fair Value Measurements | U.S. government and agencies    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 1,724.2 1,441.0
Recurring Fair Value Measurements | U.S. government and agencies | Fair value hierarchy Level 1    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 1,320.0 1,027.8
Recurring Fair Value Measurements | U.S. government and agencies | Fair value hierarchy Level 2    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 404.2 413.2
Recurring Fair Value Measurements | Non-U.S. governments    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 996.2 890.5
Recurring Fair Value Measurements | Non-U.S. governments | Fair value hierarchy Level 1    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 1.4 2.7
Recurring Fair Value Measurements | Non-U.S. governments | Fair value hierarchy Level 2    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 994.8 883.2
Recurring Fair Value Measurements | Non-U.S. governments | Fair value hierarchy Level 3    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale   4.6
Recurring Fair Value Measurements | States and political subdivisions    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 7,490.0 6,225.7
Recurring Fair Value Measurements | States and political subdivisions | Fair value hierarchy Level 2    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 7,490.0 6,225.7
Recurring Fair Value Measurements | Corporate debt securities    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 40,647.4 35,539.3
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 1    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 18.5 19.2
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 2    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 40,547.2 35,462.2
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 3    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 81.7 57.9
Recurring Fair Value Measurements | Residential mortgage-backed pass-through securities    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 2,982.4 2,460.6
Recurring Fair Value Measurements | Residential mortgage-backed pass-through securities | Fair value hierarchy Level 2    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 2,982.4 2,460.6
Recurring Fair Value Measurements | Commercial mortgage-backed securities    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 4,850.2 3,945.6
Recurring Fair Value Measurements | Commercial mortgage-backed securities | Fair value hierarchy Level 2    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 4,837.3 3,936.1
Recurring Fair Value Measurements | Commercial mortgage-backed securities | Fair value hierarchy Level 3    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 12.9 9.5
Recurring Fair Value Measurements | Collateralized debt obligations    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 3,215.3 2,420.8
Recurring Fair Value Measurements | Collateralized debt obligations | Fair value hierarchy Level 2    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 3,016.3 2,412.5
Recurring Fair Value Measurements | Collateralized debt obligations | Fair value hierarchy Level 3    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 199.0 8.3
Recurring Fair Value Measurements | Other debt obligations    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 8,200.5 7,185.0
Recurring Fair Value Measurements | Other debt obligations | Fair value hierarchy Level 2    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale 8,109.2 7,126.5
Recurring Fair Value Measurements | Other debt obligations | Fair value hierarchy Level 3    
Assets (liabilities) measured at fair value on a recurring basis    
Fixed maturities, available-for-sale $ 91.3 $ 58.5
v3.19.3.a.u2
Fair Value Measurements - Changes in Level 3 Fair Value Measurements (Details) - Recurring Fair Value Measurements - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, net derivative assets $ 3.1 $ 18.1 $ 11.3
Total realized/unrealized gains (losses) included in net income, net derivative assets (0.8) (20.2) 3.1
Net purchases, sales, issuances and settlements, net derivative assets 10.7 5.2 3.7
Ending balance, net derivative assets 13.0 3.1 18.1
Changes in unrealized gains (losses) included in net income relating to positions still held, net derivative assets 5.3 (18.4) 4.9
Gross purchases, sales, issuances and settlements      
Purchases, net derivative assets (liabilities) (1.9) 1.8 1.5
Sales, net derivative assets (liabilities) 8.8 3.4 2.2
Net purchases, sales, issuances and settlements, net derivative assets (liabilities) 10.7 5.2 3.7
Investment and universal life contracts      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, liabilities (45.2) (160.3) (176.5)
Total realized/unrealized gains (losses) included in net income, liabilities (145.5) 107.5 8.4
Total realized/unrealized gains (losses) included in other comprehensive income, liabilities (0.2) 0.1 0.4
Net purchases, sales, issuances and settlements, liabilities (23.3) 7.5 7.4
Ending balance, liabilities (214.2) (45.2) (160.3)
Changes in unrealized gains (losses) included in net income relating to positions still held, liabilities (146.0) 109.9 5.7
Gross purchases, sales, issuances and settlements      
Issuances, liabilities (33.4) 2.8 (0.2)
Settlements, liabilities 10.1 4.7 7.6
Net purchases, sales, issuances and settlements, liabilities (23.3) 7.5 7.4
Other liabilities      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, liabilities     (59.9)
Total realized/unrealized gains (losses) included in net income, liabilities     (0.1)
Net purchases, sales, issuances and settlements, liabilities     60.0
Gross purchases, sales, issuances and settlements      
Settlements, liabilities     60.0
Net purchases, sales, issuances and settlements, liabilities     60.0
Fixed maturities | Available-for-sale      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets 138.8 273.3 517.4
Total realized/unrealized gains (losses) included in net income, assets (6.4) (5.4) (15.2)
Total realized/unrealized gains (losses) included in other comprehensive income, assets 7.6   15.8
Net purchases, sales, issuances and settlements, assets 237.5 197.2 (42.4)
Transfers into Level 3, assets 86.0 59.3 232.3
Transfers out of Level 3, assets (78.6) (385.6) (434.6)
Ending balance, assets 384.9 138.8 273.3
Changes in unrealized gains (losses) included in net income relating to positions still held, assets (5.5) (2.8) (5.1)
Gross purchases, sales, issuances and settlements      
Purchases, assets 276.7 258.5 202.6
Sales, assets (1.4) (10.1) (174.4)
Settlements, assets (37.8) (51.2) (70.6)
Net purchases, sales, issuances and settlements, assets 237.5 197.2 (42.4)
Fixed maturities | Trading      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets     92.9
Total realized/unrealized gains (losses) included in net income, assets     (2.4)
Net purchases, sales, issuances and settlements, assets 0.3 3.7 (92.4)
Transfers into Level 3, assets     1.9
Transfers out of Level 3, assets   (3.7)  
Ending balance, assets 0.3    
Gross purchases, sales, issuances and settlements      
Purchases, assets 0.5 3.7  
Settlements, assets (0.2)   (92.4)
Net purchases, sales, issuances and settlements, assets 0.3 3.7 (92.4)
Non-U.S. governments | Available-for-sale      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets 4.6 7.4 62.1
Total realized/unrealized gains (losses) included in net income, assets     (0.2)
Total realized/unrealized gains (losses) included in other comprehensive income, assets   (0.1) (0.3)
Net purchases, sales, issuances and settlements, assets (4.6) (1.4) (19.0)
Transfers out of Level 3, assets   (1.3) (35.2)
Ending balance, assets   4.6 7.4
Changes in unrealized gains (losses) included in net income relating to positions still held, assets     (0.3)
Gross purchases, sales, issuances and settlements      
Purchases, assets     67.4
Sales, assets     (85.0)
Settlements, assets (4.6) (1.4) (1.4)
Net purchases, sales, issuances and settlements, assets (4.6) (1.4) (19.0)
Corporate debt securities | Available-for-sale      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets 57.9 128.0 259.1
Total realized/unrealized gains (losses) included in net income, assets   (1.0) (2.3)
Total realized/unrealized gains (losses) included in other comprehensive income, assets 2.5 (0.1) 3.5
Net purchases, sales, issuances and settlements, assets 17.2 (15.2) (29.2)
Transfers into Level 3, assets 4.1 1.0 22.2
Transfers out of Level 3, assets   (54.8) (125.3)
Ending balance, assets 81.7 57.9 128.0
Changes in unrealized gains (losses) included in net income relating to positions still held, assets     (0.8)
Gross purchases, sales, issuances and settlements      
Purchases, assets 41.9 12.9 112.3
Sales, assets (1.4) (10.1) (89.4)
Settlements, assets (23.3) (18.0) (52.1)
Net purchases, sales, issuances and settlements, assets 17.2 (15.2) (29.2)
Commercial mortgage-backed securities | Available-for-sale      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets 9.5 10.6 71.1
Total realized/unrealized gains (losses) included in net income, assets (3.8) (3.5) (12.7)
Total realized/unrealized gains (losses) included in other comprehensive income, assets 3.4 0.2 11.1
Net purchases, sales, issuances and settlements, assets 2.4 0.1 (0.7)
Transfers into Level 3, assets 3.7 3.6 26.3
Transfers out of Level 3, assets (2.3) (1.5) (84.5)
Ending balance, assets 12.9 9.5 10.6
Changes in unrealized gains (losses) included in net income relating to positions still held, assets (2.9) (1.9) (4.0)
Gross purchases, sales, issuances and settlements      
Purchases, assets 2.4    
Settlements, assets   0.1 (0.7)
Net purchases, sales, issuances and settlements, assets 2.4 0.1 (0.7)
Collateralized debt obligations | Available-for-sale      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets 8.3 125.0 33.6
Total realized/unrealized gains (losses) included in net income, assets (2.6) (0.9)  
Total realized/unrealized gains (losses) included in other comprehensive income, assets 0.9 0.2 1.7
Net purchases, sales, issuances and settlements, assets 122.5 66.3 7.3
Transfers into Level 3, assets 69.9 54.7 183.7
Transfers out of Level 3, assets   (237.0) (101.3)
Ending balance, assets 199.0 8.3 125.0
Changes in unrealized gains (losses) included in net income relating to positions still held, assets (2.6) (0.9)  
Gross purchases, sales, issuances and settlements      
Purchases, assets 124.7 93.6 22.9
Settlements, assets (2.2) (27.3) (15.6)
Net purchases, sales, issuances and settlements, assets 122.5 66.3 7.3
Other debt obligations | Available-for-sale      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets 58.5 2.3 91.5
Total realized/unrealized gains (losses) included in other comprehensive income, assets 0.8 (0.2) (0.2)
Net purchases, sales, issuances and settlements, assets 100.0 147.4 (0.8)
Transfers into Level 3, assets 8.3   0.1
Transfers out of Level 3, assets (76.3) (91.0) (88.3)
Ending balance, assets 91.3 58.5 2.3
Gross purchases, sales, issuances and settlements      
Purchases, assets 107.7 152.0  
Settlements, assets (7.7) (4.6) (0.8)
Net purchases, sales, issuances and settlements, assets 100.0 147.4 (0.8)
Equity securities      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets   2.7  
Total realized/unrealized gains (losses) included in net income, assets   12.9  
Net purchases, sales, issuances and settlements, assets   (15.6)  
Ending balance, assets     2.7
Gross purchases, sales, issuances and settlements      
Sales, assets   (15.6)  
Net purchases, sales, issuances and settlements, assets   (15.6)  
Equity securities | Available-for-sale      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets   2.7 2.7
Ending balance, assets     2.7
Equity securities | Trading      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Net purchases, sales, issuances and settlements, assets     (0.7)
Transfers into Level 3, assets     0.7
Gross purchases, sales, issuances and settlements      
Settlements, assets     (0.7)
Net purchases, sales, issuances and settlements, assets     (0.7)
Other investments      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets 17.2 6.5 36.9
Total realized/unrealized gains (losses) included in net income, assets 6.0 1.7 3.9
Net purchases, sales, issuances and settlements, assets 5.8 9.0 (34.3)
Transfers into Level 3, assets 10.0    
Ending balance, assets 39.0 17.2 6.5
Changes in unrealized gains (losses) included in net income relating to positions still held, assets 6.0 1.7 3.8
Gross purchases, sales, issuances and settlements      
Purchases, assets 10.7 9.0 2.4
Sales, assets (4.9)   (36.7)
Net purchases, sales, issuances and settlements, assets 5.8 9.0 (34.3)
Separate account assets      
Changes in Level 3 fair value measurements rollforward, assets and liabilities      
Beginning balance, assets 8,615.5 7,651.4 7,354.8
Total realized/unrealized gains (losses) included in net income, assets 739.9 869.5 798.1
Total realized/unrealized gains (losses) included in other comprehensive income, assets   (0.3) (1.1)
Net purchases, sales, issuances and settlements, assets (214.2) 133.7 (464.8)
Transfers into Level 3, assets   2.3 3.1
Transfers out of Level 3, assets (173.2) (41.1) (38.7)
Ending balance, assets 8,968.0 8,615.5 7,651.4
Changes in unrealized gains (losses) included in net income relating to positions still held, assets 697.1 829.8 696.0
Gross purchases, sales, issuances and settlements      
Purchases, assets 279.1 743.0 401.4
Sales, assets (526.4) (608.4) (651.4)
Issuances, assets (280.4) (206.5) (284.6)
Settlements, assets 313.5 205.6 69.8
Net purchases, sales, issuances and settlements, assets $ (214.2) $ 133.7 $ (464.8)
v3.19.3.a.u2
Fair Value Measurements - Transfers (Details) - Recurring Fair Value Measurements - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Fixed maturities | Available-for-sale      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 2 into Level 1 $ 1.1    
Transfers out of Level 2 into Level 3 86.0 $ 59.3 $ 232.3
Transfers out of Level 3 into Level 2 78.6 385.6 434.6
Fixed maturities | Trading      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 2 into Level 3     1.9
Transfers out of Level 3 into Level 2   3.7  
U.S. government and agencies | Available-for-sale      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 2 into Level 1 1.1    
Non-U.S. governments | Available-for-sale      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 3 into Level 2   1.3 35.2
Corporate debt securities | Available-for-sale      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 2 into Level 3 4.1 1.0 22.2
Transfers out of Level 3 into Level 2   54.8 125.3
Commercial mortgage-backed securities | Available-for-sale      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 2 into Level 3 3.7 3.6 26.3
Transfers out of Level 3 into Level 2 2.3 1.5 84.5
Collateralized debt obligations | Available-for-sale      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 2 into Level 3 69.9 54.7 183.7
Transfers out of Level 3 into Level 2   237.0 101.3
Other debt obligations | Available-for-sale      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 2 into Level 3 8.3   0.1
Transfers out of Level 3 into Level 2 76.3 91.0 88.3
Other investments      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 2 into Level 3 10.0    
Equity securities | Trading      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 2 into Level 3     0.7
Separate account assets      
Fair Value Hierarchy Levels Transfers      
Transfers out of Level 1 into Level 2 102.7 293.2 12.5
Transfers out of Level 2 into Level 1   0.8 5.9
Transfers out of Level 2 into Level 3   2.3 3.1
Transfers out of Level 3 into Level 1   0.2  
Transfers out of Level 3 into Level 2 $ 173.2 $ 40.9 $ 38.7
v3.19.3.a.u2
Fair Value Measurements - Quantitative Information for Level 3 Measurements (Details) - Recurring Fair Value Measurements
$ in Millions
Dec. 31, 2019
USD ($)
item
Dec. 31, 2018
USD ($)
item
Unobservable inputs    
Assets measured at fair value | $ $ 240,519.2 $ 210,374.7
Liabilities measured at fair value | $ (530.8) (293.8)
Fair value hierarchy Level 3    
Unobservable inputs    
Assets measured at fair value | $ 9,421.5 8,790.1
