Principal Financial Group has agreed to acquire Beam Benefits, an employee benefits company serving more than 25,000 small businesses. The Des Moines, Iowa-based insurer, listed on Nasdaq as PFG, announced the agreement on July 7, 2026, without disclosing financial terms.
Beam offers dental, vision, and ancillary benefits on a cloud-native platform with AI at its core. The company generated approximately $175 million in premiums in 2025.
Principal currently serves 180,000 employers across retirement, benefits, and business owner solutions. The acquisition is designed to extend Principal's reach in the small and midsize business segment, where Beam has built direct digital distribution. Beam's cloud-native platform uses AI to process and price coverage, and is designed to scale without proportional additions in operational overhead.
KFF data put the average family premium at $26,993 in 2025, while Mercer projects average total employer health costs will exceed $18,500 per employee in 2026. Those figures have made benefits design a strategic priority for many small and midsize employers that previously treated it as an administrative function. Demand for digital-native solutions has risen in this segment, where traditional brokerage models often generate insufficient margin to serve small accounts cost-effectively.
Amy Friedrich, president of benefits and protection at Principal, said Beam's small business focus aligned with Principal's existing market strategy. "Beam has built a meaningful customer base that generates strong premium volume," Friedrich said. She added that Beam's digital-first model and deep expertise in the small business marketplace would complement Principal's existing platform.
"The natural next step in our journey," said Tolithia Kornweibel, CEO of Beam Benefits, about the combination with Principal. She added that the deal was intended to broaden access to employee benefits for small business employers and their workers.
The Employee Benefit Research Institute found the share of small employers self-insuring at least one plan rose from 13% to 16% between 2010 and 2023, while medium-sized firms climbed from 27% to 32% over the same period. Against that backdrop, carriers have increased focus on acquiring digital distribution platforms to reach smaller employers more cost-effectively. Principal's acquisition of Beam fits that pattern.
The transaction is expected to close in the latter half of 2026, subject to customary closing conditions and regulatory approvals. Capital deployment and earnings per share growth targets remain unchanged for 2026, Principal said. The deal is expected to lift Specialty Benefits premium and fee growth to at or above the high end of Principal's 5% to 9% target in 2027.
Perella Weinberg Partners served as financial advisor to Principal and Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel. Ardea Partners LP advised Beam Benefits, with Wilson Sonsini Goodrich & Rosati acting as its legal counsel.
