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Principal Financial Q3 Earnings & Revenues Lag Estimates, Dividend Up
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Key Takeaways
Principal Financial's Q3 operating income rose 19% year over year to $2.10 per share.
Revenues grew 6.2% to $3.8B, driven by premiums, fees, and investment income growth.
The board approved an 8% dividend increase and returned $398M to shareholders in Q3.
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2025 operating net income of $2.10 per share missed the Zacks Consensus Estimate by 3.6%. Also, the bottom line increased 19% year over year.
Operating revenues increased 6.2% year over year to $3.8 billion due to increased premiums and other considerations, fees, and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 4.1%.
Principal Financial witnessed solid performance across the Retirement and Income Solution, Investment Management, Specialty Benefits segments and improved assets under management (AUM) and mixed performances in the other segments, offset by higher expenses.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Total expenses increased 3.8% year over year to $3.4 billion due to higher benefits, claims and settlement expenses, dividends to policyholders and operating expenses. The figure was lower than our estimate of $3.6 billion.
As of Sept. 30, 2025, Principal Financial’s AUM amounted to $784.3 billion, which included $0.4 billion of net cash flow and assets under administration of $1.8 trillion. AUM improved 10.1% from 2024-end.
Segment Update
Retirement and Income Solution: Revenues increased 11.8% year over year to $1.9 billion because of higher premiums and other considerations, fees, and other revenues and net investment income. The figure beat our estimate of $1.8 billion.
Pre-tax operating earnings increased 26% year over year to $310.3 million due to higher net revenue and disciplined expense management. The figure missed our estimate of $319 million.
Investment Management: Revenues rose 3.7% year over year to $483.9 million in the quarter due to higher fees and other revenues. The figure was higher than our estimate of $482.4 million.
Pre-tax operating earnings increased 9% year over year to $173.5 million, primarily driven by higher operating revenues less pass-through expenses and disciplined expense management. The figure was higher than our estimate of $157.1 million.
International Pension: Revenues decreased 10.5% year over year to $248 million, owing to lower premiums and other considerations, and net investment income. The figure was higher than our estimate of $245.4 million.
Pre-Tax operating earnings of $101.2 million declined 8% year over year. The metric beat our estimate of $76.4 million.
Specialty Benefits: Revenues increased 3.2% year over year to $896.5 million, owing to higher premiums and other considerations, fees and other revenues and net investment income. The metric missed our estimate of $939.2 million.
Pre-tax operating earnings of $155.5 million increased 53% year over year due to more favorable underwriting experience, along with growth in the business. The metric missed our estimate of $205.3 million.
Life Insurance: Revenues increased 5.6% year over year to $364.2 million owing to higher premiums and other considerations, fees and other revenues and net investment income. The metric missed our estimate of $422.9 million.
Pre-tax operating losses were $69 million, which was wider than the year-ago quarter’s loss of $37.3 million due to less favorable mortality. The figure was against our estimate of earnings of $107.3 million.
Corporate: Pre-tax operating losses of $91.6 million were wider than the loss of $79.4 million incurred a year ago. This increase was primarily due to lower interest income and higher operating expenses. The figure was wider than our estimate of a loss of $69.8 million.
Financial Update
As of Sept. 30, 2025, cash and cash equivalents were $5.1 billion, which increased 22% from 2024-end.
At the third-quarter end, long-term debt was $3.9 billion, which declined 0.7% from the 2024-end. As of Sept. 30, 2025, book value per share (excluding cumulative change in fair value of funds withheld, embedded derivative, and AOCI other than foreign currency translation adjustment) was $55.93, up 4.2% from 2024-end.
Dividend and Share Repurchase Update
Principal Financial returned $398 million of capital to shareholders, which included $225 million of share repurchases and $173 million of dividends in the third quarter.
The board of directors declared a fourth-quarter dividend of 79 cents per share, an 8% increase from the fourth quarter of 2024. The dividend will be paid out on Dec. 19, 2025, to shareholders of record as of Dec. 3.
