FULLTEXT DEL 3 AV 4
10-Q – 2026-04-29 – pfg-20260331x10q.htm
Prior years 165.8 175.0 Total payments 430.2 431.1 Net balance at end of period 1,272.0 1,317.7 Plus: reinsurance recoverable 62.8 61.0 Balance at end of period $ 1,334.8 $ 1,378.7 Incurred liability adjustments relating to prior years, which affected current operations during 2026 and 2025, resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims. 57 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Long-Duration Contracts Gross Premiums or Assessments and Interest Accretion The amount of gross premiums or assessments and interest accretion recognized by segment in the consolidated statements of operations was as follows: Gross premiums or assessments (1) Interest accretion (2) For the three months ended For the three months ended March 31, March 31, 2026 2025 2026 2025 (in millions) Retirement and Income Solutions: Pension risk transfer (3) $ 168.4 $ 806.1 $ 326.0 $ 300.5 Individual fixed income annuities 5.5 8.2 47.6 50.3 Total Retirement and Income Solutions 173.9 814.3 373.6 350.8 Principal Asset Management – International Pension: Latin America: Individual fixed income annuities (4) — 1.8 54.4 88.8 Benefits and Protection: Specialty Benefits: Individual disability 160.5 158.6 26.9 25.8 Life Insurance: Universal life 181.4 177.0 74.4 68.5 Term life 174.3 170.3 18.0 15.5 Total Benefits and Protection 516.2 505.9 119.3 109.8 Corporate: Long-term care insurance 1.7 1.7 2.4 2.4 Total per consolidated statements of operations $ 691.8 $ 1,323.7 $ 549.7 $ 551.8 (1) Gross premiums are included within premiums and other considerations on the consolidated statements of operations. Assessments, which are only applicable to the Life Insurance – Universal life level of aggregation, are included within fees and other revenues on the consolidated statements of operations . (2) Interest accretion is included within benefits, claims and settlement expenses on the consolidated statements of operations. (3) Since premium received from pension risk transfer products is generally in the form of single payments, the level of premiums can fluctuate depending on the number of large-scale annuity sales in a particular quarter. (4) Includes inflation adjustments included within the liability for future policy benefits rollforward for interest accretion. Liability for Future Policy Benefits The liability for future policy benefits (“LFPB”) for individual and group annuities is generally equal to the present value of expected future policy benefit payments. The reserves are computed using assumptions for mortality and interest. The LFPB for non-participating term life insurance, individual disability income contracts and individual and group long-term care contracts is generally equal to the present value of expected future policy benefit payments less the present value of expected net premiums. The reserves are computed using assumptions for mortality, interest, morbidity and lapse. Cohorts are used as the unit of account for liability measurement. Actual cash flows are grouped into issue-year cohorts for the liability calculation and updated quarterly. We review and update, if necessary, assumptions used to measure cash flows for the LFPB during the third quarter of each year, or more frequently if evidence suggests assumptions should be revised. The change in our liability estimate as a result of updating cash flow assumptions is recognized in net income. 58 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) An interest accretion rate is determined for an identified cohort and remains unchanged after the issue year. For policies issued on or prior to December 31, 2020, the interest accretion rate is based on the assumed investment yield when the business was issued. For policies issued after December 31, 2020, the interest accretion rate is based on the upper-medium grade fixed-income instrument yields, which is generally equivalent to a single-A rated bond yield matched to the duration of our insurance liabilities, when the business was issued. The LFPB is remeasured to reflect current upper-medium grade fixed-income instrument yields as of each reporting date. The liability is calculated by discounting cash flows using rate curves reflecting the currency and duration of the insurance liabilities. For discount rate tenors, or points on the curves, where the upper-medium grade fixed-income instrument yields are not liquid or limited observable market data is available, we use various estimation techniques consistent with fair value measurement guidance. For our individual fixed income annuities in Latin America, the discount rate methodology is designed to prioritize observable inputs based on market data available in the local debt markets where the respective policies are issued in the currency in which the policies are denominated. For discount rate tenors where upper-medium grade fixed-income instrument yields based on international rating standards are not liquid or limited observable market data is available, estimation techniques are used to determine a curve in the appropriate currency. Further details regarding reference rates used are included under “Interest Accretion and Current Discount Rates.” Retirement and Income Solutions The balances and the changes in the present value for expected future policy benefits were as follows: For the three months ended For the year ended March 31, 2026 December 31, 2025 Pension Individual Pension Individual risk fixed income risk fixed income transfer annuities transfer annuities ($ in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 27,349.3 $ 4,367.4 $ 24,958.1 $ 4,504.6 Effect of changes in discount rate assumptions at beginning of period 1,294.3 297.6 1,938.8 420.4 Balance at beginning of period at original discount rate 28,643.6 4,665.0 26,896.9 4,925.0 Effect of actual variances from expected experience ( 5.3 ) ( 0.3 ) ( 17.9 ) 2.3 Adjusted beginning of period balance at original discount rate 28,638.3 4,664.7 26,879.0 4,927.3 Interest accrual 326.0 47.6 1,234.2 197.2 Benefit payments ( 645.4 ) ( 122.6 ) ( 2,442.8 ) ( 490.0 ) Issuances 167.8 5.5 2,973.2 30.5 Balance at end of period at original discount rate 28,486.7 4,595.2 28,643.6 4,665.0 Effect of changes in discount rate assumptions at end of period ( 1,708.5 ) ( 355.0 ) ( 1,294.3 ) ( 297.6 ) Future policy benefits 26,778.2 4,240.2 27,349.3 4,367.4 Reinsurance impact — ( 4,181.2 ) — ( 4,310.3 ) Future policy benefits after reinsurance $ 26,778.2 $ 59.0 $ 27,349.3 $ 57.1 Weighted-average duration for future policy benefits (years) (1) 7.8 7.0 7.9 7.1 (1) Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort. 59 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Principal Asset Management – International Pension The balances and the changes in the present value for expected future policy benefits for Latin America – Individual fixed income annuities were as follows: For the three months ended For the year ended March 31, 2026 December 31, 2025 ($ in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 4,600.5 $ 4,126.9 Effect of changes in discount rate assumptions at beginning of period ( 493.5 ) ( 368.4 ) Balance at beginning of period at original discount rate 4,107.0 3,758.5 Effect of actual variances from expected experience 1.0 ( 0.4 ) Adjusted beginning of period balance at original discount rate 4,108.0 3,758.1 Interest accrual (1) 54.4 293.1 Benefit payments ( 91.1 ) ( 335.6 ) Issuances — 6.4 Foreign currency translation adjustment ( 139.6 ) 385.0 Balance at end of period at original discount rate 3,931.7 4,107.0 Effect of changes in discount rate assumptions at end of period 505.3 493.5 Future policy benefits $ 4,437.0 $ 4,600.5 Weighted-average duration for future policy benefits (years) (2) 9.5 9.6 (1) Includes inflation adjustments. (2) Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort. 60 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Benefits and Protection The balances and the changes in the present value for expected net premiums and expected future policy benefits were as follows: For the three months ended For the year ended March 31, 2026 December 31, 2025 Specialty Life Specialty Life Benefits Insurance Benefits Insurance Individual Individual disability Term life disability Term life ($ in millions) Present value of expected net premiums Balance at beginning of period $ 2,740.8 $ 4,392.2 $ 2,680.6 $ 4,107.2 Effect of changes in discount rate assumptions at beginning of period 349.8 198.4 436.4 290.1 Balance at beginning of period at original discount rate 3,090.6 4,590.6 3,117.0 4,397.3 Effect of changes in cash flow assumptions — — ( 22.5 ) 163.2 Effect of actual variances from expected experience 28.7 ( 14.8 ) 114.8 11.7 Adjusted beginning of period balance at original discount rate 3,119.3 4,575.8 3,209.3 4,572.2 Interest accrual 27.4 53.6 108.8 208.7 Net premiums collected ( 73.2 ) ( 105.2 ) ( 298.0 ) ( 418.8 ) Issuances 15.0 55.4 70.5 228.5 Balance at end of period at original discount rate 3,088.5 4,579.6 3,090.6 4,590.6 Effect of changes in discount rate assumptions at end of period ( 389.3 ) ( 270.8 ) ( 349.8 ) ( 198.4 ) Balance at end of period $ 2,699.2 $ 4,308.8 $ 2,740.8 $ 4,392.2 Present value of expected future policy benefit payments Balance at beginning of period $ 4,735.0 $ 5,907.9 $ 4,509.6 $ 5,355.2 Effect of changes in discount rate assumptions at beginning of period 1,191.3 215.7 1,302.8 366.0 Balance at beginning of period at original discount rate 5,926.3 6,123.6 5,812.4 5,721.2 Effect of changes in cash flow assumptions — — ( 42.6 ) 240.4 Effect of actual variances from expected experience 34.3 ( 29.3 ) 107.9 4.1 Adjusted beginning of period balance at original discount rate 5,960.6 6,094.3 5,877.7 5,965.7 Interest accrual 54.3 71.6 213.8 275.3 Benefit payments ( 61.0 ) ( 77.2 ) ( 234.1 ) ( 359.7 ) Issuances 14.4 58.7 68.9 242.3 Balance at end of period at original discount rate 5,968.3 6,147.4 5,926.3 6,123.6 Effect of changes in discount rate assumptions at end of period ( 1,291.3 ) ( 314.5 ) ( 1,191.3 ) ( 215.7 ) Balance at end of period $ 4,677.0 $ 5,832.9 $ 4,735.0 $ 5,907.9 Future policy benefits (1) $ 1,977.8 $ 1,524.1 $ 1,994.2 $ 1,515.7 Reinsurance impact ( 425.3 ) 11.7 ( 430.0 ) 9.8 Future policy benefits after reinsurance $ 1,552.5 $ 1,535.8 $ 1,564.2 $ 1,525.5 Weighted-average duration for future policy benefits (years) (2) 17.0 7.3 17.2 7.4 (1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums. (2) Represents the average of the cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort. 61 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) We updated our actuarial assumptions during the third quarter of 2025, resulting in a $ 20.1 million decrease in the LFPB and a $ 16.2 million increase to income before taxes, net of reinsurance, for Individual disability. This was primarily due to favorable updates to morbidity assumptions. The updates also resulted in a $ 77.2 million increase in the LFPB and a $ 63.0 million decrease to income before taxes, net of reinsurance, for Term life. This was primarily due to unfavorable updates to lapse and mortality assumptions. Additional Liability for Certain Benefit Features The LFPB also includes an additional reserve on certain universal life contracts where benefit features result in gains in early years followed by losses in later years. The liability for these future losses is accrued in relation to estimated contract assessments. A premium deficiency exists if the net liabilities together with future premiums are determined to be insufficient to provide for expected future policy benefits. Premium deficiency testing considers, among other factors, anticipated investment income and does not include a provision for adverse deviation. We did not have a premium deficiency reserve as of March 31, 2026 or December 31, 2025. The balances and the changes in the additional liability for certain benefit features for Life Insurance - Universal life contracts, excluding the impact of unrealized gains (losses), were as follows: For the three months ended For the year ended March 31, 2026 December 31, 2025 ($ in millions) Balance at beginning of period $ 6,604.8 $ 6,037.2 Effect of changes in cash flow assumptions — 6.8 Effect of actual variances from expected experience 14.0 18.5 Interest accrual 74.4 282.4 Net assessments collected 107.6 430.6 Benefit payments ( 61.5 ) ( 170.7 ) Balance at end of period 6,739.3 6,604.8 Reinsurance impact ( 6,728.5 ) ( 6,593.6 ) Balance at end of period after reinsurance $ 10.8 $ 11.2 Weighted-average duration for additional liability (years) (1) 21.2 21.6 (1) Represents the average of the cohort-level duration of the benefits less the net assessment cash flows weighted by the reserve balance for each cohort. 62 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Corporate The balances and the changes in the present value for expected net premiums and expected future policy benefits for long-term care insurance were as follows: For the three months ended For the year ended March 31, 2026 December 31, 2025 ($ in millions) Present value of expected net premiums Balance at beginning of period $ 32.4 $ 30.8 Effect of changes in discount rate assumptions at beginning of period ( 2.0 ) ( 1.3 ) Balance at beginning of period at original discount rate 30.4 29.5 Effect of changes in cash flow assumptions — 3.3 Effect of actual variances from expected experience ( 0.2 ) 0.3 Adjusted beginning of period balance at original discount rate 30.2 33.1 Interest accrual 0.4 1.8 Net premiums collected ( 1.5 ) ( 4.5 ) Balance at end of period at original discount rate 29.1 30.4 Effect of changes in discount rate assumptions at end of period 1.5 2.0 Balance at end of period $ 30.6 $ 32.4 Present value of expected future policy benefit payments Balance at beginning of period $ 199.1 $ 195.6 Effect of changes in discount rate assumptions at beginning of period ( 12.7 ) ( 8.8 ) Balance at beginning of period at original discount rate 186.4 186.8 Effect of changes in cash flow assumptions — 1.3 Effect of actual variances from expected experience 0.2 3.4 Adjusted beginning of period balance at original discount rate 186.6 191.5 Interest accrual 2.8 11.2 Benefit payments ( 3.9 ) ( 16.3 ) Balance at end of period at original discount rate 185.5 186.4 Effect of changes in discount rate assumptions at end of period 8.9 12.7 Balance at end of period $ 194.4 $ 199.1 Future policy benefits (1) $ 163.8 $ 166.7 Reinsurance impact ( 163.8 ) ( 166.7 ) Future policy benefits after reinsurance $ — $ — Weighted-average duration for future policy benefits (years) (2) 9.5 9.7 (1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums. (2) Represents the average of cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort. 63 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Expected Future Gross Premiums and Benefit Payments The amounts of expected undiscounted future benefit payments, expected undiscounted future gross premiums and expected discounted future gross premiums, utilizing the current upper-medium fixed-income instrument yield, were as follows: March 31, 2026 December 