Liabilities measured at fair value | $ (230.5) (60.7)
Fair value hierarchy Level 3 | Investment and universal life contracts    
Unobservable inputs    
Liabilities measured at fair value | $ $ (214.2) $ (45.2)
Embedded derivative, Valuation technique us-gaap:ValuationTechniqueDiscountedCashFlowMember us-gaap:ValuationTechniqueDiscountedCashFlowMember
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long duration interest rate | Minimum    
Unobservable inputs    
Embedded derivative, Input 0.020 0.028
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long duration interest rate | Maximum    
Unobservable inputs    
Embedded derivative, Input 0.021 0.029
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long-term equity market volatility | Minimum    
Unobservable inputs    
Embedded derivative, Input 0.150 0.167
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long-term equity market volatility | Maximum    
Unobservable inputs    
Embedded derivative, Input 0.269 0.278
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Non-performance risk | Minimum    
Unobservable inputs    
Embedded derivative, Input 0.002 0.006
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Non-performance risk | Maximum    
Unobservable inputs    
Embedded derivative, Input 0.013 0.016
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Lapse rate | Minimum    
Unobservable inputs    
Embedded derivative, Input 0.000 0.013
Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Lapse rate | Maximum    
Unobservable inputs    
Embedded derivative, Input 0.180 0.160
Fair value hierarchy Level 3 | Non-U.S. governments | Available-for-sale    
Unobservable inputs    
Assets measured at fair value | $   $ 4.6
Fixed maturities, available-for-sale, Valuation technique   us-gaap:ValuationTechniqueDiscountedCashFlowMember
Fair value hierarchy Level 3 | Non-U.S. governments | Available-for-sale | Discounted cash flow | Discount rate    
Unobservable inputs    
Fixed maturities, available-for-sale, Input   0.032
Fair value hierarchy Level 3 | Non-U.S. governments | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input   0.032
Fair value hierarchy Level 3 | Non-U.S. governments | Available-for-sale | Discounted cash flow | Illiquidity premium    
Unobservable inputs    
Fixed maturities, available-for-sale, Input   0.0050
Fair value hierarchy Level 3 | Non-U.S. governments | Available-for-sale | Discounted cash flow | Illiquidity premium | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input   0.0050
Fair value hierarchy Level 3 | Non-U.S. governments | Available-for-sale | Discounted cash flow | Comparability adjustment    
Unobservable inputs    
Fixed maturities, available-for-sale, Input   (0.0025)
Fair value hierarchy Level 3 | Non-U.S. governments | Available-for-sale | Discounted cash flow | Comparability adjustment | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input   (0.0025)
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale    
Unobservable inputs    
Assets measured at fair value | $ $ 72.5 $ 25.4
Fixed maturities, available-for-sale, Valuation technique us-gaap:ValuationTechniqueDiscountedCashFlowMember us-gaap:ValuationTechniqueDiscountedCashFlowMember
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Discount rate | Minimum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.019 0.033
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Discount rate | Maximum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.051 0.045
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.038 0.039
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Illiquidity premium | Minimum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0 0
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Illiquidity premium | Maximum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.0410 0.0060
Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Illiquidity premium | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.0152 0.0036
Fair value hierarchy Level 3 | Commercial mortgage-backed securities | Available-for-sale    
Unobservable inputs    
Assets measured at fair value | $ $ 2.4  
Fixed maturities, available-for-sale, Valuation technique gaap:ValuationTechniqueDiscountedCashFlowMember  
Fair value hierarchy Level 3 | Commercial mortgage-backed securities | Available-for-sale | Discounted cash flow | Probability of default    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 1.000  
Fair value hierarchy Level 3 | Commercial mortgage-backed securities | Available-for-sale | Discounted cash flow | Probability of default | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 1.000  
Fair value hierarchy Level 3 | Commercial mortgage-backed securities | Available-for-sale | Discounted cash flow | Potential loss severity    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.531  
Fair value hierarchy Level 3 | Commercial mortgage-backed securities | Available-for-sale | Discounted cash flow | Potential loss severity | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.531  
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale    
Unobservable inputs    
Assets measured at fair value | $ $ 108.7  
Fixed maturities, available-for-sale, Valuation technique gaap:ValuationTechniqueDiscountedCashFlowMember  
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Minimum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.029  
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Maximum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.100  
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.034  
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Probability of default    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 1.000  
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Probability of default | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 1.000  
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Potential loss severity    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.230  
Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Potential loss severity | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.230  
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale    
Unobservable inputs    
Assets measured at fair value | $ $ 1.2 $ 1.7
Fixed maturities, available-for-sale, Valuation technique us-gaap:ValuationTechniqueDiscountedCashFlowMember us-gaap:ValuationTechniqueDiscountedCashFlowMember
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Discount rate    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.050 0.050
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.050 0.050
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.0500 0.0500
Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.0500 0.0500
Fair value hierarchy Level 3 | Other investments    
Unobservable inputs    
Assets measured at fair value | $ $ 14.8  
Fixed maturities, available-for-sale, Valuation technique gaap:ValuationTechniqueDiscountedCashFlowMember  
Fair value hierarchy Level 3 | Other investments | Discounted cash flow | Discount rate | Minimum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.250  
Fair value hierarchy Level 3 | Other investments | Discounted cash flow | Discount rate | Maximum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.300  
Fair value hierarchy Level 3 | Other investments | Discounted cash flow | Discount rate | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.275  
Fair value hierarchy Level 3 | Other investments | Discounted cash flow | Terminal earnings before interest, taxes, depreciation and amortization multiple | Minimum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 3.5  
Fair value hierarchy Level 3 | Other investments | Discounted cash flow | Terminal earnings before interest, taxes, depreciation and amortization multiple | Maximum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 4.5  
Fair value hierarchy Level 3 | Other investments | Discounted cash flow | Terminal earnings before interest, taxes, depreciation and amortization multiple | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 4.0  
Fair value hierarchy Level 3 | Other investments | Market comparables | Revenue multiples | Minimum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 0.8  
Fair value hierarchy Level 3 | Other investments | Market comparables | Revenue multiples | Maximum    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 7.0  
Fair value hierarchy Level 3 | Other investments | Market comparables | Revenue multiples | Weighted average input    
Unobservable inputs    
Fixed maturities, available-for-sale, Input 4.1  
Fair value hierarchy Level 3 | Separate account assets    
Unobservable inputs    
Assets measured at fair value | $ $ 8,966.2 $ 8,440.8
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Discount rate | Minimum    
Unobservable inputs    
Separate account assets, Input   0.033
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Discount rate | Maximum    
Unobservable inputs    
Separate account assets, Input 0.028 0.047
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Discount rate | Weighted average input    
Unobservable inputs    
Separate account assets, Input 0.028 0.042
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Illiquidity premium | Minimum    
Unobservable inputs    
Separate account assets, Input   0
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Illiquidity premium | Maximum    
Unobservable inputs    
Separate account assets, Input 0.0060 0.0060
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Illiquidity premium | Weighted average input    
Unobservable inputs    
Separate account assets, Input 0.0060 0.0056
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Credit spread rate | Minimum    
Unobservable inputs    
Separate account assets, Input   0.0085
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Credit spread rate | Maximum    
Unobservable inputs    
Separate account assets, Input 0.0120 0.0172
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Credit spread rate | Weighted average input    
Unobservable inputs    
Separate account assets, Input 0.0120 0.0168
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Discount rate | Minimum    
Unobservable inputs    
Separate account assets, Input 0.055 0.056
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Discount rate | Maximum    
Unobservable inputs    
Separate account assets, Input 0.118 0.115
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Discount rate | Weighted average input    
Unobservable inputs    
Separate account assets, Input 0.067 0.067
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Terminal capitalization rate | Minimum    
Unobservable inputs    
Separate account assets, Input 0.045 0.043
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Terminal capitalization rate | Maximum    
Unobservable inputs    
Separate account assets, Input 0.093 0.093
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Terminal capitalization rate | Weighted average input    
Unobservable inputs    
Separate account assets, Input 0.057 0.058
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Average market rent growth rate | Minimum    
Unobservable inputs    
Separate account assets, Input 0.020 0.020
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Average market rent growth rate | Maximum    
Unobservable inputs    
Separate account assets, Input 0.047 0.047
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Average market rent growth rate | Weighted average input    
Unobservable inputs    
Separate account assets, Input 0.030 0.029
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Loan to value | Minimum    
Unobservable inputs    
Separate account assets, Input 0.080 0.110
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Loan to value | Maximum    
Unobservable inputs    
Separate account assets, Input 0.804 0.693
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Loan to value | Weighted average input    
Unobservable inputs    
Separate account assets, Input 0.459 0.459
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Market interest rate | Minimum    
Unobservable inputs    
Separate account assets, Input 0.032 0.039
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Market interest rate | Maximum    
Unobservable inputs    
Separate account assets, Input 0.058 0.060
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Market interest rate | Weighted average input    
Unobservable inputs    
Separate account assets, Input 0.036 0.043
v3.19.3.a.u2
Fair Value Measurements - Fair Value Option on Consolidated VIEs and Equity Method Investments (Details)
$ in Millions
12 Months Ended
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
item
Dec. 31, 2017
USD ($)
item
Commercial Mortgage Loans of Consolidated VIEs      
Fair Value Option, Quantitative Disclosures      
Fair value of assets for which fair value option was elected   $ 6.4  
Contractual principal amounts of assets for which the fair value option was elected   $ 6.5  
Number of loans which are more than 90 days past due or in nonaccrual status | item   0 0
Pre-tax gain (loss) due to change in fair value of assets and liabilities for which the fair value option was elected $ 0.1 $ (0.2) $ (0.4)
Interest income 0.3 0.7 0.9
Obligations of Consolidated VIEs      
Fair Value Option, Quantitative Disclosures      
Credit risk portion of pre-tax gain (loss) due to change in fair value of liabilities for which the fair value option was elected     (0.1)
Pre-tax gain (loss) due to change in fair value of assets and liabilities for which the fair value option was elected     (0.1)
Interest expense     0.3
Real Estate Ventures      
Fair Value Option, Quantitative Disclosures      
Fair value of assets for which fair value option was elected 22.8 17.2  
Pre-tax gain (loss) due to change in fair value of assets and liabilities for which the fair value option was elected $ 6.0 $ 1.7 3.8
Investment Funds      
Fair Value Option, Quantitative Disclosures      
Pre-tax gain (loss) due to change in fair value of assets and liabilities for which the fair value option was elected     1.7
Dividend income     $ 1.9
v3.19.3.a.u2
Fair Value Measurements - Financial Instruments Not Reported at Fair Value (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Assets (liabilities)    
Mortgage loans $ 16,486.9 $ 15,336.9
Policy loans 798.0 801.4
Short-term debt (93.4) (42.9)
Long-term debt (3,734.1) (3,259.6)
Carrying amount    
Assets (liabilities)    
Mortgage loans 16,486.9 15,336.9
Policy loans 798.0 801.4
Other investments 278.8 247.4
Cash and cash equivalents not required to be reported at fair value 1,216.9 1,201.6
Investment contracts (33,922.2) (32,572.1)
Short-term debt (93.4) (42.9)
Long-term debt (3,734.1) (3,259.6)
Separate account liabilities (151,132.4) (132,562.9)
Bank deposits (469.6) (500.0)
Cash collateral payable (156.8) (79.5)
Assets (liabilities) measured at fair value    
Assets (liabilities)    
Mortgage loans 17,214.7 15,383.6
Policy loans 1,030.8 965.5
Other investments 273.1 239.8
Cash and cash equivalents not required to be reported at fair value 1,216.9 1,201.6
Investment contracts (34,001.3) (31,428.2)
Short-term debt (93.4) (42.9)
Long-term debt (4,122.9) (3,257.1)
Separate account liabilities (149,955.6) (131,491.4)
Bank deposits (468.3) (489.1)
Cash collateral payable (156.8) (79.5)
Assets (liabilities) measured at fair value | Fair value hierarchy Level 1    
Assets (liabilities)    
Cash and cash equivalents not required to be reported at fair value 1,193.3 1,148.6
Cash collateral payable (156.8) (79.5)
Assets (liabilities) measured at fair value | Fair value hierarchy Level 2    
Assets (liabilities)    
Other investments 180.3 157.5
Cash and cash equivalents not required to be reported at fair value 23.6 53.0
Investment contracts (4,304.5) (4,085.7)
Short-term debt (93.4) (42.9)
Long-term debt (4,015.3) (3,129.3)
Bank deposits (468.3) (489.1)
Assets (liabilities) measured at fair value | Fair value hierarchy Level 3    
Assets (liabilities)    
Mortgage loans 17,214.7 15,383.6
Policy loans 1,030.8 965.5
