Principal Financial Group 2015 Annual Report Download - page 6

What’s next for our strategy?
At its core, our strategy remains the same. We know
we’re going to compete in:
• Asset management globally
• Retirement and long-term savings in the U.S.,
Latin America and Asia
• Insurance in the U.S.
Opportunities in our chosen markets remain compelling.
The global asset management industry—which includes
retail, retirement and institutional investing—is projected
to grow at a compounded annual rate of 6 percent,
surpassing $100 trillion of AUM in 2020, on its way to
$400 trillion in 2050.
1
And we know how we’ll continue to win:
• Through consistently strong investment
performance
• By solving problems and meeting the needs of
individuals, small to medium-sized businesses and
institutions
• Through strong execution of our growth strategy
In 2015, we did just that, as evidenced by exceptional
investment performance, strong customer retention,
notable recognition and essential actions to drive
long-term success.
Superior investment performance—44 funds, or
76 percent of our Morningstar-rated retail mutual
funds, had a four- or five-star rating at year-end; and
93 percent of these funds were above median for the
five-year period.
Strong customer retention—We delivered $23 billion
in positive net customer cash flows, while many of
our peers were experiencing outflows. Principal
International, our retirement and long-term savings
business in Latin America and Asia, delivered its 29th
consecutive quarter of positive flows.
Notable third party recognition—In 2015, Principal
was named by Ethisphere magazine as one of the
world’s most ethical companies. As highlighted on
page 18, we were also recognized for top-tier invest-
ment performance, as a best place to work and as a
leading business technology innovator.
Essential actions—We also positioned the company for
future success by: expanding our portfolio of income
solutions; using technology to improve the customer
experience; enhancing our distribution network; and
expanding our presence in Asia through the acquisition
of AXA’s pension business in Hong Kong, where we
are now the fifth largest provider.
What’s next for growth = what’s next
for customers
To answer “What’s next for growth?” we must answer
“What’s next for customers?” Because customer
needs and preferences are continuously changing,
this is the hard part. But this is also the part that
makes our work rewarding.
Getting people on the path to financial security
• PlanWorks: Our best practice plan design continues
to build momentum in helping more people save for
retirement. In 2015, the increase in the number of
people saving for their retirement grew at a rate more
than five times greater for our PlanWorks customers
than for our total block of 401(k) business.
• Easy Elect: Piloted in seven markets in 2015, this
patent-pending technology makes it easier for
people to understand options, make decisions and
enroll in employer-sponsored benefits, such as life
insurance and income protection, which are critical
aspects of broader financial security. Early results
show participation levels that are 6 to 10 percent
higher than traditional enrollment methods.
4Principal
1 Asset Management 2020: A Brave New World, PwC, 2014; The age of
asset management? Speech by Andrew G Haldane, Executive Director,
Financial Stability, Bank of England, April 4, 2014.