31, 2025 (in millions) Retirement and Income Solutions: Pension risk transfer Expected undiscounted future benefit payments $ 42,254.0 $ 42,601.7 Individual fixed income annuities Expected undiscounted future benefit payments $ 6,115.7 $ 6,221.3 Principal Asset Management – International Pension: Latin America: Individual fixed income annuities Expected undiscounted future benefit payments $ 5,674.9 $ 5,945.8 Benefits and Protection – Specialty Benefits: Individual disability Expected discounted future gross premiums $ 5,593.9 $ 5,683.8 Expected undiscounted future gross premiums $ 8,748.2 $ 8,763.7 Expected undiscounted future benefit payments $ 10,000.3 $ 9,951.7 Benefits and Protection – Life Insurance: Term life Expected discounted future gross premiums $ 6,834.5 $ 6,929.2 Expected undiscounted future gross premiums $ 12,005.1 $ 11,960.4 Expected undiscounted future benefit payments $ 9,675.3 $ 9,653.9 Corporate: Long-term care insurance Expected discounted future gross premiums $ 35.3 $ 37.4 Expected undiscounted future gross premiums $ 50.4 $ 52.7 Expected undiscounted future benefit payments $ 359.6 $ 363.1 64 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Interest Accretion and Current Discount Rates The interest accretion rate shown for each level of aggregation is an average of the cohort-level accretion rates weighted by the reserve balance for each cohort within that level of aggregation. The current discount rate is calculated at a cohort-level based on current upper-medium fixed-income instrument yields and weighted by the reserve balance for each cohort within each level of aggregation. The weighted-average rates were as follows: Interest accretion rate Current discount rate March 31, 2026 December 31, 2025 March 31, 2026 December 31, 2025 Retirement and Income Solutions: Pension risk transfer 4.71 % 4.70 % 5.50 % 5.28 % Individual fixed income annuities 4.22 % 4.22 % 5.39 % 5.16 % Principal Asset Management – International Pension (1): Latin America: Individual fixed income annuities 4.19 % 4.19 % 2.69 % 2.78 % Benefits and Protection: Specialty Benefits: Individual disability 3.83 % 3.84 % 5.65 % 5.43 % Life Insurance: Universal life 4.74 % 4.74 % See note (2) See note (2) Term life 4.69 % 4.81 % 5.16 % 4.91 % Corporate: Long-term care insurance 6.16 % 6.16 % 5.58 % 5.36 % (1) The interest accretion rate and current discount rate are Chilean real rates, excluding inflation, in the local currency. (2) The additional liability for certain benefit features for Life Insurance – Universal life is measured using the discount rate at contract inception. Therefore, the current discount rate is not applicable for this product. 9. Market Risk Benefits Contracts or contract features that provide protection to the policyholder from capital market risk, including equity, interest rate or foreign exchange risk, and expose us to other-than-nominal capital market risk are classified as MRBs. We issue certain annuity contracts that include MRBs that have been bifurcated from the host contract. The Retirement and Income Solutions segment offers variable annuity products with GMWB riders and GMDB riders, including return-of-premium GMDB and GMWB riders for its RILA products. MRBs are measured at fair value at the contract level and can be in either an asset or liability position, depending on certain inputs at the reporting date. MRB assets and liabilities are presented separately within the consolidated statements of financial position. Increases to an asset or decreases to a liability are described as favorable changes to fair value. Changes in fair value are reported in MRB remeasurement (gain) loss on the consolidated statements of operations. However, the change in fair value related to our own nonperformance risk is reported in OCI. For contracts that contain multiple MRB features, the MRBs are valued on a combined basis using an integrated model. MRBs are classified as Level 3 fair value measurements as the fair value is based on unobservable inputs. The key assumptions for calculating the fair value of the MRBs are market assumptions such as equity market returns, interest rate levels, market volatility and correlations and policyholder behavior assumptions such as lapse, mortality, utilization and withdrawal patterns. Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The MRBs are valued using stochastic models that incorporate a spread reflecting our own nonperformance risk. 65 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) The assumption for our own nonperformance risk for MRBs is based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Increases (decreases) in our own nonperformance risk, which impacts the rates used to discount future cash flows, could lead to favorable (unfavorable) changes in the fair value of the MRBs. Long-term interest rates are used as the mean return when projecting the growth in the value of the associated account value and impact the discount rate used in the discounted future cash flows valuation. The amount of claims will increase if account value is not sufficient to cover guaranteed withdrawals. An increase (decrease) in risk-free rates could cause a favorable (unfavorable) change in the fair value of the MRBs. A decrease (increase) in market volatilities could cause a favorable (unfavorable) change in the fair value of the MRBs. An increase (decrease) in mortality rates or the overall lapse rate assumptions could cause a favorable (unfavorable) change in the fair value of the MRBs. The lapse rate assumption may vary dynamically based on the relationship between the guarantee and associated account value. A weaker (stronger) dynamic lapse rate assumption could lead to favorable (unfavorable) changes in the fair value of the MRBs. The utilization rate assumption includes how many contractholders will take withdrawals, when they will take them and how much of their benefit they will take. A decrease (increase) in the number of contractholders taking withdrawals, contractholders taking withdrawals earlier versus later, or contractholders taking more versus less of their benefit could lead to favorable (unfavorable) changes in the fair value of the MRBs. The following tables summarize disaggregated MRB amounts in an asset and liability position reported in the consolidated statements of financial position. March 31, 2026 December 31, 2025 Net asset Net asset Asset Liability (liability) Asset Liability (liability) (in millions) Retirement and Income Solutions: Individual variable annuities $ 163.7 $ 81.4 $ 82.3 $ 197.1 $ 66.9 $ 130.2 Total MRB per consolidated statements of financial position $ 163.7 $ 81.4 $ 82.3 $ 197.1 $ 66.9 $ 130.2 66 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Retirement and Income Solutions The net asset (liability) balances and the changes in the valuation of the MRBs for Individual variable annuities were as follows: For the three months ended For the year ended March 31, 2026 December 31, 2025 ($ in millions) Balance at beginning of period $ 130.2 $ 137.4 Effect of changes in nonperformance risk at beginning of period 17.0 19.0 Adjusted balance at beginning of period 147.2 156.4 Effect of: Interest accrual and expected policyholder behavior ( 17.8 ) ( 62.8 ) Benefit payments 0.1 — Changes in interest rates 8.1 13.0 Changes in equity markets ( 12.4 ) 53.1 Changes in equity index volatility ( 28.7 ) ( 8.3 ) Actual policyholder behavior different from expected behavior ( 0.5 ) ( 3.9 ) Changes in other future expected assumptions — ( 0.3 ) Adjusted balance at end of period 96.0 147.2 Effect of changes in nonperformance risk at end of period ( 13.7 ) ( 17.0 ) Balance at end of period $ 82.3 $ 130.2 Weighted-average attained age of policyholders (years) (1) 66.9 67.0 Net amount at risk (2) $ 82.2 $ 29.3 (1) The weighted-average attained age is calculated at the contract level using the total contributions since inception and the age of the contractholders. (2) The net amount at risk for our GMDB riders is defined as the current GMDB amount in excess of the current account balance. The net amount at risk for our GMWB riders is defined as the greater of the present value of the GMWB payments less the current account balance or zero. For contracts with both GMDB and GMWB riders, the net amount at risk is the greater of the GMDB or GMWB net amount at risk. We had an increase in the net amount at risk in 2026 primarily as a result of decreases in the equity markets. Significant changes to inputs and assumptions that impacted the change in the MRB fair value measurement shown above were as follows: For the three months ended For the year ended March 31, 2026 December 31, 2025 Change in net Change in net Change in input MRB asset (liability) Change in input MRB asset (liability) Long-term interest rate Increased Favorable Increased Favorable Equity markets Decreased Unfavorable Increased Favorable Equity market volatilities Increased Unfavorable Increased Unfavorable Own nonperformance risk Increased Favorable Increased Favorable See “Unobservable Inputs for Fair Value Measurement” for additional details on the inputs. 67 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Unobservable Inputs for Fair Value Measurement The following table provides quantitative information about the significant unobservable inputs used for fair value measurements of MRBs. The utilization rate and mortality rate inputs are omitted from the table as a range does not provide meaningful presentation. The utilization rate represents the number of contractholders taking withdrawals in addition to the amount and timing of the withdrawals. The mortality rate is an input based on an appropriate industry mortality table. March 31, 2026 December 31, 2025 Weighted- Weighted- Range of inputs Average Range of inputs Average Retirement and Income Solutions: Individual variable annuities Long-term interest rate (1) 4.88 - 4.88 % 4.88 % 4.80 - 4.84 % 4.82 % Long-term equity market volatility 17.80 - 40.79 % 22.57 % 17.80 - 38.80 % 21.94 % Nonperformance risk 0.59 - 1.20 % 1.02 % 0.49 - 1.12 % 0.95 % Lapse rate 0.90 - 55.00 % 6.71 % 0.90 - 55.00 % 6.51 % (1) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. The rate curves are derived from an interpolation between various observable swap rates. 10. Reinsurance We reinsure a portion of the insurance risks associated with our individual disability, traditional life, universal life, medical and long-term care insurance as well as retail fixed annuity contracts with significant life insurance risk through reinsurance agreements with unaffiliated reinsurance companies, primarily on a quota share, excess loss, yearly renewable term (“YRT”) or coinsurance basis. We have coinsurance with funds withheld reinsurance agreements in which we cede our U.S. retail fixed annuity and ULSG blocks of business using both the reinsurance and deposit methods of accounting. We are contingently liable with respect to reinsurance ceded to other companies in the event the reinsurer is unable to meet the obligations it has assumed. As of March 31, 2026, and December 31, 2025, we had $ 14,858.7 million and $ 14,923.9 million of reinsurance recoverable assets, respectively, included in reinsurance recoverable and deposit receivable on the consolidated statements of financial position, which does not reflect potentially offsetting impacts of collateral. As of March 31, 2026, and December 31, 2025, we had $ 27.7 million and $ 23.5 million of reinsurance recoverable liabilities, respectively, included in future policy benefits and claims on the consolidated statements of financial position. 68 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows: For the three months ended March 31, 2026 2025 (in millions) Premiums and other considerations: Direct $ 1,276.4 $ 1,883.4 Ceded ( 128.3 ) ( 132.1 ) Net premiums and other considerations $ 1,148.1 $ 1,751.3 Benefits, claims and settlement expenses: Direct $ 2,035.5 $ 2,598.0 Ceded ( 424.4 ) ( 378.0 ) Net benefits, claims and settlement expenses $ 1,611.1 $ 2,220.0 LFPB remeasurement (gain) loss: Direct $ 1.1 $ 6.1 Ceded ( 15.8 ) ( 3.9 ) Net LFPB remeasurement (gain) loss $ ( 14.7 ) $ 2.2 As of March 31, 2026 and December 31, 2025, we had a $ 3,886.3 million and $ 4,076.2 million reinsurance deposit receivable, respectively. Refer to Note 3, Investments, for information on our financing receivables valuation allowance related to the reinsurance recoverable and deposit receivable. Cost of Reinsurance A reinsurance asset or liability is established to spread the expected net reinsurance costs or profits over the expected term of the contracts. The cost of reinsurance asset and liability are reported in premiums due and other receivables and liability for future policy benefits and claims, respectively, on the consolidated statements of financial position. The cost of reinsurance asset and liability included on the consolidated statements of financial position were as follows: March 31, 2026 December 31, 2025 (in millions) Cost of reinsurance asset $ 3,082.2 $ 3,103.2 Cost of reinsurance liability $ 958.9 $ 971.4 Cost of reinsurance amortization, including the impact of remeasurement, of $ 9.2 million and $ 20.0 million for the three months ended March 31, 2026 and 2025, respectively, was reported in benefits, claims and settlement expenses and liability for future policy benefits remeasurement (gain) loss on the consolidated statements of operations. 69 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Funds Withheld The following assets were held in support of our reserves associated with our coinsurance with funds withheld agreements and are reported in the line items shown on the consolidated statements of financial position. March 31, 2026 December 31, 2025 (in millions) Fixed maturities, available-for-sale $ 12,562.9 $ 13,300.1 Fixed maturities, trading 273.4 279.3 Equity securities 0.3 0.3 Mortgage loans 2,028.2 2,002.9 Other investments 1,784.4 1,708.7 Cash and cash equivalents 818.5 547.8 Accrued interest income 158.8 159.0 Net other liabilities ( 37.2 ) ( 89.2 ) Net assets $ 17,589.3 $ 17,908.9 Certain assets are reported at amortized cost while the fair value of those assets is reflected in the funds withheld payable. As of March 31, 2026 and December 31, 2025, we had a $ 17,453.1 million and $ 17,783.4 million funds withheld payable, which was net of a $ 2,810.8 million and $ 2,633.4 million embedded derivative asset, respectively. The change in fair value of the embedded derivative was a gain (loss) of $ 177.4 million and $( 209.7 ) million for the three months ended March 31, 2026 and 2025, respectively. While the economic benefits of the funds withheld assets flow to the reinsurer, we retain legal ownership of the assets within the funds withheld account. Guidelines are in place to ensure the investment risk is appropriately managed. Net investment income and net realized capital gains (losses) related to the assets on the consolidated statements of operations is reported net of the amounts that flow to the reinsurer. The realized gains and losses that do not flow to the reinsurer are reported in net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations. Following are the components of net realized capital gains (losses) on the funds withheld assets that were passed to the reinsurer. For the three months ended March 31, 2026 2025 (in millions) Fixed maturities, available-for-sale $ ( 17.9 ) $ ( 28.0 ) Fixed maturities, trading ( 2.7 ) 0.1 Mortgage loans ( 3.9 ) ( 1.4 ) Derivatives ( 0.7 ) ( 2.2 ) Net realized capital losses $ ( 25.2 ) $ ( 31.5 ) 11. Income Taxes Effective Income Tax Rate The provision for income taxes for interim periods is based on an estimated annual effective tax rate. Excluded from the estimated annual effective tax rate are discrete items occurring during the period, including those which do not relate to ordinary operating income. The effective tax rate for the three months ended March 31, 2026 was 14 %. The effective tax rate differed from the U.S. federal statutory tax rate of 21 % due primarily to tax benefits from the dividends received deduction, interest exclusion from taxable income and the impact of equity method presentation. 