Principal Financial Group 2013 Annual Report Download - page 5

Each day we’re executing our global investment management
strategy, which has been in place for more than a decade. We
have a unique business model:
• Our diversified set of businesses allows us to weather
challenging economic environments, as we demonstrated
during the financial crisis. Our model enabled us to emerge
from the recent crisis in a position of strength, allowing us to
complete seven strategic acquisitions since 2010.
• What makes our business model especially powerful is the
synergy and collaboration between our businesses. This
synergy results in a valuation that’s greater than the sum of its
parts and generates a higher return on equity over time.
As we continue to increase our global presence, we’re confident
The Principal is in the right geographic markets with the right
partners. We’ve purposefully gone where middle class popula-
tions are growing; where the need and appetite for long-term
savings increases each day.
Our largest acquisition to date, Cuprum, closed in 2013 and is
the latest example of successfully executing on our investment
management strategy. Cuprum is the premier pension provid-
er in Chile, so our expectations for the acquisition were high.
Those expectations have been fulfilled. Cuprum is already a
meaningful contributor to our operating earnings. And the
market holds great long-term potential as Chileans add
voluntary products to their mandatory savings. Combined with
our businesses in Mexico and Brazil, we’re now the second
largest retirement provider in Latin America6 .
Our successful business ventures and partnerships in Asia have
also delivered impressive results and hold similar potential over
time—as retirement industries develop in markets like China,
Malaysia and India.
Meeting the growing need for financial assistance
Our strategy was built around three core trends that today are
stronger than ever.
1. Aging populations – millions of people around the world are
living longer and need more money in retirement.
2. Financially constrained employers – global competition limits
what employers can spend on their benefit offerings. As a
result, flexibility in packaging benefits and strong workplace
education are keys to success. This plays to our strengths.
3. Financially constrained governments – the strain on
government-provided retirement programs continues to
grow worldwide, leading individuals to look for other ways
to save.
All of this adds up to an era of personal responsibility. And for
individuals and business owners who need to take action, but
lack the confidence and/or knowledge, The Principal can help.
For example:
• In 2013 our employees sat down with more than 115,000
individuals—right in their workplaces—to come up with a
plan to take action.
• To help individuals better understand their savings needs,
Principal® PlanWorks was introduced to help plan sponsors
and financial professionals improve participant retirement
outcomes. This holistic program delivered nearly 14,000
Retirement Readiness Reports to plan sponsors and more than
400,000 Retirement Wellness Reports to participants to help
raise awareness about income replacement needs, encourage
effective plan design and positively impact participant
savings behavior.
• For employers who need comprehensive retirement plans for
all of their employees, The Principal Total Retirement SuiteSM
combines defined contribution, defined benefit, employee
stock ownership plans and nonqualified solutions all with
one provider.
• When companies can’t afford to offer full coverage, we
provide voluntary benefits—an increasingly important way
individuals can round out their benefit portfolios.
It might be the era of personal responsibility, but our customers
don’t have to go it alone.
PRINCIPAL FINANCIAL GROUP | 2013 YEAR IN REVIEW 3
6 - The Principal is the second largest pension provider in Latin America by AUM
among multi-country pension providers.