Other investments 92.8 82.3
Investment contracts (29,696.8) (27,342.5)
Long-term debt (107.6) (127.8)
Separate account liabilities $ (149,955.6) $ (131,491.4)
v3.19.3.a.u2
Statutory Insurance Financial Information (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statutory disclosures      
Impact of prescribed practices on statutory surplus $ 862.1 $ 546.3  
Impact of permitted practices on statutory surplus (151.3) (69.9)  
Statutory reserves assumed by affiliated reinsurance subsidiaries 7,902.3 6,850.3  
Admitted assets under prescribed and permitted statutory accounting practices 3,358.0 2,852.0  
Statutory net income 989.3 1,017.6 $ 1,976.7
Statutory capital and surplus $ 5,193.4 $ 5,319.6 $ 4,946.8
v3.19.3.a.u2
Segment Information - Reconciliation of Segment Assets to Consolidated (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Segment Information: Assets    
Total assets $ 276,087.8 $ 243,036.1
Retirement and Income Solutions    
Segment Information: Assets    
Total assets 192,698.1 163,833.6
Principal Global Investors    
Segment Information: Assets    
Total assets 2,363.3 2,301.0
Principal International    
Segment Information: Assets    
Total assets 48,857.6 46,701.2
U.S. Insurance Solutions    
Segment Information: Assets    
Total assets 28,669.6 25,388.2
Corporate    
Segment Information: Assets    
Total assets $ 3,499.2 $ 4,812.1
v3.19.3.a.u2
Segment Information - Reconciliation of Segment Operating Revenues and Earnings to Consolidated (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Net realized capital gains (losses), net of related revenue adjustments                 $ (98.5) $ (132.3) $ 472.2
Total revenues $ 4,047.2 $ 4,458.4 $ 3,972.6 $ 3,743.9 $ 3,770.6 $ 4,348.1 $ 3,234.9 $ 2,883.6 16,222.1 14,237.2 14,093.2
Pre-tax net realized capital gains (losses), as adjusted                 (140.9) (126.4) 520.3
Income (loss) before income taxes                 1,693.3 1,784.4 2,252.2
Retirement and Income Solutions                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Inter-segment revenues                 357.8 393.6 402.8
Principal Global Investors                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Inter-segment revenues                 264.9 262.8 250.9
Operating Segments                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 16,393.1 14,424.8 13,703.3
Pre-tax operating earnings (losses)                 1,889.3 1,954.5 1,873.7
Operating Segments | Retirement and Income Solutions                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 8,954.4 7,277.0 7,154.7
Pre-tax operating earnings (losses)                 874.0 922.2 938.5
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Fee                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 2,003.0 1,783.7 1,776.4
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Spread                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 6,951.4 5,493.3 5,378.3
Operating Segments | Principal Global Investors                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 1,505.8 1,736.3 1,444.4
Pre-tax operating earnings (losses)                 483.3 562.1 481.3
Operating Segments | Principal International                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 1,523.2 1,372.9 1,251.5
Pre-tax operating earnings (losses)                 390.7 272.6 346.2
Operating Segments | U.S. Insurance Solutions                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 4,449.0 4,089.8 3,913.5
Pre-tax operating earnings (losses)                 521.6 467.0 412.8
Operating Segments | U.S. Insurance Solutions | Specialty Benefits insurance                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 2,493.6 2,326.4 2,168.4
Operating Segments | U.S. Insurance Solutions | Individual Life insurance                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 1,955.6 1,763.6 1,745.3
Operating Segments | U.S. Insurance Solutions | U.S. Insurance Solutions Eliminations                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 (0.2) (0.2) (0.2)
Operating Segments | Corporate                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Operating revenues                 (39.3) (51.2) (60.8)
Pre-tax operating earnings (losses)                 (380.3) (269.4) (305.1)
Reconciling Items                      
Operating Revenue And Profit (Loss) From Segments To Consolidated                      
Net realized capital gains (losses), net of related revenue adjustments                 (98.5) (132.3) 472.2
Adjustments related to equity method investments                 (72.5) (55.3) (82.3)
Pre-tax net realized capital gains (losses), as adjusted                 (140.9) (126.4) 520.3
Pre-tax other adjustments                     (70.0)
Earnings adjustments related to equity method investments and noncontrolling interest                 $ (55.1) $ (43.7) $ (71.8)
v3.19.3.a.u2
Segment Information - Net Realized Capital Gains (Losses) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Segment Information: Net realized capital gains (losses), as adjusted      
Net realized capital gains (losses) $ (52.8) $ (75.4) $ 524.2
Derivative and hedging-related revenue adjustments (80.4) (64.9) (59.4)
Market value adjustments to fee revenues   0.1 (0.1)
Adjustments related to equity method investments 2.6 (5.4) 1.4
Adjustments related to sponsored investment funds 23.6 12.9 6.3
Recognition of front-end fee revenue 8.5 0.4 (0.2)
Net realized capital gains (losses), net of related revenue adjustments (98.5) (132.3) 472.2
Amortization of deferred acquisition costs and other actuarial balances (40.8) (27.0) 55.0
Capital (gains) losses distributed (68.2) 14.4 (55.0)
Market value adjustments of embedded derivatives 66.6 18.5 48.1
Pre-tax net realized capital gains (losses), as adjusted $ (140.9) $ (126.4) $ 520.3
v3.19.3.a.u2
Segment Information - Income Tax Expense by Segment (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Segment Information: Income tax expense (benefit)      
Total segment income tax expense (benefit) from operating earnings (losses) $ 320.2 $ 357.0 $ 395.1
Tax expense (benefit) related to net realized capital gains (losses), as adjusted 1.3 (71.4) 209.1
Tax benefit related to other after-tax adjustments     (594.5)
Tax expense (benefit) associated with certain adjustments related to equity method investments and noncontrolling interest (72.3) (54.9) (82.0)
Income taxes (benefits) 249.2 230.7 (72.3)
Reconciling Items      
Segment Information: Income tax expense (benefit)      
Tax benefit associated with the U.S. tax reform     568.3
Principal Life Insurance Company and other subsidiaries combined | Legal Entities      
Segment Information: Income tax expense (benefit)      
Income taxes (benefits) 305.2 293.0 (280.9)
Retirement and Income Solutions      
Segment Information: Income tax expense (benefit)      
Total segment income tax expense (benefit) from operating earnings (losses) 71.8 85.6 123.0
Principal Global Investors      
Segment Information: Income tax expense (benefit)      
Total segment income tax expense (benefit) from operating earnings (losses) 121.8 149.1 186.0
Principal International      
Segment Information: Income tax expense (benefit)      
Total segment income tax expense (benefit) from operating earnings (losses) 106.8 73.3 87.5
U.S. Insurance Solutions      
Segment Information: Income tax expense (benefit)      
Total segment income tax expense (benefit) from operating earnings (losses) 101.8 85.7 134.0
Corporate      
Segment Information: Income tax expense (benefit)      
Total segment income tax expense (benefit) from operating earnings (losses) $ (82.0) $ (36.7) $ (135.4)
v3.19.3.a.u2
Segment Information - Depreciation and Amortization Expense by Segment (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Segment Information: Depreciation and amortization expense      
Depreciation and amortization expense $ 166.8 $ 151.0 $ 139.8
Retirement and Income Solutions      
Segment Information: Depreciation and amortization expense      
Depreciation and amortization expense 48.2 32.5 30.6
Principal Global Investors      
Segment Information: Depreciation and amortization expense      
Depreciation and amortization expense 18.9 21.9 19.8
Principal International      
Segment Information: Depreciation and amortization expense      
Depreciation and amortization expense 58.6 59.6 53.1
U.S. Insurance Solutions      
Segment Information: Depreciation and amortization expense      
Depreciation and amortization expense 25.0 26.2 28.1
Corporate      
Segment Information: Depreciation and amortization expense      
Depreciation and amortization expense $ 16.1 $ 10.8 $ 8.2
v3.19.3.a.u2
Revenues from Contracts with Customers - Disaggregation by Segment (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total fees and other revenues per consolidated statements of operations $ 4,409.9 $ 4,273.8 $ 3,892.3
Operating Segments      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 2,610.0 2,658.9 2,299.2
Operating Segments | Retirement and Income Solutions      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 464.8 262.9 268.2
Operating Segments | Principal Global Investors      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 1,456.7 1,700.5 1,406.1
Fees and other revenues not within the scope of revenue recognition guidance 38.5 30.4 28.1
Total fees and other revenues per consolidated statements of operations 1,495.2 1,730.9 1,434.2
Operating Segments | Principal International      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 462.2 477.1 426.4
Fees and other revenues not within the scope of revenue recognition guidance 6.3 7.3 7.1
Total fees and other revenues per consolidated statements of operations 468.5 484.4 433.5
Operating Segments | U.S. Insurance Solutions      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 65.9 57.0 50.1
Operating Segments | Corporate      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 160.4 161.4 148.4
Fees and other revenues not within the scope of revenue recognition guidance (301.8) (316.3) (292.8)
Total fees and other revenues per consolidated statements of operations (141.4) (154.9) (144.4)
Operating Segments | Retirement and Income Solutions - Fee | Retirement and Income Solutions      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 455.5 252.4 258.0
Fees and other revenues not within the scope of revenue recognition guidance 1,139.0 1,132.9 1,111.2
Total fees and other revenues per consolidated statements of operations 1,594.5 1,385.3 1,369.2
Operating Segments | Retirement and Income Solutions - Spread | Retirement and Income Solutions      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 9.3 10.5 10.2
Fees and other revenues not within the scope of revenue recognition guidance 13.9 12.5 15.0
Total fees and other revenues per consolidated statements of operations 23.2 23.0 25.2
Operating Segments | Specialty Benefits insurance | U.S. Insurance Solutions      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 14.9 14.8 13.9
Fees and other revenues not within the scope of revenue recognition guidance 19.6 20.6 21.3
Total fees and other revenues per consolidated statements of operations 34.5 35.4 35.2
Operating Segments | Individual Life insurance | U.S. Insurance Solutions      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers 51.2 42.4 36.4
Fees and other revenues not within the scope of revenue recognition guidance 875.9 727.0 703.5
Total fees and other revenues per consolidated statements of operations 927.1 769.4 739.9
Operating Segments | U.S. Insurance Solutions Eliminations | U.S. Insurance Solutions      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Total segment revenue from contracts with customers (0.2) (0.2) (0.2)
Reconciling Items      
Revenues from Contracts with Customers - Disaggregation of Revenues      
Fees and other revenues not within the scope of revenue recognition guidance 1,791.4 1,614.4 1,593.4
Pre-tax other adjustments $ 8.5 $ 0.5 $ (0.3)
v3.19.3.a.u2
Revenues from Contracts with Customers - Disaggregation within Segments (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total fees and other revenues   $ 4,409.9 $ 4,273.8 $ 3,892.3
Premiums and other considerations   7,866.6 6,409.6 6,217.4
Net investment income (loss)   3,998.4 3,629.2 3,459.3
Retirement and Income Solutions        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Premiums and other considerations   4,862.7 3,635.9 3,671.1
Net investment income (loss)   2,420.4 2,195.2 2,058.3
Principal Global Investors        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Net investment income (loss)   10.1 4.2 13.4
Principal International        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Premiums and other considerations   393.3 317.2 218.0
Net investment income (loss)   575.9 494.9 510.6
U.S. Insurance Solutions        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Premiums and other considerations   2,610.6 2,456.5 2,328.3
Net investment income (loss)   854.5 815.1 785.9
Corporate        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Net investment income (loss)   137.5 119.8 91.1
Operating Segments        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   2,610.0 2,658.9 2,299.2
Total operating revenues   16,393.1 14,424.8 13,703.3
Operating Segments | Retirement and Income Solutions        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   464.8 262.9 268.2
Total operating revenues   8,954.4 7,277.0 7,154.7
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Fee        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   455.5 252.4 258.0
Fees and other revenues not within the scope of revenue recognition guidance   1,139.0 1,132.9 1,111.2
Total fees and other revenues   1,594.5 1,385.3 1,369.2
Premiums and other considerations   3.5 4.0 3.8
Net investment income (loss)   405.0 394.4 403.4
Total operating revenues   2,003.0 1,783.7 1,776.4
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Fee | Administrative service fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   453.7 250.7 256.4
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Fee | Other fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   1.8 1.7 1.6
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Spread        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   9.3 10.5 10.2
Fees and other revenues not within the scope of revenue recognition guidance   13.9 12.5 15.0
Total fees and other revenues   23.2 23.0 25.2
Premiums and other considerations   4,859.2 3,631.9 3,667.3
Net investment income (loss)   2,069.0 1,838.4 1,685.8
Total operating revenues   6,951.4 5,493.3 5,378.3
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Spread | Deposit account fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   9.3 10.5 10.2
Operating Segments | Principal Global Investors        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   1,456.7 1,700.5 1,406.1
Fees and other revenues not within the scope of revenue recognition guidance   38.5 30.4 28.1
Total fees and other revenues   1,495.2 1,730.9 1,434.2
Net investment income (loss)   10.6 5.4 10.2
Total operating revenues   1,505.8 1,736.3 1,444.4
Operating Segments | Principal Global Investors | Management fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   1,239.1 1,244.5 1,217.0
Operating Segments | Principal Global Investors | Other fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   217.6 456.0 189.1
Performance fee recognized resulting from realignment of a real estate investment team $ 253.1      
Operating Segments | Principal International        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   462.2 477.1 426.4
Fees and other revenues not within the scope of revenue recognition guidance   6.3 7.3 7.1
Total fees and other revenues   468.5 484.4 433.5
Premiums and other considerations   393.3 317.2 218.0
Net investment income (loss)   661.4 571.3 600.0
Total operating revenues   1,523.2 1,372.9 1,251.5
Operating Segments | Principal International | Latin America        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   351.5 370.8 318.9