70 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) The effective tax rate for the three months ended March 31, 2025 was ( 118 )%. The negative effective tax rate differed from the U.S. federal statutory tax rate of 21 % due primarily to modest pre-tax income with no proportionate change in beneficial permanent tax differences such as foreign tax credits and the dividends received deduction. Pillar Two Model Rules We are currently monitoring global enactments of the Pillar Two model rules proposed by the Organisation for Economic Co-operation and Development (“OECD”), which brings forward a 15% global minimum tax. Generally, a company is required to consider the impact of new tax law on realizability of its deferred tax assets (“DTAs”), including determination of whether a change to its valuation allowance amounts is necessary. We made an accounting policy election to disregard the Pillar Two model rules when evaluating DTAs and rather recognize a current period tax expense when incurred. Certain foreign jurisdictions have enacted, or are in the process of enacting, legislation implementing Income Inclusion Rules or Undertaxed Profits Rules, which may result in additional tax liabilities for multinational companies. On January 5, 2026, the OECD released administrative guidance for a “Side-by-Side” agreement that addresses the interaction of Pillar Two with the U.S. tax system. We recognize the effect of income tax legislation in the period of enactment; therefore, we will monitor the legislative enactment of the “Side-by-Side” agreement on a jurisdiction-by-jurisdiction basis. Income taxes for the three months ended March 31, 2026, reflect the impact of enacted Pillar Two legislation in applicable jurisdictions based on management’s current interpretation of each jurisdiction’s tax law. 12. Employee and Agent Benefits Components of Net Periodic Benefit Cost Other postretirement Pension benefits benefits For the three months ended For the three months ended March 31, March 31, 2026 2025 2026 2025 (in millions) Service cost $ 16.3 $ 14.7 $ — $ — Interest cost 43.3 43.1 0.7 0.8 Expected return on plan assets ( 45.9 ) ( 42.9 ) ( 1.2 ) ( 1.1 ) Amortization of prior service benefit ( 3.7 ) ( 3.8 ) ( 0.3 ) ( 0.3 ) Recognized net actuarial (gain) loss 6.7 8.3 ( 0.5 ) ( 0.4 ) Settlement 2.6 — — — Net periodic benefit cost (income) $ 19.3 $ 19.4 $ ( 1.3 ) $ ( 1.0 ) The components of net periodic benefit cost including the service cost component are included in operating expenses on the consolidated statements of operations. Contributions Our funding policy for our qualified pension plan is to fund the plan annually in an amount at least equal to the minimum annual contribution required under the Employee Retirement Income Security Act (“ERISA”) and, generally, not greater than the maximum amount that can be deducted for U.S. federal income tax purposes. We do not anticipate contributions will be needed to satisfy minimum funding requirements of ERISA for our qualified plan in 2026; however, it is possible that we may fund both the qualified and nonqualified pension plans in 2026 for a combined total of up to $ 70.0 million. During the three months ended March 31, 2026, we did no t contribute to these plans. 71 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) 13. Contingencies, Guarantees and Indemnifications Litigation and Regulatory Contingencies We are regularly involved in litigation, both as a defendant and as a plaintiff, but primarily as a defendant. Litigation naming us as a defendant ordinarily arises out of our business operations as a provider of asset management and accumulation products and services, individual life insurance, specialty benefits insurance and our investment activities. Some of the lawsuits may be class actions, or purport to be, and some may include claims for unspecified or substantial punitive and treble damages. We may discuss such litigation in one of three ways. We accrue a charge to income and disclose legal matters for which the chance of loss is probable and for which the amount of loss can be reasonably estimated. We may disclose contingencies for which the chance of loss is reasonably possible and provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. Finally, we may voluntarily disclose loss contingencies for which the chance of loss is remote in order to provide information concerning matters that potentially expose us to possible losses. In addition, regulatory bodies such as state insurance departments, the SEC, the Financial Industry Regulatory Authority (“FINRA”), the Department of Labor (“DOL”) and other regulatory agencies in the U.S. and in international locations in which we do business, regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, ERISA and laws governing the activities of broker-dealers. We receive requests from regulators and other governmental authorities relating to industry issues and may receive additional requests, including subpoenas and interrogatories, in the future. While the outcome of any pending or future litigation or regulatory matter cannot be predicted, management does not believe any such matter will have a material adverse effect on our business or financial position. To the extent such matters present a reasonably possible chance of loss, we are generally not able to estimate the possible loss or range of loss associated therewith. The outcome of such matters is always uncertain and unforeseen results can occur. It is possible that such outcomes could require us to pay damages or make other expenditures or establish accruals in amounts that we could not estimate as of March 31, 2026. Guarantees and Indemnifications In the normal course of business, we have provided guarantees to third parties primarily related to former subsidiaries and joint ventures. The terms of these agreements range in duration and often are not explicitly defined. The maximum exposure under these agreements as of March 31, 2026, was approximately $ 75.0 million. At inception, the fair value of such guarantees was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. Should we be required to perform under these guarantees, we generally could recover a portion of the loss from third parties through recourse provisions included in agreements with such parties, the sale of assets held as collateral that can be liquidated in the event performance is required under the guarantees or other recourse generally available to us; therefore, such guarantees would not result in a material adverse effect on our business or financial position. While the likelihood is remote, such outcomes could materially affect net income in a particular quarter or annual period. Furthermore, in connection with our contingent funding agreements, we are required to purchase any principal and interest strips of U.S. Treasury securities that are due and not paid from the associated unconsolidated trusts. The maximum exposure under these agreements as of March 31, 2026, was $ 850.0 million. We manage mandatory privatized social security funds in Chile. By regulation, we have a required minimum guarantee on the funds’ relative return. Because the guarantee has no limitation with respect to duration or amount, the maximum exposure of the guarantee in the future is indeterminable. We are also subject to various other indemnification obligations issued in conjunction with divestitures, acquisitions, financing and reinsurance transactions whose terms range in duration and often are not explicitly defined. Certain portions of these indemnifications may be capped, while other portions are not subject to such limitations; therefore, the overall maximum amount of the obligation under the indemnifications cannot be reasonably estimated. At inception, the fair value of such indemnifications was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. While we are unable to estimate with certainty the ultimate legal and financial liability with respect to these indemnifications, we believe that performance under these indemnifications would not result in a material adverse effect on our business or financial position. While the likelihood is remote, performance under these indemnifications could materially affect net income in a particular quarter or annual period. 72 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) 14 . Stockholders’ Equity Common Stock Dividends For the three months ended March 31, 2026 2025 Dividends declared per common share $ 0.80 $ 0.75 Reconciliation of Outstanding Common Shares For the three months ended March 31, 2026 2025 Beginning balance 217,380,912 226,225,161 Shares issued 1,623,273 1,635,250 Treasury stock acquired ( 2,554,852 ) ( 2,888,696 ) Ending balance 216,449,333 224,971,715 In February 2024, our Board of Directors (“Board”) authorized a share repurchase program of up to $ 1.5 billion of our outstanding common stock, which was completed in December 2025. In February 2025, our Board authorized a share repurchase program of up to $ 1.5 billion of our outstanding common stock, which has no expiration date. Shares repurchased under these programs are accounted for as treasury stock, carried at cost and reflected as a reduction to stockholders’ equity. Other Comprehensive Income (loss) For the three months ended March 31, 2026 Pre-Tax Tax After-Tax (in millions) Net unrealized losses on available-for-sale securities during the period $ ( 798.2 ) $ 168.8 $ ( 629.4 ) Reclassification adjustment for losses included in net income (1) 51.8 ( 11.0 ) 40.8 Adjustments for assumed changes in amortization patterns 0.6 ( 0.1 ) 0.5 Adjustments for assumed changes in policyholder liabilities 12.1 ( 2.5 ) 9.6 Net unrealized losses on available-for-sale securities ( 733.7 ) 155.2 ( 578.5 ) Net unrealized gains on derivative instruments during the period 68.9 ( 14.5 ) 54.4 Reclassification adjustment for losses included in net income (2) 0.1 — 0.1 Net unrealized gains on derivative instruments 69.0 ( 14.5 ) 54.5 Liability for future policy benefits discount rate remeasurement gain (3) 492.9 ( 103.2 ) 389.7 Market risk benefit nonperformance risk remeasurement gain (4) 3.3 ( 0.7 ) 2.6 Foreign currency translation adjustment during the period ( 19.9 ) ( 8.8 ) ( 28.7 ) Reclassification adjustment for gains included in net income (5) ( 0.3 ) — ( 0.3 ) Foreign currency translation adjustment ( 20.2 ) ( 8.8 ) ( 29.0 ) Unrecognized postretirement benefit obligation during the period ( 5.2 ) 1.3 ( 3.9 ) Amortization of amounts included in net periodic benefit cost (6) 4.8 ( 1.2 ) 3.6 Net unrecognized postretirement benefit obligation ( 0.4 ) 0.1 ( 0.3 ) Other comprehensive loss $ ( 189.1 ) $ 28.1 $ ( 161.0 ) 73 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) For the three months ended March 31, 2025 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ 666.8 $ ( 140.9 ) $ 525.9 Reclassification adjustment for losses included in net income (1) 62.5 ( 13.1 ) 49.4 Adjustments for assumed changes in amortization patterns ( 0.4 ) 0.1 ( 0.3 ) Adjustments for assumed changes in policyholder liabilities 18.3 ( 3.9 ) 14.4 Net unrealized gains on available-for-sale securities 747.2 ( 157.8 ) 589.4 Net unrealized gains on derivative instruments during the period 18.5 ( 3.9 ) 14.6 Reclassification adjustment for gains included in net income (2) ( 0.6 ) 0.1 ( 0.5 ) Net unrealized gains on derivative instruments 17.9 ( 3.8 ) 14.1 Liability for future policy benefits discount rate remeasurement loss (3) ( 312.4 ) 62.6 ( 249.8 ) Market risk benefit nonperformance risk remeasurement gain (4) 2.7 ( 0.6 ) 2.1 Foreign currency translation adjustment 74.1 ( 0.7 ) 73.4 Amortization of amounts included in net periodic benefit cost (6) 3.8 ( 0.9 ) 2.9 Net unrecognized postretirement benefit obligation 3.8 ( 0.9 ) 2.9 Other comprehensive income $ 533.3 $ ( 101.2 ) $ 432.1 (1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) and net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations. (2) See Note 4, Derivative Financial Instruments, under the caption “Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations” for further details. (3) Includes the discount rate remeasurement gain (loss) associated with the LFPB and the associated reinsurance recoverable. See Note 8, Future Policy Benefits and Claims, under the caption “Liability for Future Policy Benefits” for further details. (4) See Note 9, Market Risk Benefits, for further details. (5) Relates to the release of cumulative translation adjustments from the dissolution of foreign subsidiaries. (6) Amount is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of operations. See Note 12, Employee and Agent Benefits, under the caption “Components of Net Periodic Benefit Cost” for further details. 74 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Accumulated Other Comprehensive Loss MRB Net unrealized Net unrealized LFPB nonperformance Foreign Unrecognized Accumulated losses on gains (losses) discount rate risk currency postretirement other available-for-sale on derivative remeasurement remeasurement translation benefit comprehensive securities (1) instruments gain loss adjustment obligation loss (in millions) Balances as of January 1, 2025 $ ( 4,692.9 ) $ 51.8 $ 1,438.2 $ ( 15.0 ) $ ( 1,785.9 ) $ ( 221.0 ) $ ( 5,224.8 ) Other comprehensive income during the period, net of adjustments 540.0 14.6 ( 249.8 ) 2.1 80.2 — 387.1 Amounts reclassified from AOCI 49.4 ( 0.5 ) — — — 2.9 51.8 Other comprehensive income 589.4 14.1 ( 249.8 ) 2.1 80.2 2.9 438.9 Balances as of March 31, 2025 $ ( 4,103.5 ) $ 65.9 $ 1,188.4 $ ( 12.9 ) $ ( 1,705.7 ) $ ( 218.1 ) $ ( 4,785.9 ) Balances as of January 1, 2026 $ ( 3,229.1 ) $ ( 31.9 ) $ 812.5 $ ( 13.4 ) $ ( 1,546.6 ) $ ( 179.9 ) $ ( 4,188.4 ) Other comprehensive loss during the period, net of adjustments ( 619.3 ) 54.4 389.7 2.6 ( 23.0 ) ( 3.9 ) ( 199.5 ) Amounts reclassified from AOCI 40.8 0.1 — — ( 0.3 ) 3.6 44.2 Other comprehensive loss ( 578.5 ) 54.5 389.7 2.6 ( 23.3 ) ( 0.3 ) ( 155.3 ) Balances as of March 31, 2026 $ ( 3,807.6 ) $ 22.6 $ 1,202.2 $ ( 10.8 ) $ ( 1,569.9 ) $ ( 180.2 ) $ ( 4,343.7 ) (1) Net unrealized losses on available-for-sale securities for which an allowance for credit loss has been recorded were $ 11.5 million and $ 4.0 million as of March 31, 2026 and 2025, respectively. Noncontrolling Interest Interests held by unaffiliated parties in consolidated entities are reflected in noncontrolling interest, which represents the noncontrolling partners’ share of the underlying net assets of our consolidated subsidiaries. Noncontrolling interest that is not redeemable is reported in the equity section of the consolidated statements of financial position. The noncontrolling interest holders in certain of our consolidated entities maintain an equity interest that is redeemable at the option of the holder, which may be exercised on varying dates. Since redemption of the noncontrolling interest is outside of our control, this interest is excluded from stockholders’ equity and reported separately as redeemable noncontrolling interest on the consolidated statements of financial position. Our redeemable noncontrolling interest primarily relates to consolidated sponsored investment funds for which interests are redeemed at fair value from the net assets of the funds. 