Chubb Limited (CB - Free Report) reported third-quarter 2025 core operating income of $7.49 per share, which beat the Zacks Consensus Estimate by 26%. The bottom line increased 30.9% year over year. Net premiums written improved 7.5% year over year to $14.8 billion in the quarter. Our estimate was $14.4 billion while the Zacks Consensus Estimate was pegged at $14.5 billion.
Pre-tax net investment income was $1.65 billion, up 9.3% year over year. Our estimate and the Zacks Consensus Estimate were both pegged at $1.8 billion. Revenues of $16.1 billion beat the consensus estimate by 1.6% and improved 7.4% year over year. Property and casualty (P&C) underwriting income was $2.2 billion, up 55% year over year. The Zacks Consensus Estimate was pegged at $1.4 billion.
The Travelers Companies, Inc. (TRV - Free Report) reported third-quarter 2025 core income of $8.14 per share, which beat the Zacks Consensus Estimate by 35.4%. The bottom line increased 55% year over year. Travelers’ total revenues increased 5% from the year-ago quarter to $12.44 billion, primarily driven by higher premiums, net investment income, fee income and other revenues. The top-line figure beat the Zacks Consensus Estimate by 0.7%.
Net written premiums increased 1% year over year to a record $11.47 billion. The underwriting gain doubled year over year to $1.4 billion. The consolidated underlying combined ratio of 83.9 improved 170 bps year over year. The combined ratio improved 590 bps year over year to 87.3 due to lower catastrophe losses and an improvement in the underlying combined ratio, partially offset by lower net favorable prior year reserve development.
W.R. Berkley Corporation's (WRB - Free Report) third-quarter 2025 operating income of $1.10 per share beat the Zacks Consensus Estimate of $1.03 by 2.8%. The bottom line increased 18.3% year over year. Operating revenues came in at $3.6 billion, up 8.2% year over year, on the back of higher net premiums earned as well as improved net investment income and higher insurance service fees. The top line beat the consensus estimate by 0.4%.
W.R. Berkley’s net premiums written were $3.4 billion, up 5.5% year over year. Our estimate was $3.3 billion. The consolidated combined ratio (a measure of underwriting profitability) remained flat year over year at 90.9. The Zacks Consensus Estimate was pegged at 89.6.
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Principal Financial Q3 Earnings & Revenues Lag Estimates, Dividend Up
Key Takeaways
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2025 operating net income of $2.10 per share missed the Zacks Consensus Estimate by 3.6%. Also, the bottom line increased 19% year over year.
Operating revenues increased 6.2% year over year to $3.8 billion due to increased premiums and other considerations, fees, and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 4.1%.
Principal Financial witnessed solid performance across the Retirement and Income Solution, Investment Management, Specialty Benefits segments and improved assets under management (AUM) and mixed performances in the other segments, offset by higher expenses.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Principal Financial Group, Inc. price-consensus-eps-surprise-chart | Principal Financial Group, Inc. Quote
Behind the Headlines
Total expenses increased 3.8% year over year to $3.4 billion due to higher benefits, claims and settlement expenses, dividends to policyholders and operating expenses. The figure was lower than our estimate of $3.6 billion.
As of Sept. 30, 2025, Principal Financial’s AUM amounted to $784.3 billion, which included $0.4 billion of net cash flow and assets under administration of $1.8 trillion. AUM improved 10.1% from 2024-end.
Segment Update
Retirement and Income Solution: Revenues increased 11.8% year over year to $1.9 billion because of higher premiums and other considerations, fees, and other revenues and net investment income. The figure beat our estimate of $1.8 billion.
Pre-tax operating earnings increased 26% year over year to $310.3 million due to higher net revenue and disciplined expense management. The figure missed our estimate of $319 million.
Investment Management: Revenues rose 3.7% year over year to $483.9 million in the quarter due to higher fees and other revenues. The figure was higher than our estimate of $482.4 million.
Pre-tax operating earnings increased 9% year over year to $173.5 million, primarily driven by higher operating revenues less pass-through expenses and disciplined expense management. The figure was higher than our estimate of $157.1 million.
International Pension: Revenues decreased 10.5% year over year to $248 million, owing to lower premiums and other considerations, and net investment income. The figure was higher than our estimate of $245.4 million.