Operating Segments | Principal International | Asia        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   111.0 106.3 108.3
Operating Segments | Principal International | Principal International Corporate / Regional Office        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   0.9 0.9 0.7
Operating Segments | Principal International | Geographical Eliminations        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   (1.2) (0.9) (1.5)
Operating Segments | Principal International | Management fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   459.3 472.1 414.6
Operating Segments | Principal International | Other fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   2.9 5.0 11.8
Operating Segments | U.S. Insurance Solutions        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   65.9 57.0 50.1
Total operating revenues   4,449.0 4,089.8 3,913.5
Operating Segments | U.S. Insurance Solutions | Specialty Benefits insurance        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   14.9 14.8 13.9
Fees and other revenues not within the scope of revenue recognition guidance   19.6 20.6 21.3
Total fees and other revenues   34.5 35.4 35.2
Premiums and other considerations   2,292.7 2,134.1 1,985.9
Net investment income (loss)   166.4 156.9 147.3
Total operating revenues   2,493.6 2,326.4 2,168.4
Operating Segments | U.S. Insurance Solutions | Specialty Benefits insurance | Administrative service fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   14.9 14.8 13.9
Operating Segments | U.S. Insurance Solutions | Individual Life insurance        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   51.2 42.4 36.4
Fees and other revenues not within the scope of revenue recognition guidance   875.9 727.0 703.5
Total fees and other revenues   927.1 769.4 739.9
Premiums and other considerations   317.9 322.4 342.4
Net investment income (loss)   710.6 671.8 663.0
Total operating revenues   1,955.6 1,763.6 1,745.3
Operating Segments | U.S. Insurance Solutions | Individual Life insurance | Administrative service fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   24.3 22.8 21.5
Operating Segments | U.S. Insurance Solutions | Individual Life insurance | Commission income        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   26.9 19.6 14.9
Operating Segments | U.S. Insurance Solutions | U.S. Insurance Solutions Eliminations        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   (0.2) (0.2) (0.2)
Total operating revenues   (0.2) (0.2) (0.2)
Operating Segments | Corporate        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   160.4 161.4 148.4
Fees and other revenues not within the scope of revenue recognition guidance   (301.8) (316.3) (292.8)
Total fees and other revenues   (141.4) (154.9) (144.4)
Net investment income (loss)   102.1 103.7 83.6
Total operating revenues   (39.3) (51.2) (60.8)
Operating Segments | Corporate | Other fee revenue        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   46.1 35.4 30.1
Operating Segments | Corporate | Commission income        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   320.2 316.1 299.7
Operating Segments | Corporate | Revenue by type - Eliminations        
Revenues from Contracts with Customers - Disaggregation of Revenues        
Total revenues from contracts with customers   $ (205.9) $ (190.1) $ (181.4)
v3.19.3.a.u2
Revenues from Contracts with Customers - Contract Costs (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Contract costs    
Contract cost asset $ 157.0 $ 137.6
Practical expedient, incremental costs of obtaining a contract true  
Impairment loss for contract cost asset $ 0.0  
Amortization expense of contract cost asset $ 24.4 $ 23.8
v3.19.3.a.u2
Stock-Based Compensation Plans - Stock-Based Awards (Details) - USD ($)
shares in Millions, $ in Millions
12 Months Ended 156 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2018
May 20, 2014
Stock-Based Compensation Plans          
Stock-Based Compensation Plans - Disclosures          
Compensation cost $ 78.7 $ 77.5 $ 80.6    
Related income tax benefit 16.8 16.7 27.1    
Capitalized as part of an asset $ 1.7 $ 1.9 $ 2.5    
Amended and Restated 2010 Stock Incentive Plan and 2005 Directors Stock Plan          
Stock-Based Compensation Plans - Disclosures          
Number of shares that will be granted         0.0
Stock Incentive Plan and Directors Stock Plan          
Stock-Based Compensation Plans - Disclosures          
Options granted (in shares)       0.0  
Awards or units granted (in shares)       0.0  
2014 Stock Incentive Plan and 2014 Directors Stock Plan          
Stock-Based Compensation Plans - Disclosures          
Maximum number of new shares of common stock available for grant (in shares) 6.7        
v3.19.3.a.u2
Stock-Based Compensation Plans - Nonqualified Stock Options, Activity (Details) - Nonqualified Stock Options - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Change in options outstanding      
Options outstanding at beginning of period (in shares) 4.2    
Options granted (in shares) 1.2    
Options exercised (in shares) 0.1    
Options outstanding at end of period (in shares) 5.3 4.2  
Options vested or expected to vest at end of period (in shares) 5.3    
Options exercisable at end of period (in shares) 3.5    
Options outstanding at beginning of period, Weighted-average exercise price (in dollars per share) $ 46.77    
Options granted, Weighted-average exercise price (in dollars per share) 53.09    
Options exercised, Weighted-average exercise price (in dollars per share) 32.59    
Options outstanding at end of period, Weighted-average exercise price (in dollars per share) 48.42 $ 46.77  
Options vested or expected to vest at end of period, Weighted-average exercise price (in dollars per share) 48.41    
Options exercisable at end of period, Weighted-average exercise price (in dollars per share) $ 44.07    
Options outstanding at end of period, Intrinsic value $ 46.6    
Options vested or expected to vest at end of period, Intrinsic value 46.6    
Options exercisable at end of period, Intrinsic value 44.4    
Total intrinsic value of options exercised $ 2.4 $ 18.7 $ 53.0
2014 Stock Incentive Plan, Amended and Restated 2010 Stock Incentive Plan and Stock Incentive Plan      
Stock-Based Compensation Plans - Disclosures      
Option expiration period 10 years    
Vesting period 3 years    
Change in options outstanding      
Options granted (in shares) 1.2 0.8 0.7
v3.19.3.a.u2
Stock-Based Compensation Plans - Nonqualified Stock Options, Range of Exercise Prices (Details) - Nonqualified Stock Options - $ / shares
shares in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Summary of weighted-average remaining contractual lives for stock options outstanding and range of exercise prices    
Number of options outstanding (in shares) 5.3 4.2
Weighted-average remaining contractual life for stock options exercisable 5 years  
Range of exercise prices, Range 1    
Summary of weighted-average remaining contractual lives for stock options outstanding and range of exercise prices    
Lower limit of exercise price range (in dollars per share) $ 21.70  
Upper limit of exercise price range (in dollars per share) $ 32.32  
Number of options outstanding (in shares) 0.7  
Weighted-average remaining contractual life 2 years 6 months  
Range of exercise prices, Range 2    
Summary of weighted-average remaining contractual lives for stock options outstanding and range of exercise prices    
Lower limit of exercise price range (in dollars per share) $ 32.33  
Upper limit of exercise price range (in dollars per share) $ 42.95  
Number of options outstanding (in shares) 1.0  
Weighted-average remaining contractual life 5 years 3 months 18 days  
Range of exercise prices, Range 3    
Summary of weighted-average remaining contractual lives for stock options outstanding and range of exercise prices    
Lower limit of exercise price range (in dollars per share) $ 42.96  
Upper limit of exercise price range (in dollars per share) $ 53.58  
Number of options outstanding (in shares) 2.2  
Weighted-average remaining contractual life 7 years 1 month 6 days  
Range of exercise prices, Range 4    
Summary of weighted-average remaining contractual lives for stock options outstanding and range of exercise prices    
Lower limit of exercise price range (in dollars per share) $ 53.59  
Upper limit of exercise price range (in dollars per share) $ 64.22  
Number of options outstanding (in shares) 1.4  
Weighted-average remaining contractual life 7 years 8 months 12 days  
Range of exercise prices, Total Range    
Summary of weighted-average remaining contractual lives for stock options outstanding and range of exercise prices    
Lower limit of exercise price range (in dollars per share) $ 21.70  
Upper limit of exercise price range (in dollars per share) $ 64.22  
Number of options outstanding (in shares) 5.3  
v3.19.3.a.u2
Stock-Based Compensation Plans - Nonqualified Stock Options, Assumptions and Other Disclosures (Details) - Nonqualified Stock Options - USD ($)
$ / shares in Units, $ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Assumptions used to estimate fair value of stock options granted during period      
Weighted-average expected volatility (as a percent) 23.30% 26.00% 27.60%
Weighted-average expected term 7 years 7 years 7 years
Weighted-average risk-free interest rate (as a percent) 2.60% 2.80% 2.20%
Weighted-average expected dividend yield (as a percent) 4.07% 3.19% 2.87%
Weighted-average estimated fair value of stock options granted (in dollars per share) $ 10.00 $ 14.85 $ 15.31
Other nonqualified stock option disclosures      
Unrecognized compensation costs $ 1.7    
Weighted-average service period over which unrecognized compensation costs will be recognized 1 year 9 months 18 days    
Cash received from stock options exercised $ 3.4 $ 29.0 $ 133.9
Tax benefits realized for the tax deductions from options exercised $ 0.5 $ 3.9 $ 18.1
v3.19.3.a.u2
Stock-Based Compensation Plans - Performance Share Awards and Restricted Stock Units (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Performance Share Awards      
Stock-Based Compensation Plans - Disclosures      
Performance period for goals 3 years    
Change in nonvested units outstanding      
Awards or units outstanding at beginning of period (in shares) 0.6    
Awards or units granted (in shares) 0.2 0.2 0.2
Awards or units vested (in shares) 0.3    
Awards or units outstanding at end of period (in shares) 0.5 0.6  
Awards or units outstanding at beginning of period, Weighted-average grant-date fair value (in dollars per share) $ 52.50    
Awards or units granted, Weighted-average grant-date fair value (in dollars per share) 53.09 $ 63.98 $ 62.98
Awards or units vested, Weighted-average grant-date fair value (in dollars per share) 37.38    
Awards or units outstanding at end of period, Weighted-average grant-date fair value (in dollars per share) $ 59.26 $ 52.50  
Other award and unit disclosures      
Intrinsic value from awards or units vested $ 17.6 $ 21.5 $ 15.9
Lower limit multiple of initial target awards (as a percent) 0.00%    
Upper limit multiple of initial target awards (as a percent) 150.00%    
Unrecognized compensation costs $ 2.1    
Weighted-average service period over which unrecognized compensation costs will be recognized 1 year 8 months 12 days    
Tax benefits realized for the tax deductions from awards or units paid out $ 3.3 $ 3.3 $ 5.4
Restricted Stock Units      
Change in nonvested units outstanding      
Awards or units outstanding at beginning of period (in shares) 2.7    
Awards or units granted (in shares) 1.1 0.8 0.8
Awards or units vested (in shares) 1.2    
Awards or units outstanding at end of period (in shares) 2.6 2.7  
Awards or units outstanding at beginning of period, Weighted-average grant-date fair value (in dollars per share) $ 52.17    
Awards or units granted, Weighted-average grant-date fair value (in dollars per share) 53.17 $ 63.68 $ 62.85
Awards or units vested, Weighted-average grant-date fair value (in dollars per share) 38.07    
Awards or units outstanding at end of period, Weighted-average grant-date fair value (in dollars per share) $ 59.15 $ 52.17  
Other award and unit disclosures      
Intrinsic value from awards or units vested $ 64.0 $ 51.1 $ 59.9
Unrecognized compensation costs $ 47.0    
Weighted-average service period over which unrecognized compensation costs will be recognized 1 year 8 months 12 days    
Tax benefits realized for the tax deductions from awards or units paid out $ 13.2 $ 10.8 $ 20.8
2014 Stock Incentive Plan, Amended and Restated 2010 Stock Incentive Plan and Stock Incentive Plan | Restricted Stock Units      
Other award and unit disclosures      
Vesting period 3 years    
2014 Directors Stock Plan and 2005 Directors Stock Plan | Restricted Stock Units      
Other award and unit disclosures      
Vesting period 1 year    
v3.19.3.a.u2
Stock-Based Compensation Plans - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($)
$ / shares in Units, shares in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Stock-Based Compensation Plans - Disclosures      
Maximum value of company common stock that can be purchased by an employee per year $ 25,000    
Employee purchase price as a percent of fair market value (as a percent) 85.00%    
Share purchases under employee stock purchase plan (in shares) 0.9 0.7 0.5
Weighted-average fair value of discount on employee stock purchase plan (in dollars per share) $ 11.37 $ 9.27 $ 14.72
Intrinsic value from shares settled $ 9,700,000 $ 6,100,000 $ 7,900,000
Cash received from shares issued 36,200,000 30,100,000 27,600,000
Tax benefits realized from the settlement of share-based payment arrangements $ 900,000 $ 700,000 $ 2,000,000.0
Shares available to be issued under employee stock purchase plan (in shares) 1.4    
v3.19.3.a.u2
Earnings Per Common Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Net income (loss) $ 315.3 $ 284.6 $ 392.1 $ 452.1 $ 231.7 $ 460.0 $ 459.5 $ 402.5 $ 1,444.1 $ 1,553.7 $ 2,324.5
Subtract:                      
Net income (loss) attributable to noncontrolling interest                 49.9 7.2 14.1
Total                 $ 1,394.2 $ 1,546.5 $ 2,310.4
Weighted-average shares outstanding:                      
Basic                 278.6 285.8 288.9
Dilutive effects:                      
Diluted                 281.0 288.8 293.1
Net income (loss) per common share:                      
Basic $ 1.08 $ 0.99 $ 1.38 $ 1.54 $ 0.84 $ 1.60 $ 1.59 $ 1.37 $ 5.00 $ 5.41 $ 8.00
Diluted $ 1.07 $ 0.98 $ 1.37 $ 1.53 $ 0.83 $ 1.59 $ 1.58 $ 1.36 $ 4.96 $ 5.36 $ 7.88
Nonqualified Stock Options                      
Dilutive effects:                      
Stock-based compensation awards                 0.9 1.0 2.0
Restricted Stock Units                      
Dilutive effects:                      
Stock-based compensation awards                 1.4 1.7 2.0
Performance Share Awards                      
Dilutive effects:                      
Stock-based compensation awards                 0.1 0.3 0.2
v3.19.3.a.u2
Quarterly Results of Operations (Unaudited) (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Quarterly Results of Operations (Unaudited)                      
Total revenues $ 4,047.2 $ 4,458.4 $ 3,972.6 $ 3,743.9 $ 3,770.6 $ 4,348.1 $ 3,234.9 $ 2,883.6 $ 16,222.1 $ 14,237.2 $ 14,093.2
Total expenses 3,675.9 4,112.7 3,522.3 3,217.9 3,527.7 3,779.0 2,719.5 2,426.6 14,528.8 12,452.8 11,841.0
Net income (loss) 315.3 284.6 392.1 452.1 231.7 460.0 459.5 402.5 1,444.1 1,553.7 2,324.5
Net income attributable to PFG $ 300.9 $ 277.1 $ 386.3 $ 429.9 $ 236.5 $ 456.3 $ 456.6 $ 397.1 $ 1,394.2 $ 1,546.5 $ 2,310.4
Basic earnings per common share (in dollars per share) $ 1.08 $ 0.99 $ 1.38 $ 1.54 $ 0.84 $ 1.60 $ 1.59 $ 1.37 $ 5.00 $ 5.41 $ 8.00
Diluted earnings per common share (in dollars per share) $ 1.07 $ 0.98 $ 1.37 $ 1.53 $ 0.83 $ 1.59 $ 1.58 $ 1.36 $ 4.96 $ 5.36 $ 7.88
v3.19.3.a.u2
Condensed Consolidating Financial Information - Guarantor, Statements of Financial Position (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Assets        
Fixed maturities, available-for-sale $ 70,106.2 $ 60,108.5    