75 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) For our redeemable noncontrolling interest related to other consolidated subsidiaries, redemptions are required to be purchased at fair value or a value based on a formula that management intended to reasonably approximate fair value based on a fixed multiple of earnings over a measurement period. The carrying value of the redeemable noncontrolling interest is compared to the redemption value at each reporting period. Any adjustments to the carrying amount of the redeemable noncontrolling interest for changes in redemption value prior to exercise of the redemption option are determined after the attribution of net income or loss of the subsidiary and are recognized in the redemption value as they occur. Adjustments to the carrying value of redeemable noncontrolling interest result in adjustments to additional paid-in capital and/or retained earnings. Adjustments are recorded in retained earnings to the extent the redemption value of the redeemable noncontrolling interest exceeds its fair value and will impact the numerator in our earnings per share calculations. All other adjustments to the redeemable noncontrolling interest are recorded in additional paid-in capital. Following is a reconciliation of the changes in the redeemable noncontrolling interest: For the three months ended March 31, 2026 2025 (in millions) Beginning balance $ 474.3 $ 337.7 Net income (loss) attributable to redeemable noncontrolling interest ( 12.1 ) 11.5 Redeemable noncontrolling interest of deconsolidated entities (1) ( 7.3 ) ( 12.5 ) Contributions from redeemable noncontrolling interest 126.1 30.8 Distributions to redeemable noncontrolling interest ( 30.9 ) ( 31.8 ) Purchase of subsidiary shares from redeemable noncontrolling interest ( 0.9 ) ( 1.6 ) Other comprehensive loss attributable to redeemable noncontrolling interest ( 5.1 ) ( 7.4 ) Ending balance $ 544.1 $ 326.7 (1) We deconsolidated certain sponsored investment funds as they no longer met the requirements for consolidation. 15. Fair Value Measurements We use fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, particularly policyholder liabilities other than investment contracts, are excluded from these fair value disclosure requirements. Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety considering factors specific to the asset or liability. ● Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3 – Fair values are based on at least one significant unobservable input for the asset or liability. Determination of Fair Value The following discussion describes the valuation methodologies and inputs used for assets and liabilities measured at fair value on a recurring basis. The techniques utilized in estimating the fair value of financial instruments are reliant on the assumptions used. Care should be exercised in deriving conclusions about our business, its value or financial position based on the fair value information of financial instruments presented below. 76 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Fair value estimates are made based on available market information and judgments about the financial instrument at a specific point in time. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. We validate prices through an investment analyst review process, which includes validation through direct interaction with external sources, review of recent trade activity or use of internal models. In circumstances where broker quotes are used to value an instrument, we generally receive one non-binding quote. Broker quotes are validated through an investment analyst review process, which includes validation through direct interaction with external sources and use of internal models or other relevant information. We did not make any significant changes to our valuation processes during 2026. Fixed Maturities Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities. When available, the fair value of fixed maturities is based on quoted prices of identical assets in active markets. These are reflected in Level 1 and primarily include U.S. Treasury bonds and actively traded redeemable corporate preferred securities. When quoted prices of identical assets in active markets are not available, our first priority is to obtain prices from third party pricing vendors. We have regular interaction with these vendors to ensure we understand their pricing methodologies and to confirm they are utilizing observable market information. Their methodologies vary by asset class and include inputs such as estimated cash flows, benchmark yields, reported trades, broker quotes, credit quality, industry events and economic events. Fixed maturities with validated prices from pricing services, which includes the majority of our public fixed maturities in all asset classes, are generally reflected in Level 2. Also included in Level 2 are corporate bonds when quoted market prices are not available, for which an internal model using substantially all observable inputs or a matrix pricing valuation approach is used. In the matrix approach, securities are grouped into pricing categories that vary by sector, rating and average life. Each pricing category is assigned a risk spread based on studies of observable public market data for specific security classes. The expected cash flows of the security are then discounted back at the current Treasury curve plus the appropriate risk spread. Although the matrix valuation approach provides a fair valuation of each pricing category, the valuation of an individual security within each pricing category may also be impacted by company specific factors. If we are unable to price a fixed maturity security using prices from third party pricing vendors or other sources specific to the asset class, we may obtain a broker quote or utilize an internal pricing model specific to the asset utilizing relevant market information, to the extent available and where at least one significant unobservable input is utilized. These are reflected in Level 3 in the fair value hierarchy and can include fixed maturities across all asset classes. As of March 31, 2026, approximately 2 % of our total fixed maturities were Level 3 securities valued using internal pricing models. The primary inputs, by asset class, for valuations of the majority of our Level 2 investments from third party pricing vendors or our internal pricing valuation approach are described below. U.S. Government and Agencies/Non-U.S. Governments . Inputs include recently executed market transactions, interest rate yield curves, maturity dates, market price quotations and credit spreads relating to similar instruments. States and Political Subdivisions . Inputs include Municipal Securities Rulemaking Board reported trades, U.S. Treasury and other benchmark curves, material event notices, new issue data and obligor credit ratings. Corporate . Inputs include recently executed transactions, market price quotations, benchmark yields, issuer spreads and observations of equity and credit default swap curves related to the issuer. For private placement corporate securities valued through the matrix valuation approach inputs include the current Treasury curve and risk spreads based on sector, rating and average life of the issuance. RMBS, CMBS, Collateralized Debt Obligations and Other Debt Obligations . Inputs include cash flows, priority of the tranche in the capital structure, expected time to maturity for the specific tranche, reinvestment period remaining and performance of the underlying collateral including prepayments, defaults, deferrals, loss severity of defaulted collateral and, for RMBS, prepayment speed assumptions. Other inputs include market indices and recently executed market transactions. 77 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Equity Securities Equity securities include mutual funds, common stock, non-redeemable preferred stock and required regulatory investments. Fair values of equity securities are determined using quoted prices in active markets for identical assets when available, which are reflected in Level 1. When quoted prices are not available, we may utilize internal valuation methodologies appropriate for the specific asset that use observable inputs such as underlying share prices or the NAV, which are reflected in Level 2. Fair values might also be determined using broker quotes or through the use of internal models or analysis that incorporate significant assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities, which are reflected in Level 3. Mortgage Loans Mortgage loans reported at fair value included those of a consolidated VIE for which the fair value option was elected. Fair values of commercial mortgage loans were primarily determined by discounting the expected cash flows at current treasury rates plus an applicable risk spread, which reflected credit quality and maturity of the loans. The risk spread was based on market clearing levels for loans with comparable credit quality, maturities and risk. These were reflected in Level 3. Mortgage loans valued using securitized pricing based on observable market data should be reflected in Level 2 of the fair value hierarchy. The consolidated VIE was deconsolidated during 2025. Derivatives The fair values of exchange-traded derivatives are determined through quoted market prices, which are reflected in Level 1. Exchange-traded derivatives include futures that are settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of OTC cleared derivatives are determined through market prices published by the clearinghouses, which are reflected in Level 2. The clearinghouses utilize the secured overnight financing rate (“SOFR”) curve in their valuation. Variation margin associated with OTC cleared derivatives is settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of bilateral OTC derivative instruments are determined using either pricing valuation models that utilize market observable inputs or broker quotes. The majority of our bilateral OTC derivatives are valued with models that use market observable inputs, which are reflected in Level 2. Significant inputs include contractual terms, interest rates, currency exchange rates, credit spread curves, equity prices and volatilities. These valuation models consider projected discounted cash flows, relevant swap curves and appropriate implied volatilities. Certain bilateral OTC derivatives utilize unobservable market data, primarily independent broker quotes that are nonbinding quotes based on models that do not reflect the result of market transactions, which are reflected in Level 3. Our non-cleared derivative contracts are generally documented under ISDA Master Agreements, which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Collateral arrangements are bilateral and based on current ratings of each entity. We utilize the SOFR curve to value our positions. Counterparty credit risk is routinely monitored to ensure our adjustment for nonperformance risk is appropriate. Our centrally cleared derivative contracts are conducted with regulated centralized clearinghouses, which provide for daily exchange of cash collateral or variation margin equal to the difference in the daily market values of those contracts that eliminates the nonperformance risk on these trades. Interest Rate Contracts. For non-cleared contracts, which include interest rate swaps and interest rate options, we use discounted cash flow valuation techniques to determine the fair value using observable swap curves as the inputs. These are reflected in Level 2. We have forward contracts for which we obtain prices from third party pricing vendors. These are reflected in Level 2. For centrally cleared contracts we use published prices from clearinghouses. These are reflected in Level 2. In addition, we had forward contracts that were valued using broker quotes. These were reflected in Level 3. Foreign Exchange Contracts. We use discounted cash flow valuation techniques that utilize observable swap curves and exchange rates as the inputs to determine the fair value of foreign currency swaps. These are reflected in Level 2. Currency forwards are valued using observable market inputs, including forward currency exchange rates. These are reflected in Level 2. 