Principal Financial Group, a global financial services company, is making bold moves in 2026 after a strong performance in 2025. President and CEO Deanna Strable recently spoke at Bank of America’s U.S. Financial Services Conference, outlining the company’s strategic priorities moving forward.
In 2025, Principal reported a 12% growth in adjusted earnings per share, which was at the top end of their targeted range. Return on equity also increased by 120 basis points, landing in the top half of their target range. Looking ahead to 2026, Principal has raised its return on equity target to 15%–17% and reiterated its outlook of 9%–12% EPS growth and 75%–85% free cash flow.
One of Principal’s core growth priorities is small and midsize business (SMB) clients. These clients have shown resilience and stability, with internal research indicating that 95% expect stable or increasing salaries and around 85% expect stable or increasing employment. Principal is focusing on bundling retirement and benefits within this segment to drive growth.
Principal is also investing heavily in artificial intelligence (AI) to drive productivity and margin gains. The company has scaled its AI capabilities from under 1,000 employees to approximately 17,000 employees, with around 7,000 daily users. Despite upfront costs, Principal believes that AI will bring long-term benefits to the organization.
On the asset management front, Principal’s business generated roughly $3.5–4 billion of positive flows in private markets in 2025. The company is seeing strong interest from clients in Asia and the Middle East, with a recent launch of a data center fund in Europe.
In terms of employee benefits, Principal is focused on offering a bundled approach that includes dental, life, and disability insurance. The company has seen shifts in claims trends post-COVID, with dental claims rising while life and disability loss ratios have declined.
Overall, Principal Financial Group is positioning itself for continued growth and success in 2026. With a focus on SMB clients, AI investments, and strategic asset management initiatives, the company is poised to deliver strong results in the years to come.