Fixed maturities, trading 675.9 636.1    
Equity securities 1,879.4 1,843.7    
Mortgage loans 16,486.9 15,336.9    
Real estate 1,714.8 1,729.7    
Policy loans 798.0 801.4    
Investment in unconsolidated entities 830.2 868.8    
Other investments 3,860.0 3,441.5    
Cash and cash equivalents 2,515.9 2,977.5    
Accrued investment income 686.6 636.2    
Premiums due and other receivables 1,740.3 1,413.1    
Deferred acquisition costs 3,521.3 3,693.5 $ 3,540.7 $ 3,380.2
Property and equipment 967.7 767.3    
Goodwill 1,693.8 1,100.0 1,068.8  
Other intangibles 1,786.7 1,315.1    
Separate account assets 165,468.0 144,987.9    
Other assets 1,356.1 1,378.9    
Total assets 276,087.8 243,036.1    
Liabilities        
Contractholder funds 41,367.5 39,699.7    
Future policy benefits and claims 40,838.2 35,664.8    
Other policyholder funds 959.4 888.4    
Short-term debt 93.4 42.9    
Long-term debt 3,734.1 3,259.6    
Income taxes currently payable 16.2 25.3    
Deferred income taxes 1,796.6 958.4    
Separate account liabilities 165,468.0 144,987.9    
Other liabilities 6,863.7 5,661.9    
Total liabilities 261,137.1 231,188.9    
Redeemable noncontrolling interest 264.9 391.2 101.3 97.5
Stockholders' equity        
Common stock 4.8 4.8    
Additional paid-in capital 10,182.6 10,060.7    
Retained earnings (accumulated deficit) 11,074.3 10,290.2    
Accumulated other comprehensive income (loss) 1,037.9 (1,565.1)    
Treasury stock, at cost (7,681.6) (7,400.6)    
Total stockholders' equity attributable to Principal Financial Group, Inc. 14,618.0 11,390.0    
Noncontrolling interest 67.8 66.0    
Total stockholders' equity 14,685.8 11,456.0 $ 12,921.9 $ 10,293.8
Total liabilities and stockholders' equity 276,087.8 243,036.1    
Principal Financial Group, Inc. parent only | Legal Entities        
Assets        
Fixed maturities, available-for-sale 265.8 211.5    
Fixed maturities, trading 268.2 308.9    
Investment in unconsolidated entities 17,539.6 13,862.4    
Other investments 10.4 10.7    
Cash and cash equivalents 394.9 334.9    
Accrued investment income 1.6 1.4    
Other assets 383.2 375.0    
Total assets 18,863.7 15,104.8    
Liabilities        
Long-term debt 3,625.5 3,129.8    
Other liabilities 620.2 585.0    
Total liabilities 4,245.7 3,714.8    
Stockholders' equity        
Common stock 4.8 4.8    
Additional paid-in capital 10,182.6 10,060.7    
Retained earnings (accumulated deficit) 11,074.3 10,290.2    
Accumulated other comprehensive income (loss) 1,037.9 (1,565.1)    
Treasury stock, at cost (7,681.6) (7,400.6)    
Total stockholders' equity attributable to Principal Financial Group, Inc. 14,618.0 11,390.0    
Total stockholders' equity 14,618.0 11,390.0    
Total liabilities and stockholders' equity 18,863.7 15,104.8    
Principal Life Insurance Company only | Legal Entities        
Assets        
Fixed maturities, available-for-sale 62,363.1 53,401.7    
Fixed maturities, trading 237.5 165.5    
Equity securities 69.9 84.8    
Mortgage loans 15,388.5 14,478.0    
Real estate 3.3 1.9    
Policy loans 742.2 755.9    
Investment in unconsolidated entities 5,036.2 2,324.4    
Other investments 3,682.5 5,549.1    
Cash and cash equivalents 1,178.1 1,323.9    
Accrued investment income 608.5 563.2    
Premiums due and other receivables 2,082.3 1,818.1    
Deferred acquisition costs 3,509.7 3,680.2    
Property and equipment 733.9 661.3    
Goodwill 54.3 54.3    
Other intangibles 17.7 19.7    
Separate account assets 125,801.7 107,343.0    
Other assets 1,118.6 1,135.1    
Total assets 222,628.0 193,360.1    
Liabilities        
Contractholder funds 38,334.6 36,861.7    
Future policy benefits and claims 35,476.6 30,690.3    
Other policyholder funds 790.3 725.7    
Deferred income taxes 325.8 405.3    
Separate account liabilities 125,801.7 107,343.0    
Other liabilities 10,533.5 8,503.2    
Total liabilities 211,262.5 184,529.2    
Stockholders' equity        
Common stock 2.5 2.5    
Additional paid-in capital 6,331.5 6,331.6    
Retained earnings (accumulated deficit) 2,410.8 2,441.2    
Accumulated other comprehensive income (loss) 2,620.7 55.6    
Total stockholders' equity attributable to Principal Financial Group, Inc. 11,365.5 8,830.9    
Total stockholders' equity 11,365.5 8,830.9    
Total liabilities and stockholders' equity 222,628.0 193,360.1    
Principal Financial Services, Inc. and other subsidiaries combined | Legal Entities        
Assets        
Fixed maturities, available-for-sale 7,833.1 6,857.9    
Fixed maturities, trading 170.2 161.7    
Equity securities 1,809.5 1,758.9    
Mortgage loans 1,793.5 1,615.5    
Real estate 1,711.5 1,727.8    
Policy loans 55.8 45.5    
Investment in unconsolidated entities 6,429.5 6,853.8    
Other investments 2,859.6 2,517.6    
Cash and cash equivalents 1,767.7 2,014.8    
Accrued investment income 81.4 77.5    
Premiums due and other receivables 4,525.8 3,781.3    
Deferred acquisition costs 11.6 13.3    
Property and equipment 233.8 106.0    
Goodwill 1,639.5 1,045.7    
Other intangibles 1,769.0 1,295.4    
Separate account assets 39,666.3 37,644.9    
Other assets 5,358.4 4,418.3    
Total assets 77,716.2 71,935.9    
Liabilities        
Contractholder funds 3,388.0 3,189.2    
Future policy benefits and claims 6,740.7 6,128.6    
Other policyholder funds 171.9 165.3    
Short-term debt 93.4 42.9    
Long-term debt 763.1 851.2    
Income taxes currently payable 81.7 80.7    
Deferred income taxes 1,965.9 1,056.4    
Separate account liabilities 39,666.3 37,644.9    
Other liabilities 7,111.2 8,586.5    
Total liabilities 59,982.2 57,745.7    
Redeemable noncontrolling interest 264.9 391.2    
Stockholders' equity        
Additional paid-in capital 10,038.7 9,461.2    
Retained earnings (accumulated deficit) 6,414.3 5,855.0    
Accumulated other comprehensive income (loss) 948.3 (1,583.2)    
Total stockholders' equity attributable to Principal Financial Group, Inc. 17,401.3 13,733.0    
Noncontrolling interest 67.8 66.0    
Total stockholders' equity 17,469.1 13,799.0    
Total liabilities and stockholders' equity 77,716.2 71,935.9    
Principal Financial Services, Inc. and other subsidiaries combined | Legal Entities | Nonqualified benefit plans        
Stockholders' equity        
Assets held in Rabbi trusts 731.9 671.7    
Liabilities held in Rabbi trusts 593.7 542.4    
Eliminations, Notes Guarantor | Eliminations        
Assets        
Fixed maturities, available-for-sale (355.8) (362.6)    
Mortgage loans (695.1) (756.6)    
Investment in unconsolidated entities (28,175.1) (22,171.8)    
Other investments (2,692.5) (4,635.9)    
Cash and cash equivalents (824.8) (696.1)    
Accrued investment income (4.9) (5.9)    
Premiums due and other receivables (4,867.8) (4,186.3)    
Other assets (5,504.1) (4,549.5)    
Total assets (43,120.1) (37,364.7)    
Liabilities        
Contractholder funds (355.1) (351.2)    
Future policy benefits and claims (1,379.1) (1,154.1)    
Other policyholder funds (2.8) (2.6)    
Long-term debt (654.5) (721.4)    
Income taxes currently payable (65.5) (55.4)    
Deferred income taxes (495.1) (503.3)    
Other liabilities (11,401.2) (12,012.8)    
Total liabilities (14,353.3) (14,800.8)    
Stockholders' equity        
Common stock (2.5) (2.5)    
Additional paid-in capital (16,370.2) (15,792.8)    
Retained earnings (accumulated deficit) (8,825.1) (8,296.2)    
Accumulated other comprehensive income (loss) (3,569.0) 1,527.6    
Total stockholders' equity attributable to Principal Financial Group, Inc. (28,766.8) (22,563.9)    
Total stockholders' equity (28,766.8) (22,563.9)    
Total liabilities and stockholders' equity $ (43,120.1) $ (37,364.7)    
v3.19.3.a.u2
Condensed Consolidating Financial Information - Guarantor, Statements of Operations (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenues                      
Premiums and other considerations                 $ 7,866.6 $ 6,409.6 $ 6,217.4
Fees and other revenues                 4,409.9 4,273.8 3,892.3
Net investment income (loss)                 3,998.4 3,629.2 3,459.3
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 (9.3) (46.3) 606.0
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities                 (38.3) 10.6 (28.7)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income                 (5.2) (39.7) (53.1)
Net impairment (losses) recoveries on available-for-sale securities                 (43.5) (29.1)  
Net impairment (losses) recoveries on available-for-sale securities                     (81.8)
Net realized capital gains (losses)                 (52.8) (75.4) 524.2
Total revenues $ 4,047.2 $ 4,458.4 $ 3,972.6 $ 3,743.9 $ 3,770.6 $ 4,348.1 $ 3,234.9 $ 2,883.6 16,222.1 14,237.2 14,093.2
Expenses                      
Benefits, claims and settlement expenses                 9,905.8 8,192.5 7,822.6
Dividends to policyholders                 119.1 123.6 124.6
Operating expenses                 4,503.9 4,136.7 3,893.8
Total expenses 3,675.9 4,112.7 3,522.3 3,217.9 3,527.7 3,779.0 2,719.5 2,426.6 14,528.8 12,452.8 11,841.0
Income (loss) before income taxes                 1,693.3 1,784.4 2,252.2
Income taxes (benefits)                 249.2 230.7 (72.3)
Net income (loss) 315.3 284.6 392.1 452.1 231.7 460.0 459.5 402.5 1,444.1 1,553.7 2,324.5
Net income (loss) attributable to noncontrolling interest                 49.9 7.2 14.1
Net income (loss) attributable to Principal Financial Group, Inc. 300.9 277.1 386.3 429.9 236.5 456.3 456.6 397.1 1,394.2 1,546.5 2,310.4
Net income (loss) $ 315.3 $ 284.6 $ 392.1 $ 452.1 $ 231.7 $ 460.0 $ 459.5 $ 402.5 1,444.1 1,553.7 2,324.5
Other comprehensive income (loss)                 2,606.7 (1,835.7) 844.3
Comprehensive income (loss)                 4,050.8 (282.0) 3,168.8
Principal Life Insurance Company only | Legal Entities                      
Revenues                      
Premiums and other considerations                 7,189.2 5,846.0 5,777.7
Fees and other revenues                 2,343.9 2,174.4 2,140.9
Net investment income (loss)                 2,843.7 2,655.7 2,533.1
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 (3,509.5) 118.8 (84.5)
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities                 (35.6) 14.1 (28.2)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income                 (4.7) (40.1) (46.4)
Net impairment (losses) recoveries on available-for-sale securities                 (40.3) (26.0)  
Net impairment (losses) recoveries on available-for-sale securities                     (74.6)
Net realized capital gains (losses)                 (3,549.8) 92.8 (159.1)
Total revenues                 8,827.0 10,768.9 10,292.6
Expenses                      
Benefits, claims and settlement expenses                 8,940.7 7,346.3 7,153.5
Dividends to policyholders                 119.1 123.6 124.6
Operating expenses                 2,460.0 2,320.1 2,185.4
Total expenses                 11,519.8 9,790.0 9,463.5
Income (loss) before income taxes                 (2,692.8) 978.9 829.1
Income taxes (benefits)                 (685.5) 60.0 (540.1)
Equity in the net income (loss) of subsidiaries                 3,121.0 334.7 901.5
Net income (loss)                 1,113.7 1,253.6 2,270.7
Net income (loss) attributable to Principal Financial Group, Inc.                 1,113.7 1,253.6 2,270.7
Net income (loss)                 1,113.7 1,253.6 2,270.7
Other comprehensive income (loss)                 2,564.6 (1,548.5) 611.6
Comprehensive income (loss)                 3,678.3 (294.9) 2,882.3
Income (loss) from discontinued operations, net of related income taxes                     35.5
Eliminations, Notes Guarantor | Eliminations                      
Revenues                      
Fees and other revenues                 (395.9) (387.6) (419.8)
Net investment income (loss)                 (1,088.6) (1,244.9) (2,264.4)
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 (0.6) 18.2 (0.7)
Net impairment (losses) recoveries on available-for-sale securities                   0.0  
Net realized capital gains (losses)                 (0.6) 18.2 (0.7)
Total revenues                 (1,485.1) (1,614.3) (2,684.9)
Expenses                      
Benefits, claims and settlement expenses                 (11.3) (10.9) (10.8)
Operating expenses                 (373.2) (358.0) (352.9)
Total expenses                 (384.5) (368.9) (363.7)
Income (loss) before income taxes                 (1,100.6) (1,245.4) (2,321.2)
Income taxes (benefits)                 (1.3) (1.8) 28.3
Equity in the net income (loss) of subsidiaries                 (1,534.6) (1,657.7) (2,490.9)
Net income (loss)                 (2,633.9) (2,901.3) (4,840.4)
Net income (loss) attributable to Principal Financial Group, Inc.                 (2,633.9) (2,901.3) (4,840.4)
Net income (loss)                 (2,633.9) (2,901.3) (4,840.4)
Other comprehensive income (loss)                 (5,182.8) 3,465.8 (1,485.2)
Comprehensive income (loss)                 (7,816.7) 564.5 (6,325.6)
Principal Financial Services, Inc. and other subsidiaries combined | Legal Entities                      
Revenues                      
Premiums and other considerations                 677.4 563.6 439.7
Fees and other revenues                 2,461.9 2,487.0 2,163.4
Net investment income (loss)                 2,223.9 2,192.6 3,180.9
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 3,488.5 (175.1) 691.8
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities                 (2.7) (3.5) (0.5)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income                 (0.5) 0.4 (6.7)
Net impairment (losses) recoveries on available-for-sale securities                 (3.2) (3.1)  
Net impairment (losses) recoveries on available-for-sale securities                     (7.2)
Net realized capital gains (losses)                 3,485.3 (178.2) 684.6
Total revenues                 8,848.5 5,065.0 6,468.6
Expenses                      
Benefits, claims and settlement expenses                 976.4 857.1 679.9
Operating expenses                 2,206.2 1,982.7 1,823.2
Total expenses                 3,182.6 2,839.8 2,503.1
Income (loss) before income taxes                 5,665.9 2,225.2 3,965.5
Income taxes (benefits)                 980.2 235.0 376.4
Equity in the net income (loss) of subsidiaries                 (3,115.6) (335.3) (1,005.3)
Net income (loss)                 1,570.1 1,654.9 2,583.8
Net income (loss) attributable to noncontrolling interest                 49.9 7.2 14.1
Net income (loss) attributable to Principal Financial Group, Inc.                 1,520.2 1,647.7 2,569.7
Net income (loss)                 1,570.1 1,654.9 2,583.8
Other comprehensive income (loss)                 2,654.0 (1,928.5) 877.6
Comprehensive income (loss)                 4,224.1 (273.6) 3,461.4
Principal Financial Group, Inc. parent only | Legal Entities                      
Revenues                      
Fees and other revenues                     7.8
Net investment income (loss)                 19.4 25.8 9.7
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 12.3 (8.2) (0.6)
Net impairment (losses) recoveries on available-for-sale securities                   0.0  
Net realized capital gains (losses)                 12.3 (8.2) (0.6)
Total revenues                 31.7 17.6 16.9
Expenses                      
Operating expenses                 210.9 191.9 238.1
Total expenses                 210.9 191.9 238.1
Income (loss) before income taxes                 (179.2) (174.3) (221.2)
Income taxes (benefits)                 (44.2) (62.5) 63.1
Equity in the net income (loss) of subsidiaries                 1,529.2 1,658.3 2,594.7
Net income (loss)                 1,394.2 1,546.5 2,310.4
Net income (loss) attributable to Principal Financial Group, Inc.                 1,394.2 1,546.5 2,310.4
Net income (loss)                 1,394.2 1,546.5 2,310.4
Other comprehensive income (loss)                 2,570.9 (1,824.5) 840.3
Comprehensive income (loss)                 $ 3,965.1 $ (278.0) $ 3,150.7
v3.19.3.a.u2
Condensed Consolidating Financial Information - Guarantor, Statements of Cash Flows (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating activities      