78 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Equity Contracts. We use an option pricing model using observable implied volatilities, dividend yields, index prices and swap curves as the inputs to determine the fair value of equity options. Certain total return swaps use an accrual method comparing both cash flows to determine fair value. These are reflected in Level 2. Certain equity option contracts are valued using broker quotes. These are reflected in Level 3. Credit Contracts. We use either the ISDA Credit Default Swap Standard discounted cash flow model that utilizes observable default probabilities and recovery rates as inputs to determine the fair value of credit default swaps. These are reflected in Level 2. In addition, we have total return swaps and a limited number of credit default swaps that are valued using broker quotes. These are reflected within Level 3. Other Investments Other investments reported at fair value include invested assets of consolidated sponsored investment funds, unconsolidated sponsored investment funds, other investment funds reported at fair value, other loans of a consolidated VIE for which the fair value option was elected and certain redeemable and nonredeemable preferred stock. Invested assets of consolidated sponsored investment funds include equity securities, fixed maturities and derivative assets, for which fair values are determined as previously described, and are reflected in Level 1 and Level 2. The fair value of unconsolidated sponsored investment funds and other investment funds is determined using the NAV of the fund. The NAV of the fund represents the price at which we would be able to initiate a transaction. Investments for which the NAV represents a quoted price in an active market for identical assets are reflected in Level 1. Investments that do not have a quoted price in an active market are reflected in Level 2. Other loans of a consolidated VIE for which the fair value option was elected are reflected in Level 3. The fair value of these loans is estimated using a discounted cash flow valuation model that utilizes standard assumption-setting methodology accepted by market participants in the industry. The assumptions are formed based on historical performance of the loans and utilizes market data inputs such as charge-off rates, prepayment rates, recovery rates and discount rates. Cash Equivalents Certain cash equivalents are reported at fair value on a recurring basis and include money market instruments and other short-term investments with maturities of three months or less. Fair values of these cash equivalents may be determined using public quotations, when available, which are reflected in Level 1. When public quotations are not available, because of the highly liquid nature of these assets, carrying amounts may be used to approximate fair values, which are reflected in Level 2. Separate Account Assets Separate account assets include equity securities, debt securities, cash equivalents and derivative instruments, for which fair values are determined as previously described, and are reflected in Level 1, Level 2 and Level 3. Separate account assets also include commercial mortgage loans, for which the fair value is estimated by discounting the expected total cash flows using market rates that are applicable to the yield, credit quality and maturity of the loans. The market clearing spreads vary based on mortgage type, weighted average life, rating and liquidity. These are reflected in Level 3. Finally, separate account assets include real estate, for which the fair value is estimated using discounted cash flow valuation models that utilize various public real estate market data inputs. In addition, each property is appraised annually by an independent appraiser. The real estate included in separate account assets is recorded net of related mortgage encumbrances for which the fair value is estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. The real estate within the separate accounts is reflected in Level 3. 79 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Market Risk Benefits MRBs are measured at fair value at the contract level on a recurring basis and are reflected in Level 3 as either an asset or a liability, depending on certain inputs at the reporting date. The key assumptions for calculating the fair value are market assumptions and policyholder behavior. Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The MRBs are valued using stochastic models that incorporate a spread reflecting our own nonperformance risk. The assumption for our own nonperformance risk is based on current market credit spreads for debt-like instruments we have issued and are available in the market. Refer to Note 9, Market Risk Benefits, for further information on the determination of fair value measurement of MRBs. Investment and Universal Life Contracts Certain universal life, annuity and other investment contracts include embedded derivatives that have been bifurcated from the host contract and are measured at fair value on a recurring basis, which are reflected in Level 3. The key assumptions for calculating the fair value of the embedded derivative liabilities are market assumptions (such as equity market returns, interest rate levels, market volatility and correlations) and policyholder behavior assumptions (such as lapse and mortality). Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The embedded derivative liabilities are valued using models that incorporate a spread reflecting our own creditworthiness. The assumption for our own nonperformance risk for investment contracts and any embedded derivatives bifurcated from certain universal life, annuity and investment contracts is based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Funds Withheld Payable The funds withheld payable includes an embedded derivative that has been bifurcated from the host contract and is measured at fair value on a recurring basis, which is reflected in Level 3. The fair value is determined based on the change in the estimated fair value of the underlying funds withheld investments. The fair value of these assets is determined as previously described. Long-Term Debt Long-term debt reported at fair value included that of a consolidated VIE for which the fair value option was elected. The long-term debt was a secured credit facility that was primarily financing for commercial real estate loans. The fair value was estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. These were reflected in Level 2. The consolidated VIE was deconsolidated during 2025. Other Liabilities Derivative liabilities of consolidated sponsored investment funds are reported at fair value within other liabilities. Fair values of these derivatives are determined as previously described and are reflected in Level 1 and Level 2. 80 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis were as follows: March 31, 2026 Assets/ Amount (liabilities) measured at measured at net asset Fair value hierarchy level fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,860.2 $ — $ 1,529.1 $ 331.1 $ — Non-U.S. governments 430.5 — — 430.5 — States and political subdivisions 7,364.7 — — 7,296.5 68.2 Corporate 37,147.6 — 26.2 34,572.3 2,549.1 Residential mortgage-backed pass-through securities 3,751.3 — — 3,751.3 — Commercial mortgage-backed securities 5,582.9 — — 5,580.6 2.3 Collateralized debt obligations (1) 5,991.6 — — 5,991.6 — Other debt obligations 10,781.2 — — 9,008.5 1,772.7 Total fixed maturities, available-for-sale 72,910.0 — 1,555.3 66,962.4 4,392.3 Fixed maturities, trading 1,268.7 — 0.1 771.6 497.0 Equity securities 2,341.9 — 915.7 1,426.2 — Derivative assets (2) 1,249.6 — — 1,235.7 13.9 Other investments 1,121.3 103.0 331.6 561.4 125.3 Cash equivalents 2,316.0 — 80.7 2,235.3 — Market risk benefit asset (3) 163.7 — — — 163.7 Sub-total excluding separate account assets 81,371.2 103.0 2,883.4 73,192.6 5,192.2 Separate account assets 185,788.4 7,617.4 117,267.1 60,143.3 760.6 Total assets $ 267,159.6 $ 7,720.4 $ 120,150.5 $ 133,335.9 $ 5,952.8 Liabilities Investment and universal life contracts (4) $ ( 1,357.7 ) $ — $ — $ — $ ( 1,357.7 ) Market risk benefit liability (3) ( 81.4 ) — — — ( 81.4 ) Funds withheld payable embedded derivative (4) 2,810.8 — — — 2,810.8 Derivative liabilities (2) ( 535.8 ) — ( 0.1 ) ( 520.1 ) ( 15.6 ) Other liabilities ( 4.1 ) — — ( 4.1 ) — Total liabilities $ 831.8 $ — $ ( 0.1 ) $ ( 524.2 ) $ 1,356.1 Net assets $ 267,991.4 $ 7,720.4 $ 120,150.4 $ 132,811.7 $ 7,308.9 81 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) December 31, 2025 Assets/ Amount (liabilities) measured at measured at net asset Fair value hierarchy level fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,867.6 $ — $ 1,515.2 $ 352.4 $ — Non-U.S. governments 517.7 — — 517.7 — States and political subdivisions 7,138.7 — — 7,070.3 68.4 Corporate 37,547.5 — 27.8 35,042.0 2,477.7 Residential mortgage-backed pass-through securities 3,805.1 — — 3,805.1 — Commercial mortgage-backed securities 5,371.6 — — 5,369.2 2.4 Collateralized debt obligations (1) 6,422.3 — — 6,422.3 — Other debt obligations 10,690.2 — — 8,934.5 1,755.7 Total fixed maturities, available-for-sale 73,360.7 — 1,543.0 67,513.5 4,304.2 Fixed maturities, trading 1,243.8 — 0.1 786.3 457.4 Equity securities 2,237.3 — 778.6 1,458.7 — Derivative assets (2) 1,224.5 — — 1,199.8 24.7 Other investments 1,112.0 106.4 332.8 505.6 167.2 Cash equivalents 3,236.1 — 183.7 3,052.4 — Market risk benefit asset (3) 197.1 — — — 197.1 Sub-total excluding separate account assets 82,611.5 106.4 2,838.2 74,516.3 5,150.6 Separate account assets 193,622.6 7,613.8 121,376.6 63,889.7 742.5 Total assets $ 276,234.1 $ 7,720.2 $ 124,214.8 $ 138,406.0 $ 5,893.1 Liabilities Investment and universal life contracts (4) $ ( 1,410.2 ) $ — $ — $ — $ ( 1,410.2 ) Market risk benefit liability (3) ( 66.9 ) — — — ( 66.9 ) Funds withheld payable embedded derivative (4) 2,633.4 — — — 2,633.4 Derivative liabilities (2) ( 552.1 ) — — ( 545.3 ) ( 6.8 ) Other liabilities ( 1.3 ) — — ( 1.3 ) — Total liabilities $ 602.9 $ — $ — $ ( 546.6 ) $ 1,149.5 Net assets $ 276,837.0 $ 7,720.2 $ 124,214.8 $ 137,859.4 $ 7,042.6 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. (2) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes in Level 3 Fair Value Measurements tables. Refer to Note 4, Derivative Financial Instruments, for further information on fair value by class of derivative instruments. (3) Refer to Note 9, Market Risk Benefits, for further information on the change in the Level 3 fair value measurements of MRBs. (4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. The funds withheld payable embedded derivative could be in either an asset or (liability) position. (5) Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $ 2.9 million and $ 2.9 million as of March 31, 2026 and December 31, 2025, respectively. Separate account assets using the NAV practical expedient consist of certain funds with varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these funds. 82 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Changes in Level 3 Fair Value Measurements The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows: For the three months ended March 31, 2026 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included in other and Transfers Transfers as of January 1, net income comprehensive settlements into out of March 31, 2026 (2) income (3) (4) Level 3 Level 3 2026 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 68.4 $ — $ 0.3 $ ( 0.5 ) $ — $ — $ 68.2 Corporate 2,477.7 ( 30.2 ) 5.3 96.3 — — 2,549.1 Commercial mortgage-backed securities 2.4 — — ( 0.1 ) — — 2.3 Other debt obligations 1,755.7 ( 2.1 ) ( 10.0 ) ( 18.7 ) 52.6 ( 4.8 ) 1,772.7 Total fixed maturities, available-for-sale 4,304.2 ( 32.3 ) ( 4.4 ) 77.0 52.6 ( 4.8 ) 4,392.3 Fixed maturities, trading 457.4 ( 5.3 ) — 44.9 — — 497.0 Other investments 167.2 ( 3.8 ) — ( 38.1 ) — — 125.3 Separate account assets (1) 742.5 18.1 — — — — 760.6 Liabilities Investment and universal life contracts ( 1,410.2 ) 145.1 — ( 92.6 ) — — ( 1,357.7 ) Funds withheld payable embedded derivative 2,633.4 177.4 — — — — 2,810.8 Derivatives Net derivative assets (liabilities) 17.9 ( 20.0 ) — 0.4 — — ( 1.7 ) 83 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) For the three months ended March 31, 2025 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included in other and Transfers Transfers as of January 1, net income comprehensive settlements into out of March 31, 2025 (2) income (3) (4) Level 3 Level 3 2025 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 66.8 $ — $ 2.3 $ ( 0.5 ) $ — $ — $ 68.6 Corporate 2,350.4 2.9 ( 5.2 ) 71.2 — — 2,419.3 Commercial mortgage-backed securities 2.7 — 0.1 ( 0.2 ) — — 2.6 Other debt obligations 1,478.3 0.1 2.9 3.2 — ( 24.8 ) 1,459.7 Total fixed maturities, available-for-sale 3,898.2 3.0 0.1 73.7 — ( 24.8 ) 3,950.2 Fixed maturities, trading 562.6 ( 0.7 ) — 14.0 — ( 4.8 ) 571.1 Mortgage loans 140.6 — — ( 140.6 ) — — — Other investments 131.2 2.7 — ( 15.3 ) — — 118.6 Separate account assets (1) 726.7 11.5 — — — — 738.2 Liabilities Investment and universal life contracts ( 578.4 ) 193.4 — ( 137.7 ) — — ( 522.7 ) Funds withheld payable embedded derivative 3,014.5 ( 209.7 ) — — — — 2,804.8 Derivatives Net derivative assets (liabilities) 13.5 ( 16.7 ) — 1.3 — 0.1 ( 1.8 ) (1) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. Foreign currency translation adjustments related to the Principal Asset Management separate account assets are recorded in AOCI and are offset by foreign currency translation adjustments of the corresponding separate account liabilities. 84 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) (2) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses), net realized capital gains (losses) on funds withheld assets or change in fair value of funds withheld embedded derivative within the consolidated statements of operations. Realized and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market changes are reported in net investment income within the consolidated statements of operations. Changes in unrealized gains (losses) included in net income relating to positions still held were: For the three months ended March 31, 2026 2025 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ ( 30.3 ) $ 6.4 Other debt obligations ( 2.1 ) — Total fixed maturities, available-for-sale ( 32.4 ) 6.4 Fixed maturities, trading ( 5.3 ) ( 0.2 ) Other investments ( 0.6 ) 4.6 Separate account assets 18.1 ( 6.6 ) Liabilities Investment and universal life contracts 145.5 193.6 Funds withheld payable embedded derivative 177.4 ( 209.7 ) Derivatives Net derivative assets (liabilities) ( 23.4 ) ( 18.5 ) (3) Changes in unrealized gains (losses) included in OCI, including foreign currency translation adjustments related to Principal Asset Management, relating to positions still held were: For the three months ended March 31, 2026 2025 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 0.3 $ 2.3 Corporate 5.9 ( 5.2 ) Commercial mortgage-backed securities — 0.1 Other debt obligations ( 10.0 ) 3.1 Total fixed maturities, available-for-sale ( 3.8 ) 0.3 85 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) (4) Gross purchases, sales, issuances and settlements were: For the three months ended March 31, 2026 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ ( 0.5 ) $ ( 0.5 ) Corporate 253.5 ( 25.9 ) — ( 131.3 ) 96.3 Commercial mortgage-backed securities — — — ( 0.1 ) ( 0.1 ) Other debt obligations 109.2 — — ( 127.9 ) ( 18.7 ) Total fixed maturities, available-for-sale 362.7 ( 25.9 ) — ( 259.8 ) 77.0 Fixed maturities, trading 86.0 ( 37.1 ) — ( 4.0 ) 44.9 Other investments 10.3 — — ( 48.4 ) ( 38.1 ) Liabilities Investment and universal life contracts — — ( 109.8 ) 17.2 ( 92.6 ) Derivatives Net derivative assets (liabilities) 0.2 0.2 — — 0.4 For the three months ended March 31, 2025 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ ( 0.5 ) $ ( 0.5 ) Corporate 235.2 ( 130.0 ) — ( 34.0 ) 71.2 Commercial mortgage-backed securities — — — ( 0.2 ) ( 0.2 ) Other debt obligations 224.7 ( 177.7 ) — ( 43.8 ) 3.2 Total fixed maturities, available-for-sale 459.9 ( 307.7 ) — ( 78.5 ) 73.7 Fixed maturities, trading 64.3 ( 44.8 ) — ( 5.5 ) 14.0 Mortgage loans — — — ( 140.6 ) ( 140.6 ) Other investments 21.3 ( 1.5 ) — ( 35.1 ) ( 15.3 ) Liabilities Investment and universal life contracts — — ( 153.9 ) 16.2 ( 137.7 ) Derivatives Net derivative assets (liabilities) 0.7 0.6 — — 1.3 86 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Transfers Transfers of assets and liabilities measured at fair value on a recurring basis between fair value hierarchy levels were as follows: For the three months ended March 31, 2026 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Other debt obligations $ — $ 52.6 $ — $ 4.8 Total fixed maturities, available-for-sale — 52.6 — 4.8 For the three months ended March 31, 2025 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Other debt obligations $ — $ — $ — $ 24.8 Total fixed maturities, available-for-sale — — — 24.8 Fixed maturities, trading — — — 4.8 Derivatives Net derivative assets (liabilities) — — — 0.1 Assets transferred into Level 3 during 2026 and 2025 primarily included those assets for which we are now unable to obtain pricing from a recognized third party pricing vendor as well as assets that were previously priced using a matrix valuation approach that may no longer be relevant when applied to asset-specific situations. Assets transferred out of Level 3 during 2026 and 2025 primarily included those assets for which we are now able to obtain pricing from a recognized third party pricing vendor or from internal models using substantially all market observable information. Quantitative Information about Level 3 Fair Value Measurements The following table provides quantitative information about the significant unobservable inputs used for recurring fair value measurements categorized within Level 3, excluding assets and liabilities for which significant quantitative unobservable inputs are not developed internally, which primarily consists of those valued using broker quotes. The MRB asset and liability are excluded from the table. Refer to Note 9, Market Risk Benefits, for information on the unobservable inputs used for fair value measurement of MRBs. The funds withheld payable embedded derivative is excluded from the table as the determination of its fair value incorporates the fair value of the invested assets supporting the reinsurance agreement. The commercial mortgage loans of a consolidated VIE are excluded from the table as the determination of fair value was based on transaction price due to proximity of purchase to year-end, and thus no inputs to be provided. Refer to “Assets and liabilities measured at fair value on a recurring basis” for a complete valuation hierarchy summary. 