Principal Financial Group has reported mixed financial results for the first quarter of 2025, showing resilience in its asset management division despite ongoing market volatility and economic uncertainty, according to a report from AM Best.
Kamal Bhatia, president and CEO of Principal Asset Management, discussed how the business remains robust amid macroeconomic challenges such as trade disputes and market fluctuations.
Bhatia noted that while client behavior has become more unpredictable due to economic factors, the company has observed a positive shift in its client pipeline.
“Client behavior, particularly given the macro-economic environment, has become a little bit more volatile due to re-balancing,” Bhatia said during a conference call. “However, what I’m seeing is a material improvement in our pipeline, which is strengthening the fundamentals of asset management.”
In its earnings report, Principal’s net income for Q1 2025 was $138.4 million, or $2.65 per diluted share, up from $124.6 million, or $2.38 per diluted share, in the same quarter last year. Net realized capital losses for the period amounted to $115.1 million, a significant increase from $17.9 million in the prior year.
Principal also saw growth in key business segments. Assets under administration rose by 2%, reaching $1.66 trillion, the report said.
Additionally, recurring deposits in the retirement and income solutions segment grew 9%, totaling $13.8 billion. Premiums and fees in the life insurance segment also increased by $1.1 million to $235.1 million.
Christopher Littlefield, president of retirement and income solutions, emphasized that withdrawal rates have remained consistent with historical trends. He also observed a shift in client investment behavior, with more opting for guaranteed options amid market uncertainty.
“We are seeing risk-on/risk-off activity, with a change out into more guaranteed options,” Littlefield said.
CEO Deanna Strable expressed confidence in the company’s ability to weather economic challenges, drawing on Principal’s experience in dealing with market volatility.
“We are operating in a market that is incredibly dynamic,” Strable said. “Policy shifts and uncertainty surrounding the market outlook have contributed to a more cautious investor tone and heightened focus on resilience.”
She also acknowledged that the extreme market volatility in April had affected fee revenue across the company’s retirement and asset management divisions.
Looking ahead, Strable cautioned that the continued market fluctuations could make it difficult to predict the company’s performance in the upcoming quarters.