Pre-Tax operating earnings of $101.2 million declined 8% year over year. The metric beat our estimate of $76.4 million.
Specialty Benefits: Revenues increased 3.2% year over year to $896.5 million, owing to higher premiums and other considerations, fees and other revenues and net investment income. The metric missed our estimate of $939.2 million.
Pre-tax operating earnings of $155.5 million increased 53% year over year due to more favorable underwriting experience, along with growth in the business. The metric missed our estimate of $205.3 million.
Life Insurance: Revenues increased 5.6% year over year to $364.2 million owing to higher premiums and other considerations, fees and other revenues and net investment income. The metric missed our estimate of $422.9 million.
Pre-tax operating losses were $69 million, which was wider than the year-ago quarter’s loss of $37.3 million due to less favorable mortality. The figure was against our estimate of earnings of $107.3 million.
Corporate: Pre-tax operating losses of $91.6 million were wider than the loss of $79.4 million incurred a year ago. This increase was primarily due to lower interest income and higher operating expenses. The figure was wider than our estimate of a loss of $69.8 million.
Financial Update
As of Sept. 30, 2025, cash and cash equivalents were $5.1 billion, which increased 22% from 2024-end.
At the third-quarter end, long-term debt was $3.9 billion, which declined 0.7% from the 2024-end. As of Sept. 30, 2025, book value per share (excluding cumulative change in fair value of funds withheld, embedded derivative, and AOCI other than foreign currency translation adjustment) was $55.93, up 4.2% from 2024-end.
Dividend and Share Repurchase Update
Principal Financial returned $398 million of capital to shareholders, which included $225 million of share repurchases and $173 million of dividends in the third quarter.
The board of directors declared a fourth-quarter dividend of 79 cents per share, an 8% increase from the fourth quarter of 2024. The dividend will be paid out on Dec. 19, 2025, to shareholders of record as of Dec. 3.
Zacks Rank
Principal Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Chubb Limited (CB - Free Report) reported third-quarter 2025 core operating income of $7.49 per share, which beat the Zacks Consensus Estimate by 26%. The bottom line increased 30.9% year over year. Net premiums written improved 7.5% year over year to $14.8 billion in the quarter. Our estimate was $14.4 billion while the Zacks Consensus Estimate was pegged at $14.5 billion.
Pre-tax net investment income was $1.65 billion, up 9.3% year over year. Our estimate and the Zacks Consensus Estimate were both pegged at $1.8 billion. Revenues of $16.1 billion beat the consensus estimate by 1.6% and improved 7.4% year over year. Property and casualty (P&C) underwriting income was $2.2 billion, up 55% year over year. The Zacks Consensus Estimate was pegged at $1.4 billion.
The Travelers Companies, Inc. (TRV - Free Report) reported third-quarter 2025 core income of $8.14 per share, which beat the Zacks Consensus Estimate by 35.4%. The bottom line increased 55% year over year. Travelers’ total revenues increased 5% from the year-ago quarter to $12.44 billion, primarily driven by higher premiums, net investment income, fee income and other revenues. The top-line figure beat the Zacks Consensus Estimate by 0.7%.
Net written premiums increased 1% year over year to a record $11.47 billion. The underwriting gain doubled year over year to $1.4 billion. The consolidated underlying combined ratio of 83.9 improved 170 bps year over year. The combined ratio improved 590 bps year over year to 87.3 due to lower catastrophe losses and an improvement in the underlying combined ratio, partially offset by lower net favorable prior year reserve development.
W.R. Berkley Corporation's (WRB - Free Report) third-quarter 2025 operating income of $1.10 per share beat the Zacks Consensus Estimate of $1.03 by 2.8%. The bottom line increased 18.3% year over year. Operating revenues came in at $3.6 billion, up 8.2% year over year, on the back of higher net premiums earned as well as improved net investment income and higher insurance service fees. The top line beat the consensus estimate by 0.4%.
W.R. Berkley’s net premiums written were $3.4 billion, up 5.5% year over year. Our estimate was $3.3 billion. The consolidated combined ratio (a measure of underwriting profitability) remained flat year over year at 90.9. The Zacks Consensus Estimate was pegged at 89.6.