87 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) March 31, 2026 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 2,044.1 Discounted cash flow Discount rate (1) 3.5 % - 12.8 % 8.0 % Earnings before interest, taxes, depreciation and amortization multiple 0.9 x 2.1 x 1.3 x Illiquidity premium 30 basis points (“bps”) - 771 bps 145 bps Comparability adjustment ( 92 ) bps - 4,473 bps 150 bps Other debt obligations 1,649.4 Discounted cash flow Discount rate (1) 3.6 % - 8.7 % 4.4 % Illiquidity premium ( 83 ) bps - 415 bps 149 bps Comparability adjustment ( 11 ) bps - 368 bps 68 bps Fixed maturities, trading 276.3 Discounted cash flow Discount rate (1) 8.6 % - 13.0 % 8.9 % Earnings before interest, taxes, depreciation and amortization multiple 0.9 x 0.9 x Comparability adjustment ( 93 ) bps - 4,473 bps 141 bps Other investments 125.3 Discounted cash flow Discount rate (1) 12.0 % - 13.5 % 12.4 % Probability of default 6.0 % - 10.0 % 8.4 % Potential loss severity 87.0 % - 100.0 % 91.8 % Separate account assets 760.6 Discounted cash flow - real estate Discount rate (1) 6.8 % - 9.3 % 7.3 % Terminal capitalization rate 5.5 % - 8.0 % 6.0 % Average market rent growth rate 2.0 % - 3.3 % 2.7 % Discounted cash flow - real estate debt Loan to value 47.1 % - 69.3 % 52.7 % Market interest rate 5.3 % - 6.4 % 5.7 % Liabilities Investment and universal life contracts (4) ( 1,357.7 ) Discounted cash flow Long duration interest rate 3.7 % - 4.9 % (2) 4.9 % Long-term equity market volatility 17.6 % - 65.0 % 25.3 % Nonperformance risk 0.6 % - 1.2 % 1.0 % Lapse rate 0.0 % - 55.0 % 8.3 % Mortality rate See note (3) 88 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) December 31, 2025 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 2,017.3 Discounted cash flow Discount rate (1) 2.7 % - 13.1 % 8.0 % Earnings before interest, taxes, depreciation and amortization multiple 0.9 x 0.9 x Illiquidity premium 30 bps - 771 bps 146 bps Comparability adjustment ( 120 ) bps - 3,462 bps 122 bps Other debt obligations 1,745.4 Discounted cash flow Discount rate (1) 3.4 % - 8.6 % 4.2 % Illiquidity premium ( 83 ) bps - 415 bps 179 bps Comparability adjustment ( 10 ) bps - 285 bps 66 bps Fixed maturities, trading 257.6 Discounted cash flow Discount rate (1) 8.5 % - 13.0 % 9.0 % Earnings before interest, taxes, depreciation and amortization multiple 0.9 x 0.9 x Comparability adjustment ( 88 ) bps - 2,047 bps 114 bps Other investments 167.1 Discounted cash flow Discount rate (1) 12.0 % - 13.5 % 12.2 % Probability of default 6.0 % - 10.0 % 8.0 % Potential loss severity 87.0 % - 100.0 % 92.9 % Separate account assets 742.5 Discounted cash flow - real estate Discount rate (1) 6.8 % - 9.3 % 7.3 % Terminal capitalization rate 5.5 % - 8.0 % 6.0 % Average market rent growth rate 2.0 % - 3.3 % 2.7 % Discounted cash flow - real estate debt Loan to value 47.2 % - 69.3 % 52.7 % Market interest rate 5.3 % - 6.4 % 5.8 % Liabilities Investment and universal life contracts (4) ( 1,410.2 ) Discounted cash flow Long duration interest rate 3.5 % - 4.8 % (2) 4.8 % Long-term equity market volatility 16.1 % - 33.4 % 21.8 % Nonperformance risk 0.5 % - 1.1 % 0.9 % Lapse rate 0.0 % - 55.0 % 8.0 % Mortality rate See note (3) (1) Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any illiquidity or other adjustments, where applicable. (2) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. Derived from interpolation between various observable swap rates. (3) This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation. (4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. 89 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Market comparable discount rates are used as the base rate in the discounted cash flows used to determine the fair value of certain assets. The use of a higher or lower discount rate would have caused the fair value of the assets to significantly decrease or increase, respectively. Additionally, we may adjust the base discount rate or the modeled price by applying an illiquidity premium given the highly structured nature of certain assets. The use of a higher or lower illiquidity premium would have caused significant decreases or increases, respectively, in the fair value of the asset. Embedded derivatives within our investment and universal life contracts liability can be in either an asset or liability position, depending on certain inputs at the reporting date. Increases to an asset or decreases to a liability are described as increases to fair value. The use of a higher or lower market volatility would have caused significant decreases or increases, respectively, in the fair value of embedded derivatives in investment and universal life contracts. Long duration interest rates are used as the mean return when projecting the growth in the value of associated account value and impact the discount rate used in the discounted future cash flows valuation. The use of higher or lower risk-free rates would have caused the fair value of the embedded derivative to significantly increase or decrease, respectively. The use of a higher or lower rate for our own credit risks, which impact the rates used to discount future cash flows, would have significantly increased or decreased, respectively, the fair value of the embedded derivative. The use of a lower or higher mortality rate assumption would have caused the fair value of the embedded derivative to decrease or increase, respectively. The use of a lower or higher overall lapse rate assumption would have caused the fair value of the embedded derivative to decrease or increase, respectively. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis No significant assets and liabilities were measured at fair value on a nonrecurring basis for the three months ended March 31, 2026 and 2025. Fair Value Option We elected fair value accounting for: ● Certain other loans of a consolidated VIE that were subject to amortized cost accounting and a valuation allowance so that credit losses are recognized within the changes in fair value in the consolidated statements of operations. The following table presents information regarding the assets and liabilities for which the fair value option was elected. March 31, 2026 December 31, 2025 (in millions) Other loans of consolidated VIE (1) Fair value (1) $ 125.2 $ 167.1 Aggregate contractual principal 135.6 175.8 (1) Reported with other investments on the consolidated statements of financial position. See Note 3, Investments, for additional information relating to other loans more than 90 days past due or in non-accrual status. 90 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) The following table presents information regarding the consolidated statements of operations impact of assets for which the fair value option was elected. For the three months ended March 31, 2026 2025 (in millions) Other loans of consolidated VIE Change in fair value pre-tax gain (loss) - instrument specific credit risk $ ( 3.7 ) $ 1.6 Change in fair value pre-tax gain (loss) (1) ( 3.7 ) 1.6 Interest income (expense) (2) 6.1 4.2 (1) Reported in net realized capital gains (losses) on the consolidated statements of operations. (2) Reported in net investment income on the consolidated statements of operations and recorded based on the effective interest rate of the loans. Financial Instruments Not Reported at Fair Value The carrying value and estimated fair value of financial instruments not recorded at fair value on a recurring basis but required to be disclosed at fair value were as follows: March 31, 2026 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 21,128.0 $ 19,814.6 $ — $ — $ 19,814.6 Policy loans 873.1 905.1 — — 905.1 Other investments 258.3 241.6 — 74.3 167.3 Cash and cash equivalents 1,738.0 1,738.0 1,723.3 14.7 — Reinsurance deposit receivable 3,886.3 3,625.9 — — 3,625.9 Cash collateral receivable 1.3 1.3 1.3 — — Investment contracts ( 34,423.1 ) ( 33,788.1 ) — ( 8,293.4 ) ( 25,494.7 ) Short-term debt ( 18.2 ) ( 18.2 ) — ( 18.2 ) — Long-term debt ( 3,927.7 ) ( 3,760.0 ) — ( 3,757.4 ) ( 2.6 ) Separate account liabilities ( 171,544.0 ) ( 130,542.5 ) — — ( 130,542.5 ) Bank deposits (1) ( 407.6 ) ( 410.9 ) — ( 410.9 ) — Cash collateral payable ( 845.6 ) ( 845.6 ) ( 845.6 ) — — 91 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) December 31, 2025 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 21,008.3 $ 19,800.9 $ — $ — $ 19,800.9 Policy loans 866.7 906.0 — — 906.0 Other investments 265.7 255.4 — 77.6 177.8 Cash and cash equivalents 1,194.9 1,194.9 1,181.0 13.9 — Reinsurance deposit receivable 4,076.2 3,825.7 — — 3,825.7 Cash collateral receivable 5.4 5.4 5.4 — — Investment contracts ( 34,139.0 ) ( 33,655.5 ) — ( 8,200.1 ) ( 25,455.4 ) Short-term debt ( 27.7 ) ( 27.7 ) — ( 27.7 ) — Long-term debt ( 3,926.3 ) ( 3,833.5 ) — ( 3,830.9 ) ( 2.6 ) Separate account liabilities ( 178,620.2 ) ( 177,621.6 ) — — ( 177,621.6 ) Bank deposits (1) ( 423.8 ) ( 427.8 ) — ( 427.8 ) — Cash collateral payable ( 857.6 ) ( 857.6 ) ( 857.6 ) — — (1) Excludes deposit liabilities without defined or contractual maturities. 16. Segment Information We provide financial products and services through the following segments: Retirement and Income Solutions, Principal Asset Management and Benefits and Protection. In addition, we have a Corporate segment. The segments are managed and reported separately because they provide different products and services, have different strategies or have different markets and distribution channels. The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The segment includes workplace savings and retirement solutions, banking, trust and custodial services, individual variable annuities (including RILAs), pension risk transfer, investment only and our exited retail fixed annuities business. The Principal Asset Management segment provides global investment solutions to institutional, retirement, retail and high net worth investors in the U.S. and select emerging markets. The segment is organized into Investment Management, which provides public, multi-asset and private market capabilities across all asset classes, including equity, fixed income, real estate and alternatives, to serve a breadth of client investment objectives; and International Pension, which provides long-term savings and retirement solutions through pension accumulation and income annuities in Asia and Latin America. The Benefits and Protection segment focuses on solutions primarily for small-to-mid sized businesses and their employees. The segment is organized into Specialty Benefits, which provides group dental, group life insurance, group disability insurance (including short-term disability, long-term disability and paid family and medical leave), supplemental health products (including vision, critical illness, accident and hospital indemnity) and individual disability insurance; and Life Insurance, which provides life insurance focused on the business market customer, including universal life and variable universal life (including indexed universal life) and traditional life insurance (including term life insurance). All remaining customers are part of the legacy life block of business, including universal and variable universal life insurance (including indexed universal life), traditional life insurance (including participating whole life, adjustable life products and term life insurance) and our exited ULSG business. 92 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Our Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including financing costs), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of our affiliated distribution businesses and our exited group medical and long-term care insurance businesses are reported in this segment. Affiliated distribution includes our retail broker-dealer and registered investment advisor (“RIA”). Our chief operating decision maker (“CODM”) is our chief executive officer. Our CODM and management team, use segment pre-tax operating earnings in evaluating performance, which is consistent with the financial results provided to and discussed with securities analysts. In addition, the financial information provided to our CODM is used in making decisions about the allocation of resources and determining annual incentive compensation paid to our employees. We determine segment pre-tax operating earnings by adjusting U.S. GAAP income before income taxes for pre-tax net realized capital gains (losses), as adjusted, pre-tax income (loss) from exited business, pre-tax other adjustments that management believes are not indicative of overall operating trends and certain adjustments related to equity method investments and noncontrolling interest. