Principal Financial Group 2008 Annual Report Download - page 7

In addition, disciplined risk management helped us
minimize exposure to certain problematic areas:
n We discontinued our commercial mortgage securities
issuance operation, reducing the inventory from
$1.7 billion at the beginning of 2008 to $20 million
at year-end, with minimal losses.
n We purposely limited the size of our variable
annuities with living benefits business, an area
that’s strained capital for a number of peers.
And while there’s no way to avoid some losses in a
portfolio our size, it’s important to note that our
investment portfolio is high-quality and well-
diversified by industry, geography, property type
and individual borrower. Like others in the life
insurance and retirement sectors, our liabilities tend
to be longer-term and more predictable in nature.
We manage our investment portfolio to match these
liabilities. This long-term approach combined with
our discipline and strong liquidity means we have the
ability and intent to hold assets to maturity.
Commitment. As champions of financial security,
we’re committed to giving our customers an edge.
Since we launched our worksite solutions in 2005,
we’ve made personal financial assistance available
to more than 420,000 employees at nearly 2,000
companies across the United States. We’re heartened
to see that meetings are on the rise, a clear sign that
individuals are looking for assistance as they take
action to protect their investments.
We continue to enthusiastically embrace the important
role advisers play in our business. We share a
common goal with advisers: to simplify financial
decisions for businesses and individuals so they take
action to secure their financial futures. We’ve
continued to partner with them throughout 2008 to
make sure they and their clients have the information
they need to make smart decisions. In the December
2008 PlanAdviser Defined Contribution survey, we
were recognized as a top five provider for adviser
post-sale support, adviser sales and marketing support
and adviser fee structure.
These fundamentals are helping us remain strong now
and serving us well as we look to the future.
We hope the future is brighter for all of us. If that’s to
be the case, it’s clear changes are needed. Coordinated
regulation of all financial products. Comprehensive
and meaningful disclosure to ensure full transparency.
We have stepped forward to help shape those changes,
representing the more than 19 million customers we serve.
Your voices and our expertise can be part of the solution.
Finally, we’d be remiss if we left out the most important
thing we’re made of…
n Loyal customers who have reached out to us and to
their advisers for help securing their financial futures
n Talented employees who have rallied around
The Principal and who continue to offer customers
education, assistance and a sympathetic ear
n Dedicated advisers who are working tirelessly to provide
their customers the best guidance in this critical time
n Seasoned leaders, including a senior management team
that boasts an average 27.5 years of industry experience
n Committed shareholders who have invested in our
company for the long-term, confident in our ability to
face the current challenges head on and emerge stronger
We’re made of all of you. And we’re grateful to each of you.
As always, your opinions are important to us; we hope
you will continue to share your questions, comments and
concerns. And please be sure to cast your vote in time for
the Annual Meeting of Shareholders, May 19, 2009.
J. Barry Griswell
CHAIRMAN OF THE BOARD
Larry Zimpleman
PRESIDENT AND CHIEF EXECUTIVE OFFICER
2008 Year in Review | Letter to Shareholders 5