Net cash provided by (used in) operating activities $ 5,493.2 $ 5,156.5 $ 4,188.0
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases (14,137.1) (13,909.8) (13,371.6)
Fixed maturities available-for-sale and equity securities with intent to hold: Sales 2,397.4 3,813.1 1,413.6
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities 7,064.2 6,217.6 8,743.2
Mortgage loans acquired or originated (3,487.7) (3,447.5) (2,755.8)
Mortgage loans sold or repaid 2,335.9 2,228.4 1,872.0
Real estate acquired (127.5) (88.1) (200.5)
Real estate sold 96.3 63.5 481.9
Net (purchases) sales of property and equipment (132.4) (92.3) (164.8)
Purchase of business or interests in subsidiaries, net of cash acquired (1,208.5) (184.7)  
Net change in other investments (489.1) (302.7) (70.8)
Net cash provided by (used in) investing activities (7,688.5) (5,702.5) (4,052.8)
Financing activities      
Issuance of common stock 37.7 64.0 162.5
Acquisition of treasury stock (281.0) (671.6) (220.4)
Proceeds from financing element derivatives     0.1
Payments for financing element derivatives (26.9) (65.9) (77.6)
Purchase of subsidiary shares from noncontrolling interest (1.7) (31.1) (13.3)
Dividends to common stockholders (606.0) (598.6) (540.0)
Issuance of long-term debt 504.9 80.8 2.8
Principal repayments of long-term debt (32.2) (1.3) (56.5)
Net proceeds from (repayments of) short-term borrowings 57.5 8.5 (15.5)
Investment contract deposits 9,200.0 8,308.8 10,154.4
Investment contract withdrawals (7,747.7) (6,589.6) (9,914.6)
Net increase (decrease) in banking operation deposits 623.4 553.0 136.6
Other 5.7 (4.3) (2.5)
Net cash provided by (used in) financing activities 1,733.7 1,052.7 (384.0)
Net increase (decrease) in cash and cash equivalents (461.6) 506.7 (248.8)
Cash and cash equivalents at beginning of period 2,977.5 2,470.8 2,719.6
Cash and cash equivalents at end of period 2,515.9 2,977.5 2,470.8
Principal Financial Group, Inc. parent only | Legal Entities      
Operating activities      
Net cash provided by (used in) operating activities 7.1 (132.4) (443.2)
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases (251.5) (210.9)  
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities 200.0 2.3  
Net (purchases) sales of property and equipment (0.1) (0.1) (0.1)
Dividends and returns of capital received from (contributed to) unconsolidated entities 494.2 1,041.6 1,002.5
Net change in other investments (34.0) (2.2) (1.1)
Net cash provided by (used in) investing activities 408.6 830.7 1,001.3
Financing activities      
Issuance of common stock 37.7 64.0 162.5
Acquisition of treasury stock (281.0) (671.6) (220.4)
Dividends to common stockholders (606.0) (598.6) (540.0)
Issuance of long-term debt 493.6    
Net cash provided by (used in) financing activities (355.7) (1,206.2) (597.9)
Net increase (decrease) in cash and cash equivalents 60.0 (507.9) (39.8)
Cash and cash equivalents at beginning of period 334.9 842.8 882.6
Cash and cash equivalents at end of period 394.9 334.9 842.8
Principal Life Insurance Company only | Legal Entities      
Operating activities      
Net cash provided by (used in) operating activities 2,292.0 5,410.9 5,571.5
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases (11,482.9) (11,457.5) (12,054.5)
Fixed maturities available-for-sale and equity securities with intent to hold: Sales 1,411.0 2,557.9 1,005.3
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities 6,123.0 5,660.9 7,894.7
Mortgage loans acquired or originated (2,943.6) (3,060.0) (2,629.8)
Mortgage loans sold or repaid 2,030.8 1,967.4 1,696.2
Real estate acquired (0.3)    
Net (purchases) sales of property and equipment (52.9) (50.5) (108.1)
Dividends and returns of capital received from (contributed to) unconsolidated entities 2.2 50.1 149.7
Net change in other investments 2,646.8 (626.1) 281.9
Net cash provided by (used in) investing activities (2,265.9) (4,957.8) (3,764.6)
Financing activities      
Proceeds from financing element derivatives     0.1
Payments for financing element derivatives (26.9) (65.9) (77.6)
Capital received from (dividends and capital paid to) parent (1,169.2) (861.6) (1,845.9)
Investment contract deposits 8,727.6 7,896.0 9,760.5
Investment contract withdrawals (7,709.4) (6,520.1) (9,889.9)
Other 6.0 (4.3) (2.5)
Net cash provided by (used in) financing activities (171.9) 444.1 (2,055.3)
Net increase (decrease) in cash and cash equivalents (145.8) 897.2 (248.4)
Cash and cash equivalents at beginning of period 1,323.9 426.7 675.1
Cash and cash equivalents at end of period 1,178.1 1,323.9 426.7
Principal Financial Services, Inc. and other subsidiaries combined | Legal Entities      
Operating activities      
Net cash provided by (used in) operating activities 650.5 473.1 (2,114.7)
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases (2,402.7) (2,249.2) (1,317.1)
Fixed maturities available-for-sale and equity securities with intent to hold: Sales 988.9 1,255.2 425.1
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities 741.2 554.4 848.5
Mortgage loans acquired or originated (555.9) (497.0) (448.1)
Mortgage loans sold or repaid 372.0 297.8 388.4
Real estate acquired (127.2) (88.1) (200.5)
Real estate sold 96.3 63.5 481.9
Net (purchases) sales of property and equipment (79.4) (41.7) (56.6)
Purchase of business or interests in subsidiaries, net of cash acquired (1,208.5) (184.7)  
Dividends and returns of capital received from (contributed to) unconsolidated entities 1,169.2 861.6 1,845.9
Net change in other investments (420.3) 120.7 155.4
Net cash provided by (used in) investing activities (1,426.4) 92.5 2,122.9
Financing activities      
Purchase of subsidiary shares from noncontrolling interest (1.7) (31.1) (16.2)
Sale of subsidiary shares to noncontrolling interest     2.9
Issuance of long-term debt 11.3 178.9 380.5
Principal repayments of long-term debt (99.1) (38.1) (269.9)
Net proceeds from (repayments of) short-term borrowings 57.5 8.5 (15.5)
Capital received from (dividends and capital paid to) parent (496.4) (1,091.7) (1,152.2)
Investment contract deposits 472.4 412.8 393.9
Investment contract withdrawals (38.3) (69.5) (24.7)
Net increase (decrease) in banking operation deposits 623.4 553.0 136.6
Other (0.3)    
Net cash provided by (used in) financing activities 528.8 (77.2) (564.6)
Net increase (decrease) in cash and cash equivalents (247.1) 488.4 (556.4)
Cash and cash equivalents at beginning of period 2,014.8 1,526.4 2,082.8
Cash and cash equivalents at end of period 1,767.7 2,014.8 1,526.4
Eliminations, Notes Guarantor | Eliminations      
Operating activities      
Net cash provided by (used in) operating activities 2,543.6 (595.1) 1,174.4
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases   7.8  
Fixed maturities available-for-sale and equity securities with intent to hold: Sales (2.5)   (16.8)
Mortgage loans acquired or originated 11.8 109.5 322.1
Mortgage loans sold or repaid (66.9) (36.8) (212.6)
Dividends and returns of capital received from (contributed to) unconsolidated entities (1,665.6) (1,953.3) (2,998.1)
Net change in other investments (2,681.6) 204.9 (507.0)
Net cash provided by (used in) investing activities (4,404.8) (1,667.9) (3,412.4)
Financing activities      
Purchase of subsidiary shares from noncontrolling interest     2.9
Sale of subsidiary shares to noncontrolling interest     (2.9)
Issuance of long-term debt   (98.1) (377.7)
Principal repayments of long-term debt 66.9 36.8 213.4
Capital received from (dividends and capital paid to) parent 1,665.6 1,953.3 2,998.1
Net cash provided by (used in) financing activities 1,732.5 1,892.0 2,833.8
Net increase (decrease) in cash and cash equivalents (128.7) (371.0) 595.8
Cash and cash equivalents at beginning of period (696.1) (325.1) (920.9)
Cash and cash equivalents at end of period $ (824.8) $ (696.1) $ (325.1)
v3.19.3.a.u2
Condensed Consolidating Financial Information - Shelf Registration Guarantor, Statements of Financial Position (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Assets        
Fixed maturities, available-for-sale $ 70,106.2 $ 60,108.5    
Fixed maturities, trading 675.9 636.1    
Equity securities 1,879.4 1,843.7    
Mortgage loans 16,486.9 15,336.9    
Real estate 1,714.8 1,729.7    
Policy loans 798.0 801.4    
Investment in unconsolidated entities 830.2 868.8    
Other investments 3,860.0 3,441.5    
Cash and cash equivalents 2,515.9 2,977.5    
Accrued investment income 686.6 636.2    
Premiums due and other receivables 1,740.3 1,413.1    
Deferred acquisition costs 3,521.3 3,693.5 $ 3,540.7 $ 3,380.2
Property and equipment 967.7 767.3    
Goodwill 1,693.8 1,100.0 1,068.8  
Other intangibles 1,786.7 1,315.1    
Separate account assets 165,468.0 144,987.9    
Other assets 1,356.1 1,378.9    
Total assets 276,087.8 243,036.1    
Liabilities        
Contractholder funds 41,367.5 39,699.7    
Future policy benefits and claims 40,838.2 35,664.8    
Other policyholder funds 959.4 888.4    
Short-term debt 93.4 42.9    
Long-term debt 3,734.1 3,259.6    
Income taxes currently payable 16.2 25.3    
Deferred income taxes 1,796.6 958.4    
Separate account liabilities 165,468.0 144,987.9    
Other liabilities 6,863.7 5,661.9    
Total liabilities 261,137.1 231,188.9    
Redeemable noncontrolling interest 264.9 391.2 101.3 97.5
Stockholders' equity        
Common stock 4.8 4.8    
Additional paid-in capital 10,182.6 10,060.7    
Retained earnings (accumulated deficit) 11,074.3 10,290.2    
Accumulated other comprehensive income (loss) 1,037.9 (1,565.1)    
Treasury stock, at cost (7,681.6) (7,400.6)    
Total stockholders' equity attributable to Principal Financial Group, Inc. 14,618.0 11,390.0    
Noncontrolling interest 67.8 66.0    
Total stockholders' equity 14,685.8 11,456.0 $ 12,921.9 $ 10,293.8
Total liabilities and stockholders' equity 276,087.8 243,036.1    
Principal Financial Group, Inc. parent only | Legal Entities        
Assets        
Fixed maturities, available-for-sale 265.8 211.5    
Fixed maturities, trading 268.2 308.9    
Investment in unconsolidated entities 17,539.6 13,862.4    
Other investments 10.4 10.7    
Cash and cash equivalents 394.9 334.9    
Accrued investment income 1.6 1.4    
Other assets 383.2 375.0    
Total assets 18,863.7 15,104.8    
Liabilities        
Long-term debt 3,625.5 3,129.8    
Other liabilities 620.2 585.0    
Total liabilities 4,245.7 3,714.8    
Stockholders' equity        
Common stock 4.8 4.8    
Additional paid-in capital 10,182.6 10,060.7    
Retained earnings (accumulated deficit) 11,074.3 10,290.2    
Accumulated other comprehensive income (loss) 1,037.9 (1,565.1)    
Treasury stock, at cost (7,681.6) (7,400.6)    
Total stockholders' equity attributable to Principal Financial Group, Inc. 14,618.0 11,390.0    
Total stockholders' equity 14,618.0 11,390.0    
Total liabilities and stockholders' equity 18,863.7 15,104.8    
Principal Financial Services, Inc. only | Legal Entities        
Assets        
Equity securities 41.4 11.9    
Investment in unconsolidated entities 16,664.1 14,325.5    
Other investments 251.9 100.9    
Cash and cash equivalents 598.4 649.0    
Accrued investment income 0.4 0.3    
Premiums due and other receivables 100.0 0.5    
Goodwill 618.5      
Other intangibles 531.7      
Other assets 35.2 38.7    
Total assets 18,841.6 15,126.8    
Liabilities        
Long-term debt 320.7 366.7    
Income taxes currently payable   9.8    
Deferred income taxes 5.9 13.9    
Other liabilities 1,113.6 1,002.9    
Total liabilities 1,440.2 1,393.3    
Stockholders' equity        
Additional paid-in capital 9,658.3 9,100.0    
Retained earnings (accumulated deficit) 6,263.5 5,716.8    
Accumulated other comprehensive income (loss) 1,479.6 (1,083.3)    
Total stockholders' equity attributable to Principal Financial Group, Inc. 17,401.4 13,733.5    
Total stockholders' equity 17,401.4 13,733.5    
Total liabilities and stockholders' equity 18,841.6 15,126.8    
Principal Life Insurance Company and other subsidiaries combined | Legal Entities        
Assets        
Fixed maturities, available-for-sale 69,840.4 59,897.0    
Fixed maturities, trading 407.7 327.2    
Equity securities 1,838.0 1,831.8    
Mortgage loans 16,486.9 15,336.9    
Real estate 1,714.8 1,729.7    
Policy loans 798.0 801.4    
Investment in unconsolidated entities 649.4 726.0    
Other investments 3,597.7 3,329.9    
Cash and cash equivalents 2,656.2 3,096.8    
Accrued investment income 684.6 634.5    
Premiums due and other receivables 1,961.1 1,779.6    
Deferred acquisition costs 3,521.3 3,693.5    
Property and equipment 967.7 767.3    
Goodwill 1,075.3 1,100.0    
Other intangibles 1,255.0 1,315.1    
Separate account assets 165,468.0 144,987.9    
Other assets 1,509.5 1,521.9    
Total assets 274,431.6 242,876.5    
Liabilities        
Contractholder funds 41,367.5 39,699.7    
Future policy benefits and claims 40,838.2 35,664.8    
Other policyholder funds 959.4 888.4    
Short-term debt 93.4 42.9    
Long-term debt 108.7 129.9    
Income taxes currently payable 66.4 61.5    
Deferred income taxes 2,285.8 1,446.4    
Separate account liabilities 165,468.0 144,987.9    
Other liabilities 6,104.7 4,838.1    
Total liabilities 257,292.1 227,759.6    
Redeemable noncontrolling interest 264.9 391.2    
Stockholders' equity        
Common stock 11.0 11.0    
Additional paid-in capital 12,157.9 12,004.5    
Retained earnings (accumulated deficit) 2,985.1 3,549.8    
Accumulated other comprehensive income (loss) 1,654.8 (903.6)    
Treasury stock, at cost (2.0) (2.0)    
Total stockholders' equity attributable to Principal Financial Group, Inc. 16,806.8 14,659.7    
Noncontrolling interest 67.8 66.0    
Total stockholders' equity 16,874.6 14,725.7    
Total liabilities and stockholders' equity 274,431.6 242,876.5    
Principal Life Insurance Company and other subsidiaries combined | Legal Entities | Nonqualified benefit plans        
Stockholders' equity        
Assets held in Rabbi trusts 731.9 671.7    
Liabilities held in Rabbi trusts 593.7 542.4    
Eliminations, Shelf Registration Debt Guarantor | Eliminations        
Assets        
Investment in unconsolidated entities (34,022.9) (28,045.1)    
Cash and cash equivalents (1,133.6) (1,103.2)    
Premiums due and other receivables (320.8) (367.0)    
Other assets (571.8) (556.7)    
Total assets (36,049.1) (30,072.0)    
Liabilities        
Long-term debt (320.8) (366.8)    
Income taxes currently payable (50.2) (46.0)    
Deferred income taxes (495.1) (501.9)    
Other liabilities (974.8) (764.1)    
Total liabilities (1,840.9) (1,678.8)    
Stockholders' equity        
Common stock (11.0) (11.0)    
Additional paid-in capital (21,816.2) (21,104.5)    
Retained earnings (accumulated deficit) (9,248.6) (9,266.6)    
Accumulated other comprehensive income (loss) (3,134.4) 1,986.9    
Treasury stock, at cost 2.0 2.0    
Total stockholders' equity attributable to Principal Financial Group, Inc. (34,208.2) (28,393.2)    
Total stockholders' equity (34,208.2) (28,393.2)    
Total liabilities and stockholders' equity $ (36,049.1) $ (30,072.0)    
v3.19.3.a.u2
Condensed Consolidating Financial Information - Shelf Registration Guarantor, Statements of Operations (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenues                      
Premiums and other considerations                 $ 7,866.6 $ 6,409.6 $ 6,217.4
Fees and other revenues                 4,409.9 4,273.8 3,892.3
Net investment income (loss)                 3,998.4 3,629.2 3,459.3
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 (9.3) (46.3) 606.0
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities                 (38.3) 10.6 (28.7)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income                 (5.2) (39.7) (53.1)
Net impairment (losses) recoveries on available-for-sale securities                 (43.5) (29.1)  
Net impairment (losses) recoveries on available-for-sale securities                     (81.8)
Net realized capital gains (losses)                 (52.8) (75.4) 524.2
Total revenues $ 4,047.2 $ 4,458.4 $ 3,972.6 $ 3,743.9 $ 3,770.6 $ 4,348.1 $ 3,234.9 $ 2,883.6 16,222.1 14,237.2 14,093.2
Expenses                      