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of pre-tax operating earnings enhances the understanding of our results of operations by highlighting pre-tax earnings attributable to the normal, ongoing operations of the business. The pre-tax net realized capital gains (losses), as adjusted, excluded from pre-tax operating earnings reflects consolidated U.S. GAAP pre-tax net realized capital gains (losses) excluding the following items that are included in pre-tax operating earnings: ● Periodic settlements and accruals on derivative instruments not designated as hedging instruments, ● Certain market value adjustments of derivatives and embedded derivatives and ● Certain market value adjustments of derivative instruments used to economically hedge embedded derivatives. Pre-tax net realized capital gains (losses), as adjusted, are further adjusted for: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, ● Certain market value adjustments to fee revenues, ● Pre-tax net realized capital gains (losses) related to equity method investments, ● Pre-tax net realized capital gains (losses) related to sponsored investment funds and other adjustments, ● Certain variable annuity fees, ● Certain real estate-related depreciation and amortization, ● Market value adjustments of market risk benefits, ● Related changes in the amortization pattern of actuarial balances, ● Certain hedge accounting market value expense adjustments and ● Net realized capital gains (losses) distributed. Pre-tax income (loss) from exited business includes amounts associated with our exited U.S. retail fixed annuity and ULSG businesses as well as amounts associated with other exited or divested businesses. Pre-tax income (loss) from exited business includes the change in fair value of the funds withheld embedded derivative, net realized capital gains (losses) on funds withheld assets, amortization of reinsurance gain (loss) and other impacts of exited business. Other impacts of exited business primarily includes change in reserves and DAC amortization. Other impacts of exited business in 2025 also include the impairment of assets associated with an exited business. 93 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Segment operating revenues reflect consolidated U.S. GAAP total revenues excluding: ● Net realized capital gains (losses), except periodic settlements and accruals on derivatives not designated as hedging instruments and certain market value adjustments of derivative instruments used to economically hedge embedded derivatives, and their impact on: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, ● Certain variable annuity fees, ● Certain real estate-related depreciation and amortization, ● Certain market value adjustments to fee revenues, ● Pre-tax net realized capital gains (losses) related to equity method investments and ● Pre-tax net realized capital gains (losses) related to sponsored investment funds and other adjustments. ● Pre-tax revenues from exited business, ● Pre-tax other revenue adjustments and income taxes of equity method investments and ● Pre-tax other revenue adjustments management believes are not indicative of overall operating trends. Segment expenses reflect consolidated U.S. GAAP total expenses excluding: ● Pre-tax expenses associated with net realized capital gains (losses), ● Periodic settlements and accruals on derivatives used to hedge MRBs, ● Pre-tax expenses from exited business and ● Pre-tax expense adjustments management believes are not indicative of overall operating trends. The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of: (1) pension and other postretirement employee benefits (“OPEB”) cost allocations, (2) certain expenses deemed to benefit the entire organization and (3) income tax allocations. For purposes of determining pre-tax operating earnings, the segments are allocated the service component of pension and OPEB costs. The Corporate segment reflects the non-service components of pension and OPEB costs as assumptions are established and funding decisions are managed from a company-wide perspective. Additionally, the Corporate segment reflects expenses that benefit the entire organization for which the segments are not able to influence the spend. This includes expenses such as public company costs, executive management costs, acquisition and disposition costs, among others. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining non-GAAP operating earnings, the segments are allocated tax adjustments consistent with the positions we took on tax returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes. The following tables summarize select financial information by segment and reconcile segment totals to those reported in the consolidated financial statements. Segment Assets March 31, 2026 December 31, 2025 (in millions) Retirement and Income Solutions $ 231,632.1 $ 238,141.5 Principal Asset Management 50,598.5 52,267.1 Benefits and Protection 47,973.2 48,165.5 Corporate 2,500.7 2,802.4 Total assets per consolidated statements of financial position $ 332,704.5 $ 341,376.5 94 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Segment Operating Revenues For the three months ended March 31, 2026 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Revenue from contracts with external customers (1) $ 630.8 $ 455.6 $ 1,089.3 $ 87.6 $ 2,263.3 Adjustments for revenue from contracts with external customers not included in operating revenues (2) ( 17.7 ) — 5.8 — ( 11.9 ) Net investment income included in operating revenues 903.0 76.1 156.2 58.4 1,193.7 Operating revenues from equity method investments — 70.8 — ( 0.1 ) 70.7 Inter-segment operating revenues 2.9 80.8 2.4 77.0 163.1 Eliminations of inter-segment operating revenues — — — ( 163.1 ) ( 163.1 ) Segment operating revenues (3) $ 1,519.0 $ 683.3 $ 1,253.7 $ 59.8 3,515.8 Net realized capital losses, net of related revenue adjustments ( 136.8 ) Revenues from exited business (4) 181.5 Adjustments related to equity method investments ( 23.7 ) Market risk benefit derivative settlements ( 7.7 ) Total revenues per consolidated statements of operations $ 3,529.1 For the three months ended March 31, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Revenue from contracts with external customers (1) $ 1,259.0 $ 450.0 $ 1,055.5 $ 63.1 $ 2,827.6 Adjustments for revenue from contracts with external customers not included in operating revenues (2) ( 17.4 ) — 6.8 — ( 10.6 ) Net investment income included in operating revenues 822.0 117.6 149.8 62.4 1,151.8 Operating revenues from equity method investments — 44.6 — ( 0.1 ) 44.5 Inter-segment operating revenues 11.6 74.6 2.1 79.1 167.4 Eliminations of inter-segment operating revenues — — — ( 167.4 ) ( 167.4 ) Segment operating revenues (3) $ 2,075.2 $ 686.8 $ 1,214.2 $ 37.1 4,013.3 Net realized capital losses, net of related revenue adjustments ( 101.7 ) Revenues from exited business (4) ( 188.0 ) Adjustments related to equity method investments ( 16.6 ) Market risk benefit derivative settlements ( 11.1 ) Total revenues per consolidated statements of operations $ 3,695.9 (1) Includes amounts reported in premiums and other considerations as well as fees and other revenues on the consolidated statements of operations. (2) Includes certain revenues associated with our exited U.S. retail fixed annuity and ULSG businesses and fees associated with net realized capital gains (losses) that are not included in segment operating revenues. (3) See Note 17, Revenues from Contracts with Customers, for additional detail relating to segment operating revenues. (4) Revenues from exited business included: 95 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) For the three months ended March 31, 2026 2025 (in millions) Change in fair value of funds withheld embedded derivative $ 177.4 $ ( 209.7 ) Net realized capital gains on funds withheld assets 9.4 28.0 Amortization of reinsurance gain 0.6 0.5 Other impacts of exited business ( 5.9 ) ( 6.8 ) Total revenues from exited business $ 181.5 $ ( 188.0 ) Segment Expenses The expense categories within total segment expenses included: For the three months ended March 31, 2026 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Benefits, claims and settlement expenses $ 773.1 $ 52.7 $ 694.0 $ 32.5 Liability for future policy benefits remeasurement (gain) loss ( 5.3 ) 1.0 ( 10.6 ) — Market risk benefit remeasurement loss 0.4 — — — Dividends to policyholders — — 30.6 — Commission expense 68.6 50.4 142.4 42.5 Capitalization of deferred acquisition costs and contract costs ( 35.7 ) ( 9.2 ) ( 85.3 ) — Amortization of deferred acquisition costs and contract costs 23.0 8.3 64.7 — Depreciation and amortization 17.6 14.2 4.0 3.8 Interest expense on corporate debt — 0.4 — 43.4 Compensation and other 375.2 353.8 243.9 62.2 Total operating expenses 448.7 417.9 369.7 151.9 Total segment expenses $ 1,216.9 $ 471.6 $ 1,083.7 $ 184.4 $ 2,956.6 Net realized capital losses expense adjustments 48.6 Market risk benefit derivative settlements ( 7.7 ) Expenses from exited business (1) 49.8 Total expenses per consolidated statements of operations $ 3,047.3 96 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) For the three months ended March 31, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Benefits, claims and settlement expenses $ 1,353.9 $ 90.6 $ 699.3 $ 23.6 Liability for future policy benefits remeasurement (gain) loss ( 4.8 ) 0.5 ( 0.4 ) — Market risk benefit remeasurement loss 1.9 — — — Dividends to policyholders — — 19.1 — Commission expense 69.5 48.1 151.0 23.8 Capitalization of deferred acquisition costs and contract costs ( 40.9 ) ( 7.7 ) ( 87.3 ) — Amortization of deferred acquisition costs and contract costs 21.1 5.8 64.0 — Depreciation and amortization 19.4 13.9 4.3 4.1 Interest expense on corporate debt — 0.5 — 42.2 Compensation and other 370.8 342.8 244.7 50.2 Total operating expenses 439.9 403.4 376.7 120.3 Total segment expenses $ 1,790.9 $ 494.5 $ 1,094.7 $ 143.9 $ 3,524.0 Net realized capital losses expense adjustments 27.8 Market risk benefit derivative settlements ( 11.1 ) Expenses from exited business (1) 126.3 Total expenses per consolidated statements of operations $ 3,667.0 (1) Expenses from exited business included: For the three months ended March 31, 2026 2025 (in millions) Amortization of reinsurance loss $ 20.3 $ 26.9 Other impacts of exited business 29.5 99.4 Total expenses from exited business $ 49.8 $ 126.3 Segment Pre-Tax Operating Earnings For the three months ended March 31, 2026 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment pre-tax operating earnings (losses) $ 302.1 $ 208.5 $ 170.0 $ ( 122.1 ) $ 558.5 Pre-tax net realized capital losses, as adjusted (1) ( 185.4 ) Pre-tax income from exited business (2) 131.7 Adjustments related to equity method investments and noncontrolling interest ( 23.0 ) Total income before income taxes per consolidated statements of operations $ 481.8 97 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) For the three months ended March 31, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment pre-tax operating earnings (losses) $ 283.7 $ 187.5 $ 119.5 $ ( 105.6 ) $ 485.1 Pre-tax net realized capital losses, as adjusted (1) ( 129.5 ) Pre-tax loss from exited business (2) ( 314.3 ) Adjustments related to equity method investments and noncontrolling interest ( 12.4 ) Total income before income taxes per consolidated statements of operations $ 28.9 (1) Pre-tax net realized capital gains (losses), as adjusted, is derived as follows: For the three months ended March 31, 2026 2025 (in millions) Net realized capital losses $ ( 122.1 ) $ ( 117.1 ) Derivative and hedging-related revenue adjustments ( 27.4 ) ( 13.2 ) Market value adjustments to fee revenues 0.1 ( 0.1 ) Certain variable annuity fees 17.1 17.0 Equity method investments 0.9 4.6 Certain real estate-related depreciation and amortization ( 14.9 ) — Sponsored investment funds and other adjustments 9.5 7.1 Net realized capital losses, net of related revenue adjustments ( 136.8 ) ( 101.7 ) Amortization of actuarial balances ( 5.9 ) ( 1.9 ) Capital losses distributed 25.8 39.5 Derivative and hedging-related expense adjustments ( 0.6 ) 0.5 Market value adjustments of market risk benefits ( 47.8 ) ( 43.9 ) Market value adjustments of embedded derivatives ( 20.1 ) ( 22.0 ) Net realized capital losses, net of related expense adjustments ( 48.6 ) ( 27.8 ) Pre-tax net realized capital losses, as adjusted (a) $ ( 185.4 ) $ ( 129.5 ) (a) As adjusted before noncontrolling interest capital gains (losses). (2) Pre-tax income (loss) from exited business included: For the three months ended March 31, 2026 2025 (in millions) Change in fair value of funds withheld embedded derivative $ 177.4 $ ( 209.7 ) Net realized capital gains on funds withheld assets 9.4 28.0 Amortization of reinsurance loss ( 19.7 ) ( 26.4 ) Other impacts of exited business ( 35.4 ) ( 106.2 ) Total pre-tax income (loss) from exited business $ 131.7 $ ( 314.3 ) 98 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) 17. Revenues from Contracts with Customers The following tables summarize disaggregation of revenues from contracts with customers, including select financial information by segment, and reconcile totals to those reported in the consolidated financial statements. Revenues from contracts with customers are included in fees and other revenues on the consolidated statements of operations. For the three months ended March 31, 2026 2025 (in millions) Revenue from contracts with customers by segment: Retirement and Income Solutions $ 150.6 $ 145.7 Principal Asset Management: Investment Management 436.8 426.7 International Pension 96.1 92.4 Eliminations ( 5.8 ) ( 4.4 ) Total Principal Asset Management 527.1 514.7 Benefits and Protection: Specialty Benefits 3.6 3.7 Life Insurance 11.7 21.1 Total Benefits and Protection 15.3 24.8 Corporate 76.9 60.6 Total segment revenue from contracts with customers 769.9 745.8 Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1) 329.6 314.5 Pre-tax other adjustments (2) 17.8 17.4 Total fees and other revenues per consolidated statements of operations $ 1,117.3 $ 1,077.7 (1) Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted for under the financial instruments or insurance contracts standards. (2) Pre-tax other adjustments relate to revenues from exited business, certain variable annuity fees and market value adjustments to fee revenues. Retirement and Income Solutions Retirement and Income Solutions offers service and trust agreements for defined contribution retirement plans, including 401(k) plans, 403(b) plans, and employee stock ownership plans. The investment components of these service agreements are in the form of mutual fund offerings. In addition, plan sponsor retirement plan trust and custody services are also available through our trust company. Individual retirement accounts (“IRAs”) are offered through Principal Bank. Furthermore, services and trust agreements are offered to non-retirement customers including insurance companies, endowments and other financial institutions. Administrative service fee revenues are earned for administrative activities performed for the defined contribution retirement plans including recordkeeping and reporting as well as trust and custody, asset management and investment services. Administrative service fee revenues are earned for administrative activities performed for non-retirement plan customers including trust and custody services, defined benefit administration and investment management activities. The majority of these activities are performed daily over time. Fee-for-service transactions are also provided upon client request. These services are considered distinct or grouped into a bundle until a distinct performance obligation is identified. Some performance obligations are considered a series of distinct services, which are substantially the same and have the same pattern of transfer to the customer. 