Benefits, claims and settlement expenses                 9,905.8 8,192.5 7,822.6
Dividends to policyholders                 119.1 123.6 124.6
Operating expenses                 4,503.9 4,136.7 3,893.8
Total expenses 3,675.9 4,112.7 3,522.3 3,217.9 3,527.7 3,779.0 2,719.5 2,426.6 14,528.8 12,452.8 11,841.0
Income (loss) before income taxes                 1,693.3 1,784.4 2,252.2
Income taxes (benefits)                 249.2 230.7 (72.3)
Net income (loss) 315.3 284.6 392.1 452.1 231.7 460.0 459.5 402.5 1,444.1 1,553.7 2,324.5
Net income (loss) attributable to noncontrolling interest                 49.9 7.2 14.1
Net income (loss) attributable to Principal Financial Group, Inc. 300.9 277.1 386.3 429.9 236.5 456.3 456.6 397.1 1,394.2 1,546.5 2,310.4
Net income (loss) $ 315.3 $ 284.6 $ 392.1 $ 452.1 $ 231.7 $ 460.0 $ 459.5 $ 402.5 1,444.1 1,553.7 2,324.5
Other comprehensive income (loss)                 2,606.7 (1,835.7) 844.3
Comprehensive income (loss)                 4,050.8 (282.0) 3,168.8
Principal Financial Group, Inc. parent only | Legal Entities                      
Revenues                      
Fees and other revenues                     7.8
Net investment income (loss)                 19.4 25.8 9.7
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 12.3 (8.2) (0.6)
Net impairment (losses) recoveries on available-for-sale securities                     0.0
Net realized capital gains (losses)                 12.3 (8.2) (0.6)
Total revenues                 31.7 17.6 16.9
Expenses                      
Operating expenses                 210.9 191.9 238.1
Total expenses                 210.9 191.9 238.1
Income (loss) before income taxes                 (179.2) (174.3) (221.2)
Income taxes (benefits)                 (44.2) (62.5) 63.1
Equity in the net income (loss) of subsidiaries                 1,529.2 1,658.3 2,594.7
Net income (loss)                 1,394.2 1,546.5 2,310.4
Net income (loss) attributable to Principal Financial Group, Inc.                 1,394.2 1,546.5 2,310.4
Net income (loss)                 1,394.2 1,546.5 2,310.4
Other comprehensive income (loss)                 2,570.9 (1,824.5) 840.3
Comprehensive income (loss)                 3,965.1 (278.0) 3,150.7
Principal Financial Services, Inc. only | Legal Entities                      
Revenues                      
Fees and other revenues                 205.9 2.7 0.2
Net investment income (loss)                 (6.5) (6.7) (2.8)
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 17.5 (3.5) 4.2
Net impairment (losses) recoveries on available-for-sale securities                     0.0
Net realized capital gains (losses)                 17.5 (3.5) 4.2
Total revenues                 216.9 (7.5) 1.6
Expenses                      
Operating expenses                 368.2 29.1 48.4
Total expenses                 368.2 29.1 48.4
Income (loss) before income taxes                 (151.3) (36.6) (46.8)
Income taxes (benefits)                 (11.8) 0.2 115.4
Equity in the net income (loss) of subsidiaries                 1,659.7 1,684.5 2,731.9
Net income (loss)                 1,520.2 1,647.7 2,569.7
Net income (loss) attributable to Principal Financial Group, Inc.                 1,520.2 1,647.7 2,569.7
Net income (loss)                 1,520.2 1,647.7 2,569.7
Other comprehensive income (loss)                 2,530.9 (1,839.1) 809.8
Comprehensive income (loss)                 4,051.1 (191.4) 3,379.5
Principal Life Insurance Company and other subsidiaries combined | Legal Entities                      
Revenues                      
Premiums and other considerations                 7,866.6 6,409.6 6,217.4
Fees and other revenues                 4,215.5 4,286.4 3,894.7
Net investment income (loss)                 3,975.1 3,598.0 3,396.5
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 (38.9) (34.6) 602.4
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities                 (38.3) 10.6 (28.7)
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income                 (5.2) (39.7) (53.1)
Net impairment (losses) recoveries on available-for-sale securities                 (43.5) (29.1)  
Net impairment (losses) recoveries on available-for-sale securities                     (81.8)
Net realized capital gains (losses)                 (82.4) (63.7) 520.6
Total revenues                 15,974.8 14,230.3 14,029.2
Expenses                      
Benefits, claims and settlement expenses                 9,905.8 8,192.5 7,822.6
Dividends to policyholders                 119.1 123.6 124.6
Operating expenses                 3,935.1 3,929.5 3,616.9
Total expenses                 13,960.0 12,245.6 11,564.1
Income (loss) before income taxes                 2,014.8 1,984.7 2,465.1
Income taxes (benefits)                 305.2 293.0 (280.9)
Net income (loss)                 1,709.6 1,691.7 2,746.0
Net income (loss) attributable to noncontrolling interest                 49.9 7.2 14.1
Net income (loss) attributable to Principal Financial Group, Inc.                 1,659.7 1,684.5 2,731.9
Net income (loss)                 1,709.6 1,691.7 2,746.0
Other comprehensive income (loss)                 2,562.2 (1,856.4) 801.8
Comprehensive income (loss)                 4,271.8 (164.7) 3,547.8
Eliminations, Shelf Registration Debt Guarantor | Eliminations                      
Revenues                      
Fees and other revenues                 (11.5) (15.3) (10.4)
Net investment income (loss)                 10.4 12.1 55.9
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities                 (0.2)    
Net impairment (losses) recoveries on available-for-sale securities                     0.0
Net realized capital gains (losses)                 (0.2)    
Total revenues                 (1.3) (3.2) 45.5
Expenses                      
Operating expenses                 (10.3) (13.8) (9.6)
Total expenses                 (10.3) (13.8) (9.6)
Income (loss) before income taxes                 9.0 10.6 55.1
Income taxes (benefits)                     30.1
Equity in the net income (loss) of subsidiaries                 (3,188.9) (3,342.8) (5,326.6)
Net income (loss)                 (3,179.9) (3,332.2) (5,301.6)
Net income (loss) attributable to Principal Financial Group, Inc.                 (3,179.9) (3,332.2) (5,301.6)
Net income (loss)                 (3,179.9) (3,332.2) (5,301.6)
Other comprehensive income (loss)                 (5,057.3) 3,684.3 (1,607.6)
Comprehensive income (loss)                 $ (8,237.2) $ 352.1 $ (6,909.2)
v3.19.3.a.u2
Condensed Consolidating Financial Information - Shelf Registration Guarantor, Statements of Cash Flows (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating activities      
Net cash provided by (used in) operating activities $ 5,493.2 $ 5,156.5 $ 4,188.0
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases (14,137.1) (13,909.8) (13,371.6)
Fixed maturities available-for-sale and equity securities with intent to hold: Sales 2,397.4 3,813.1 1,413.6
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities 7,064.2 6,217.6 8,743.2
Mortgage loans acquired or originated (3,487.7) (3,447.5) (2,755.8)
Mortgage loans sold or repaid 2,335.9 2,228.4 1,872.0
Real estate acquired (127.5) (88.1) (200.5)
Real estate sold 96.3 63.5 481.9
Net (purchases) sales of property and equipment (132.4) (92.3) (164.8)
Purchase of business or interests in subsidiaries, net of cash acquired (1,208.5) (184.7)  
Net change in other investments (489.1) (302.7) (70.8)
Net cash provided by (used in) investing activities (7,688.5) (5,702.5) (4,052.8)
Financing activities      
Issuance of common stock 37.7 64.0 162.5
Acquisition of treasury stock (281.0) (671.6) (220.4)
Proceeds from financing element derivatives     0.1
Payments for financing element derivatives (26.9) (65.9) (77.6)
Purchase of subsidiary shares from noncontrolling interest (1.7) (31.1) (13.3)
Dividends to common stockholders (606.0) (598.6) (540.0)
Issuance of long-term debt 504.9 80.8 2.8
Principal repayments of long-term debt (32.2) (1.3) (56.5)
Net proceeds from (repayments of) short-term borrowings 57.5 8.5 (15.5)
Investment contract deposits 9,200.0 8,308.8 10,154.4
Investment contract withdrawals (7,747.7) (6,589.6) (9,914.6)
Net increase (decrease) in banking operation deposits 623.4 553.0 136.6
Other 5.7 (4.3) (2.5)
Net cash provided by (used in) financing activities 1,733.7 1,052.7 (384.0)
Net increase (decrease) in cash and cash equivalents (461.6) 506.7 (248.8)
Cash and cash equivalents at beginning of period 2,977.5 2,470.8 2,719.6
Cash and cash equivalents at end of period 2,515.9 2,977.5 2,470.8
Principal Financial Group, Inc. parent only | Legal Entities      
Operating activities      
Net cash provided by (used in) operating activities 7.1 (132.4) (443.2)
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases (251.5) (210.9)  
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities 200.0 2.3  
Net (purchases) sales of property and equipment (0.1) (0.1) (0.1)
Dividends and returns of capital received from (contributed to) unconsolidated entities 494.2 1,041.6 1,002.5
Net change in other investments (34.0) (2.2) (1.1)
Net cash provided by (used in) investing activities 408.6 830.7 1,001.3
Financing activities      
Issuance of common stock 37.7 64.0 162.5
Acquisition of treasury stock (281.0) (671.6) (220.4)
Dividends to common stockholders (606.0) (598.6) (540.0)
Issuance of long-term debt 493.6    
Net cash provided by (used in) financing activities (355.7) (1,206.2) (597.9)
Net increase (decrease) in cash and cash equivalents 60.0 (507.9) (39.8)
Cash and cash equivalents at beginning of period 334.9 842.8 882.6
Cash and cash equivalents at end of period 394.9 334.9 842.8
Principal Financial Services, Inc. only | Legal Entities      
Operating activities      
Net cash provided by (used in) operating activities (54.7) 696.3 (252.8)
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases (0.2)    
Fixed maturities available-for-sale and equity securities with intent to hold: Sales 0.2    
Net (purchases) sales of property and equipment (2.0)    
Purchase of business or interests in subsidiaries, net of cash acquired (1,209.6)    
Dividends and returns of capital received from (contributed to) unconsolidated entities 2,118.7 589.1 691.2
Net change in other investments (362.9) (166.2) 7.5
Net cash provided by (used in) investing activities 544.2 422.9 698.7
Financing activities      
Issuance of long-term debt 10.0 11.1 9.4
Principal repayments of long-term debt (55.9) (57.1) (38.8)
Capital received from (dividends and capital paid to) parent (494.2) (1,041.6) (1,002.5)
Net cash provided by (used in) financing activities (540.1) (1,087.6) (1,031.9)
Net increase (decrease) in cash and cash equivalents (50.6) 31.6 (586.0)
Cash and cash equivalents at beginning of period 649.0 617.4 1,203.4
Cash and cash equivalents at end of period 598.4 649.0 617.4
Principal Life Insurance Company and other subsidiaries combined | Legal Entities      
Operating activities      
Net cash provided by (used in) operating activities 5,760.7 5,030.9 4,483.6
Investing activities      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases (13,885.4) (13,698.9) (13,371.6)
Fixed maturities available-for-sale and equity securities with intent to hold: Sales 2,397.2 3,813.1 1,413.6
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities 6,864.2 6,215.3 8,743.2
Mortgage loans acquired or originated (3,487.7) (3,447.5) (2,755.8)
Mortgage loans sold or repaid 2,335.9 2,228.4 1,872.0
Real estate acquired (127.5) (88.1) (200.5)
Real estate sold 96.3 63.5 481.9
Net (purchases) sales of property and equipment (130.3) (92.2) (164.7)
Purchase of business or interests in subsidiaries, net of cash acquired 1.1 (184.7)  
Net change in other investments (235.8) (413.9) (61.6)
Net cash provided by (used in) investing activities (6,172.0) (5,605.0) (4,043.5)
Financing activities      
Proceeds from financing element derivatives     0.1
Payments for financing element derivatives (26.9) (65.9) (77.6)
Purchase of subsidiary shares from noncontrolling interest (1.7) (31.1) (13.3)
Issuance of long-term debt 11.3 80.8 2.8
Principal repayments of long-term debt (32.2) (1.3) (56.5)
Net proceeds from (repayments of) short-term borrowings 57.5 8.5 (92.0)
Capital received from (dividends and capital paid to) parent (2,118.7) (589.1) (691.2)
Investment contract deposits 9,200.0 8,308.8 10,154.4
Investment contract withdrawals (7,747.7) (6,589.6) (9,914.6)
Net increase (decrease) in banking operation deposits 623.4 553.0 136.6
Other 5.7 (4.3) (2.5)
Net cash provided by (used in) financing activities (29.3) 1,669.8 (553.8)
Net increase (decrease) in cash and cash equivalents (440.6) 1,095.7 (113.7)
Cash and cash equivalents at beginning of period 3,096.8 2,001.1 2,114.8
Cash and cash equivalents at end of period 2,656.2 3,096.8 2,001.1
Eliminations, Shelf Registration Debt Guarantor | Eliminations      
Operating activities      
Net cash provided by (used in) operating activities (219.9) (438.3) 400.4
Investing activities      
Dividends and returns of capital received from (contributed to) unconsolidated entities (2,612.9) (1,630.7) (1,693.7)
Net change in other investments 143.6 279.6 (15.6)
Net cash provided by (used in) investing activities (2,469.3) (1,351.1) (1,709.3)
Financing activities      
Issuance of long-term debt (10.0) (11.1) (9.4)
Principal repayments of long-term debt 55.9 57.1 38.8
Net proceeds from (repayments of) short-term borrowings     76.5
Capital received from (dividends and capital paid to) parent 2,612.9 1,630.7 1,693.7
Net cash provided by (used in) financing activities 2,658.8 1,676.7 1,799.6
Net increase (decrease) in cash and cash equivalents (30.4) (112.7) 490.7
Cash and cash equivalents at beginning of period (1,103.2) (990.5) (1,481.2)
Cash and cash equivalents at end of period $ (1,133.6) $ (1,103.2) $ (990.5)
v3.19.3.a.u2
Schedule I - Summary of Investments - Other Than Investments in Related Parties (Details)
$ in Millions
Dec. 31, 2019
USD ($)
Summary of Investments - Other Than Investments in Related Parties  
Cost $ 91,547.7
Amount as shown in the Consolidated Statement of Financial Position 96,351.4
Fixed maturities | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 65,302.5
Value 70,106.2
Amount as shown in the Consolidated Statement of Financial Position 70,106.2
Fixed maturities | Trading  
Summary of Investments - Other Than Investments in Related Parties  
Cost 675.9
Value 675.9
Amount as shown in the Consolidated Statement of Financial Position 675.9
U.S. government and agencies | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 1,627.0
Value 1,724.2
Amount as shown in the Consolidated Statement of Financial Position 1,724.2
States and political subdivisions | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 6,857.1
Value 7,490.0
Amount as shown in the Consolidated Statement of Financial Position 7,490.0
Non-U.S. governments | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 852.3
Value 996.2
Amount as shown in the Consolidated Statement of Financial Position 996.2
Public utilities | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 4,543.2
Value 4,191.0
Amount as shown in the Consolidated Statement of Financial Position 4,191.0
Redeemable preferred stock | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 33.8
Value 34.6
Amount as shown in the Consolidated Statement of Financial Position 34.6
All other corporate bonds | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 32,416.1
Value 36,421.8
Amount as shown in the Consolidated Statement of Financial Position 36,421.8
Residential mortgage-backed pass-through securities | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 2,913.9
Value 2,982.4
Amount as shown in the Consolidated Statement of Financial Position 2,982.4
Commercial mortgage-backed securities | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 4,746.6
Value 4,850.2
Amount as shown in the Consolidated Statement of Financial Position 4,850.2
Collateralized debt obligations | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 3,226.7
Value 3,215.3
Amount as shown in the Consolidated Statement of Financial Position 3,215.3
Other debt obligations | Available-for-sale  
Summary of Investments - Other Than Investments in Related Parties  
Cost 8,085.8
Value 8,200.5
Amount as shown in the Consolidated Statement of Financial Position 8,200.5
Equity securities  
Summary of Investments - Other Than Investments in Related Parties  
Cost 1,879.4
Value 1,879.4
Amount as shown in the Consolidated Statement of Financial Position 1,879.4
Common stocks: Banks, trust and insurance companies  
Summary of Investments - Other Than Investments in Related Parties  
Cost 456.5
Value 456.5
Amount as shown in the Consolidated Statement of Financial Position 456.5
Common stocks: Public Utilities  
Summary of Investments - Other Than Investments in Related Parties  
Cost 7.0
Value 7.0
Amount as shown in the Consolidated Statement of Financial Position 7.0
Common stocks: Industrial, miscellaneous and all other  
Summary of Investments - Other Than Investments in Related Parties  
Cost 785.6
Value 785.6
Amount as shown in the Consolidated Statement of Financial Position 785.6
Other corporate  
Summary of Investments - Other Than Investments in Related Parties  
Cost 480.7
Value 480.7
Amount as shown in the Consolidated Statement of Financial Position 480.7
Non-redeemable preferred stock  
Summary of Investments - Other Than Investments in Related Parties  
Cost 149.6
Value 149.6
Amount as shown in the Consolidated Statement of Financial Position 149.6
Mortgage loans  
Summary of Investments - Other Than Investments in Related Parties  
Cost 16,486.9
Amount as shown in the Consolidated Statement of Financial Position 16,486.9
Real estate acquired in satisfaction of debt  
Summary of Investments - Other Than Investments in Related Parties  
Cost 4.1
Amount as shown in the Consolidated Statement of Financial Position 4.1
Other real estate  
Summary of Investments - Other Than Investments in Related Parties  
Cost 1,710.7
Amount as shown in the Consolidated Statement of Financial Position 1,710.7
Policy loans  
Summary of Investments - Other Than Investments in Related Parties  
Cost 798.0
Amount as shown in the Consolidated Statement of Financial Position 798.0
Investments: Other investments  
Summary of Investments - Other Than Investments in Related Parties  
Cost 4,690.2
Amount as shown in the Consolidated Statement of Financial Position $ 4,690.2
v3.19.3.a.u2
Schedule II - Condensed Financial Information of Registrant (Parent Only) - Statements of Financial Position (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Assets    
Fixed maturities, available-for-sale $ 70,106.2 $ 60,108.5
Fixed maturities, trading 675.9 636.1
Other investments 4,690.2 4,310.3
Cash and cash equivalents 2,515.9 2,977.5
Deferred income tax assets 123.6 141.3
Investment in unconsolidated entities 830.2 868.8
Total assets 276,087.8 243,036.1
Liabilities    
Long-term debt 3,734.1 3,259.6
Total liabilities 261,137.1 231,188.9
Stockholders' equity    
Common stock, par value $0.01 per share - 2,500.0 million shares authorized, 479.3 million and 476.7 million shares issued, and 276.6 million and 279.5 million shares outstanding in 2019 and 2018 4.8 4.8
Additional paid-in capital 10,182.6 10,060.7
Retained earnings (accumulated deficit) 11,074.3 10,290.2
Accumulated other comprehensive income (loss) 1,037.9 (1,565.1)
Treasury stock, at cost (202.7 million and 197.2 million shares in 2019 and 2018) (7,681.6) (7,400.6)
Total stockholders' equity attributable to Principal Financial Group, Inc. 14,618.0 11,390.0
Total liabilities and stockholders' equity 276,087.8 243,036.1
Principal Financial Group, Inc. parent only | Legal Entities    
Assets    
Fixed maturities, available-for-sale 265.8 211.5
Fixed maturities, trading 268.2 308.9
Other investments 10.4 10.7
Cash and cash equivalents 394.9 334.9
Income taxes receivable 11.1 16.9
Deferred income tax assets 344.4 331.0
Amounts receivable from subsidiaries 3.8 5.2
Other assets 25.5 23.3
Investment in unconsolidated entities 17,539.6 13,862.4
Total assets 18,863.7 15,104.8
Liabilities    
Long-term debt 3,625.5 3,129.8
Accrued investment payable 25.4 23.1
Pension liability 590.6 557.9
Other liabilities 4.2 4.0
Total liabilities 4,245.7 3,714.8
Stockholders' equity    
Common stock, par value $0.01 per share - 2,500.0 million shares authorized, 479.3 million and 476.7 million shares issued, and 276.6 million and 279.5 million shares outstanding in 2019 and 2018 4.8 4.8
Additional paid-in capital 10,182.6 10,060.7
Retained earnings (accumulated deficit) 11,074.3 10,290.2
Accumulated other comprehensive income (loss) 1,037.9 (1,565.1)
Treasury stock, at cost (202.7 million and 197.2 million shares in 2019 and 2018) (7,681.6) (7,400.6)
Total stockholders' equity attributable to Principal Financial Group, Inc. 14,618.0 11,390.0
Total liabilities and stockholders' equity $ 18,863.7 $ 15,104.8
v3.19.3.a.u2
Schedule II - Condensed Financial Information of Registrant (Parent Only) - Statements of Financial Position - Parenthetical (Details) - $ / shares
shares in Millions
Dec. 31, 2019
Dec. 31, 2018
Condensed Financial Statements, Captions [Line Items]    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, authorized (in shares) 2,500.0 2,500.0
Common stock, issued (in shares) 479.3 476.7
Common stock, outstanding (in shares) 276.6 279.5
Treasury stock (in shares) 202.7 197.2
Principal Financial Group, Inc. parent only | Legal Entities    
Condensed Financial Statements, Captions [Line Items]    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, authorized (in shares) 2,500.0 2,500.0
Common stock, issued (in shares) 479.3 476.7
Common stock, outstanding (in shares) 276.6 279.5
Treasury stock (in shares) 202.7 197.2
v3.19.3.a.u2
Schedule II - Condensed Financial Information of Registrant (Parent Only) - Statements of Operations (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenues                      
Fees and other revenues                 $ 4,409.9 $ 4,273.8 $ 3,892.3
Net investment income (loss)                 3,998.4 3,629.2 3,459.3
Net realized capital gains (losses)                 (52.8) (75.4) 524.2
Total revenues $ 4,047.2 $ 4,458.4 $ 3,972.6 $ 3,743.9 $ 3,770.6 $ 4,348.1 $ 3,234.9 $ 2,883.6 16,222.1 14,237.2 14,093.2
Expenses                      
Other operating costs and expenses                 4,503.9 4,136.7 3,893.8
Total expenses 3,675.9 4,112.7 3,522.3 3,217.9 3,527.7 3,779.0 2,719.5 2,426.6 14,528.8 12,452.8 11,841.0
Loss before income taxes                 1,693.3 1,784.4 2,252.2
Income taxes (benefits)                 249.2 230.7 (72.3)
Net income (loss) attributable to Principal Financial Group, Inc. $ 300.9 $ 277.1 $ 386.3 $ 429.9 $ 236.5 $ 456.3 $ 456.6 $ 397.1 1,394.2 1,546.5 2,310.4
Principal Financial Group, Inc. parent only | Legal Entities                      
Revenues                      
Fees and other revenues                     7.8
Net investment income (loss)                 19.4 25.8 9.7
Net realized capital gains (losses)                 12.3 (8.2) (0.6)
Total revenues                 31.7 17.6 16.9
Expenses                      
Other operating costs and expenses                 210.9 191.9 238.1
Total expenses                 210.9 191.9 238.1
Loss before income taxes                 (179.2) (174.3) (221.2)
Income taxes (benefits)                 (44.2) (62.5) 63.1
Equity in the net income (loss) of subsidiaries                 1,529.2 1,658.3 2,594.7
Net income (loss) attributable to Principal Financial Group, Inc.                 $ 1,394.2 $ 1,546.5 $ 2,310.4
v3.19.3.a.u2
Schedule II - Condensed Financial Information of Registrant (Parent Only) - Statements of Cash Flows (Details) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating activities                      
Net income (loss) $ 315.3 $ 284.6 $ 392.1 $ 452.1 $ 231.7 $ 460.0 $ 459.5 $ 402.5 $ 1,444.1 $ 1,553.7 $ 2,324.5
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                      
Net realized capital (gains) losses                 52.8 75.4 (524.2)
Stock-based compensation                 82.6 77.4 82.7
Changes in:                      
Net cash flows for trading securities and equity securities with operating intent                 (53.8) (133.7) (332.2)
Current and deferred income taxes (benefits)                 211.2 274.7 (164.4)
Other                 11.1 (35.7) 17.0
Net cash provided by (used in) operating activities                 5,493.2 5,156.5 4,188.0
Investing activities                      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases                 (14,137.1) (13,909.8) (13,371.6)
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities                 7,064.2 6,217.6 8,743.2
Net (purchases) sales of property and equipment                 (132.4) (92.3) (164.8)
Net change in other investments                 (489.1) (302.7) (70.8)
Net cash provided by (used in) investing activities                 (7,688.5) (5,702.5) (4,052.8)
Financing activities                      
Issuance of common stock                 37.7 64.0 162.5
Acquisition of treasury stock                 (281.0) (671.6) (220.4)
Dividends to common stockholders                 (606.0) (598.6) (540.0)
Principal repayments of long-term debt                 (32.2) (1.3) (56.5)
Issuance of long-term debt                 504.9 80.8 2.8
Net cash provided by (used in) financing activities                 1,733.7 1,052.7 (384.0)
Net increase (decrease) in cash and cash equivalents                 (461.6) 506.7 (248.8)
Cash and cash equivalents at beginning of period       2,977.5       2,470.8 2,977.5 2,470.8 2,719.6
Cash and cash equivalents at end of period 2,515.9       2,977.5       2,515.9 2,977.5 2,470.8
Principal Financial Group, Inc. parent only | Legal Entities                      
Operating activities                      
Net income (loss)                 1,394.2 1,546.5 2,310.4
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                      
Net realized capital (gains) losses                 (12.3) 8.2 0.6
Stock-based compensation                 1.3 2.9 3.0
Equity in the net (income) loss of subsidiaries                 (1,529.2) (1,658.3) (2,594.7)
Changes in:                      
Net cash flows for trading securities and equity securities with operating intent                 48.7 32.4 (352.6)
Current and deferred income taxes (benefits)                 (31.0) 15.7 163.8
Other                 135.4 (79.8) 26.3
Net cash provided by (used in) operating activities                 7.1 (132.4) (443.2)
Investing activities                      
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases                 (251.5) (210.9)  
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities                 200.0 2.3  
Net (purchases) sales of property and equipment                 (0.1) (0.1) (0.1)
Net change in other investments                 (34.0) (2.2) (1.1)
Dividends and returns of capital received from (contributed to) unconsolidated entities                 494.2 1,041.6 1,002.5
Net cash provided by (used in) investing activities                 408.6 830.7 1,001.3
Financing activities                      
Issuance of common stock                 37.7 64.0 162.5
Acquisition of treasury stock                 (281.0) (671.6) (220.4)
Dividends to common stockholders                 (606.0) (598.6) (540.0)
Issuance of long-term debt                 493.6    
Net cash provided by (used in) financing activities                 (355.7) (1,206.2) (597.9)
Net increase (decrease) in cash and cash equivalents                 60.0 (507.9) (39.8)
Cash and cash equivalents at beginning of period       $ 334.9       $ 842.8 334.9 842.8 882.6
Cash and cash equivalents at end of period $ 394.9       $ 334.9       $ 394.9 $ 334.9 $ 842.8
v3.19.3.a.u2
Schedule II - Condensed Financial Information of Registrant (Parent Only) - Financial Statement Footnotes (Details) - Principal Financial Group, Inc. parent only - Legal Entities - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dividends and Returns of Capital Received from (Contributed to) Unconsolidated Entity      
Dividends and returns of capital received from (contributed to) unconsolidated entities $ 494.2 $ 1,041.6 $ 1,002.5
Nonqualified benefit plans      
Condensed Financial Statements, Captions [Line Items]      
Assets held in Rabbi trusts 731.9 671.7  
Liabilities held in Rabbi trusts $ 593.7 $ 542.4  
v3.19.3.a.u2
Schedule III - Supplementary Insurance Information (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Supplementary Insurance Information        
Deferred acquisition costs $ 3,521.3 $ 3,693.5 $ 3,540.7 $ 3,380.2
Future policy benefits and claims 40,838.2 35,664.8    
Contractholder and other policyholder funds 42,326.9 40,588.1    
Premiums and other considerations 7,866.6 6,409.6 6,217.4  
Net investment income (loss) 3,998.4 3,629.2 3,459.3  
Benefits, claims and settlement expenses 9,905.8 8,192.5 7,822.6  
Amortization of deferred acquisition costs 347.0 253.5 234.6  
Other operating expenses 4,156.9 3,883.2 3,659.2  
Retirement and Income Solutions        
Supplementary Insurance Information        
Deferred acquisition costs 833.9 988.3    
Future policy benefits and claims 25,305.1 21,217.9    
Contractholder and other policyholder funds 33,814.4 32,295.1    
Premiums and other considerations 4,862.7 3,635.9 3,671.1  
Net investment income (loss) 2,420.4 2,195.2 2,058.3  
Benefits, claims and settlement expenses 6,527.8 5,099.0 4,972.6  
Amortization of deferred acquisition costs 87.8 124.5 35.8  
Other operating expenses 1,403.5 1,140.7 1,108.5  
Principal Global Investors        
Supplementary Insurance Information        
Net investment income (loss) 10.1 4.2 13.4  
Other operating expenses 1,028.5 1,168.0 963.1  
Principal International        
Supplementary Insurance Information        
Deferred acquisition costs 11.3 13.1    
Future policy benefits and claims 4,537.1 4,317.6    
Contractholder and other policyholder funds 1,145.0 1,183.1    
Premiums and other considerations 393.3 317.2 218.0  
Net investment income (loss) 575.9 494.9 510.6  
Benefits, claims and settlement expenses 728.3 646.6 507.1  
Amortization of deferred acquisition costs 1.3 1.3 22.4  
Other operating expenses 436.0 451.0 388.1  
U.S. Insurance Solutions        
Supplementary Insurance Information        
Deferred acquisition costs 2,676.1 2,692.1    
Future policy benefits and claims 10,823.5 9,950.3    
Contractholder and other policyholder funds 7,720.0 7,458.4    
Premiums and other considerations 2,610.6 2,456.5 2,328.3  
Net investment income (loss) 854.5 815.1 785.9  
Benefits, claims and settlement expenses 2,639.2 2,444.6 2,345.3  
Amortization of deferred acquisition costs 257.9 127.7 176.4  
Other operating expenses 946.5 925.4 850.5  
Corporate        
Supplementary Insurance Information        
Future policy benefits and claims 172.5 179.0    
Contractholder and other policyholder funds (352.5) (348.5)    
Net investment income (loss) 137.5 119.8 91.1  
Benefits, claims and settlement expenses 10.5 2.3 (2.4)  
Other operating expenses $ 342.4 $ 198.1 $ 349.0  
v3.19.3.a.u2
Schedule IV - Reinsurance (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Life insurance in force      
Life insurance in force gross amount $ 577,735.3 $ 530,828.6 $ 486,887.5
Life insurance in force ceded to other companies 368,583.0 324,691.3 287,538.8
Life insurance in force assumed from other companies 999.5 1,028.6 1,059.5
Life insurance in force net amount $ 210,151.8 $ 207,165.9 $ 200,408.2
Life insurance in force, percentage of amount assumed to net (as a percent) 0.50% 0.50% 0.50%
Premiums:      
Premiums gross amount $ 8,428.1 $ 6,928.3 $ 6,699.3
Premiums ceded to other companies 563.1 520.4 483.8
Premiums assumed from other companies 1.6 1.7 1.9
Premiums net amount 7,866.6 6,409.6 6,217.4
Life insurance and annuities      
Premiums:      
Premiums gross amount 6,424.8 5,055.8 4,945.7
Premiums ceded to other companies 407.5 359.9 320.7
Premiums assumed from other companies 1.6 1.7 1.9
Premiums net amount 6,018.9 4,697.6 4,626.9
Accident and health insurance      
Premiums:      
Premiums gross amount 2,003.3 1,872.5 1,753.6
Premiums ceded to other companies 155.6 160.5 163.1
Premiums net amount $ 1,847.7 $ 1,712.0 $ 1,590.5