99 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Administrative service fee revenues can be based on a fixed contractual rate for these services or can be variable based upon contractual rates applied to the market value of the client’s investments or assets under administration. If the consideration for this series of performance obligations is based on market value, it is considered variable during the billing period as the services are performed over time. The consideration becomes unconstrained and thus recognized as revenue for each billing period’s series of distinct services once the market value of the client’s investments or assets under administration is determined at market close. Additionally, fixed fees and other revenues are recognized point-in-time as fee-for-service transactions upon completion. IRAs are primarily funded by retirement savings rolled over from qualified retirement plans. The IRAs are held in savings accounts, money market accounts and certificates of deposit. Deposit account fee revenues are earned as the performance of establishing and maintaining IRA accounts is completed. Fee-for-service transactions are also provided upon client request. The establishment fees and annual maintenance fees are accrued into earnings over a period of time using the average account life. Upfront and recurring bank fees are related to performance obligations that have the same pattern of transfer to the customer and are recognized in income over time with control transferred to the customers utilizing the output method. These fees are based on a fixed contractual rate. Fixed fees and other revenues are also recognized point-in-time as fee-for-service transactions upon completion. Additionally, commission income is earned on advisory services provided to customers. The revenues are earned over time as the service is performed based upon contractual rates applied to the market value of the clients’ portfolios. The types of revenues from contracts with customers were as follows: For the three months ended March 31, 2026 2025 (in millions) Administrative service fee revenue $ 145.1 $ 141.2 Deposit account fee revenue 3.6 3.4 Commission income 1.9 1.1 Total revenues from contracts with customers 150.6 145.7 Fees and other revenues not within the scope of revenue recognition guidance 299.9 295.5 Total fees and other revenues 450.5 441.2 Premiums and other considerations 171.9 810.3 Net investment income 896.6 823.7 Total operating revenues $ 1,519.0 $ 2,075.2 Principal Asset Management Fees and other revenues earned for asset management, investment advisory and distribution services provided to institutional and retail clients in addition to trustee and/or administrative services performed for retirement savings plans. Fees are based largely upon contractual rates applied to the specified amounts of the clients’ portfolios. Each service is a distinct performance obligation; however, if the services are not distinct on their own, we combine them into a distinct bundle or we have a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. Fees and other revenues received for performance obligations such as asset management and other services are typically recognized over time utilizing the output method as the service is performed. Performance fees and transaction fees on certain accounts are recognized in income when the probability of significant reversal will not occur upon resolution of the uncertainty, which could be based on a variety of factors such as market performance or other internal metrics. Asset management fees are accrued each month based on the fee terms within the applicable agreement and are generally billed quarterly when values used for the calculation are available. Management fees and performance fees are variable consideration as they are subject to fluctuation based on assets under management (“AUM”) and other constraints. These fees are not recognized until unconstrained at the end of each reporting period. Incentive-based fees are recognized in income when the probability of significant reversal will not occur upon the resolution of the uncertainty, which is based on market performance. 100 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) Fees for managing customers’ mandatory retirement savings accounts in Chile are collected with each monthly deposit made by our customers. If a customer stops contributing before retirement age, we collect no fees but services are still provided. We recognize revenue from these contracts as services are performed over the life of the contract and review annually. The types of revenues from contracts with customers were as follows: For the three months ended March 31, 2026 2025 (in millions) Investment Management: Management fee revenue $ 398.6 $ 389.1 Other fee revenue 38.2 37.6 Total revenues from contracts with customers 436.8 426.7 Fees and other revenues not within the scope of revenue recognition guidance 5.1 2.8 Total fees and other revenues 441.9 429.5 Net investment income 24.2 24.2 Total operating revenues $ 466.1 $ 453.7 For the three months ended March 31, 2026 2025 (in millions) International Pension: Management fee revenue $ 92.3 $ 89.2 Other fee revenue 3.8 3.2 Total revenues from contracts with customers 96.1 92.4 Fees and other revenues not within the scope of revenue recognition guidance 1.0 1.2 Total fees and other revenues 97.1 93.6 Premiums and other considerations ( 0.1 ) 1.7 Net investment income 126.0 142.5 Total operating revenues $ 223.0 $ 237.8 Benefits and Protection Fees and other revenues are earned for administrative services performed including recordkeeping and reporting services for fee-for-service products, nonqualified benefit plans, separate accounts and dental networks. Services within contracts are not distinct on their own; however, we combine the services into a distinct bundle and account for the bundle as a single performance obligation, which is satisfied over time utilizing the output method as services are rendered. The transaction price corresponds with the performance completed to date, for which the value is recognized as revenue during the period. Variability of consideration is resolved at the end of each period and payments are due when billed. Beginning in 2026, commission income earned through sponsored brokerage services is reported within the Corporate segment due to affiliated distribution realignment. Prior to 2026, performance obligations were satisfied at a point in time, upon delivery of a placed case, and the transaction price calculated per the compensation schedule was recognized as revenue. 101 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) The types of revenues from contracts with customers were as follows: For the three months ended March 31, 2026 2025 (in millions) Specialty Benefits: Administrative service fees $ 3.6 $ 3.7 Total revenues from contracts with customers 3.6 3.7 Fees and other revenues not within the scope of revenue recognition guidance 4.3 4.6 Total fees and other revenues 7.9 8.3 Premiums and other considerations 853.5 823.2 Net investment income 55.5 52.4 Total operating revenues $ 916.9 $ 883.9 For the three months ended March 31, 2026 2025 (in millions) Life Insurance: Administrative service fees $ 11.7 $ 10.9 Commission income — 10.2 Total revenues from contracts with customers 11.7 21.1 Fees and other revenues not within the scope of revenue recognition guidance 96.6 89.6 Total fees and other revenues 108.3 110.7 Premiums and other considerations 130.3 124.4 Net investment income 98.4 95.4 Total operating revenues $ 337.0 $ 330.5 Corporate Fees and other revenues are earned on the performance of selling and servicing of securities and related products offered through our introducing broker-dealer registered with the FINRA, which is part of our affiliated distribution function. Our affiliated distribution function enters into selling and distribution agreements with the obligation to sell or distribute the securities products, such as mutual funds, annuities and products sold through RIAs, to individual clients in return for front-end sales charges, 12b-1 service fees, annuity fees and asset-based fees. Front-end sales charges, 12b-1 fees and annuity fees are related to a single sale and are earned at the time of sale. Our affiliated distribution function also enters into agreements with individual customers to provide securities trade execution and custody through a brokerage services platform in return for ticket charge and other service fee revenue. These services are bundled as one single distinct service referred to as brokerage services. This revenue is related to distinct transactions and is earned at a point in time. We also enter into agreements with individual customers to provide trade execution, clearing services, custody services and investment research services through our proprietary offered fee-based products. These services are bundled as one single distinct service referred to as advisory services. In addition, for outside RIA business our affiliated distribution function performs sales and distribution services only. The revenues are earned over time as the service is performed utilizing the output method. A majority of our revenue is based upon contractual rates applied to the market value of the clients’ portfolios and considered variable consideration. Commission income is also earned through sponsored brokerage services. Performance obligations are satisfied at a point in time, upon delivery of a placed case, and the transaction price calculated per the compensation schedule is recognized as revenue. 102 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) The Corporate segment also includes inter-segment eliminations of fees and other revenues. The types of revenues from contracts with customers were as follows: For the three months ended March 31, 2026 2025 (in millions) Commission income $ 128.4 $ 131.5 Other fee revenue 27.9 23.9 Eliminations ( 79.4 ) ( 94.8 ) Total revenues from contracts with customers 76.9 60.6 Fees and other revenues not within the scope of revenue recognition guidance ( 77.3 ) ( 78.9 ) Total fees and other revenues ( 0.4 ) ( 18.3 ) Premiums and other considerations ( 1.4 ) ( 1.3 ) Net investment income 61.6 56.7 Total operating revenues $ 59.8 $ 37.1 Contract Costs Sales compensation and other incremental costs of obtaining a contract are capitalized and amortized over the period of contract benefit if the costs are expected to be recovered. The contract cost asset, which is included in other assets on the consolidated statements of financial position, was $ 184.1 million and $ 183.3 million as of March 31, 2026 and December 31, 2025, respectively. We apply the practical expedient for certain costs where we recognize the incremental costs of obtaining these contracts as an expense when incurred if the amortization period of the assets is one year or less. These costs, along with costs that are not deferrable, are included in operating expenses on the consolidated statements of operations. Deferred contract costs consist primarily of commissions and variable compensation. We amortize capitalized contract costs on a straight-line basis over the expected contract life, reflecting lapses as they are incurred. Deferred contract costs are subject to impairment testing on an annual basis, or when a triggering event occurs that could warrant an impairment. To the extent future revenues less future maintenance expenses are not adequate to cover the asset balance, an impairment is recognized. For the three months ended March 31, 2026 and 2025, $ 10.6 million and $ 52.8 million, respectively, of amortization expense was recorded in operating expenses on the consolidated statements of operations Additionally, for the three months ended March 31, 2026 and 2025, $ 0.0 million and $ 45.4 million, respectively, of impairment loss was recognized in operating expenses on the consolidated statements of operations in relation to the costs capitalized. The 2025 impairment loss related to pension contracts associated with our planned exit of sponsor and trustee (pension) roles in Hong Kong for Mandatory Provident Fund Schemes. 18. Stock-Based Compensation Plans As of March 31, 2026, we had the 2021 Stock Incentive Plan, the 2020 Directors Stock Plan, the 2014 Stock Incentive Plan, the Employee Stock Purchase Plan, the 2014 Directors Stock Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan and the Directors Stock Plan (“Stock-Based Compensation Plans”). No new grants will be made under the 2020 Directors Stock Plan, the 2014 Stock Incentive Plan, the 2014 Directors Stock Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan or the Directors Stock Plan. Under the terms of the 2021 Stock Incentive Plan, grants may be nonqualified stock options, incentive stock options qualifying under Section 422 of the Internal Revenue Code, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance units or other stock-based awards. To date, we have not granted any incentive stock options, restricted stock or performance units under any plans. As part of our fair value process, we assess the impact of material nonpublic information on our share price or expected volatility, as applicable, at the time of grant. No awards in 2026 required a fair value adjustment. As of March 31, 2026, the maximum number of new shares of common stock available for grant under the 2021 Stock Incentive Plan was 17.8 million. 103 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) For awards with graded vesting, we use an accelerated expense attribution method. The compensation cost that was charged against net income for stock-based awards granted under the Stock-Based Compensation Plans was as follows: For the three months ended March 31, 2026 2025 (in millions) Compensation cost $ 43.6 $ 39.3 Related income tax benefit 10.4 9.0 Capitalized as part of an asset 0.4 0.4 Nonqualified Stock Options No nonqualified stock options were granted to employees during both the three months ended March 31, 2026 and 2025. All outstanding nonqualified stock options are vested and have been fully expensed. Performance Share Awards Performance share awards were granted to certain employees under the 2021 Stock Incentive Plan. Total performance share awards granted were 0.3 million for the three months ended March 31, 2026. The performance share awards granted represent initial target awards and do not reflect potential increases or decreases resulting from the final performance results to be determined at the end of the performance period. The performance share awards include a relative total shareholder return modifier under which the number of shares ultimately awarded is also impacted by our actual shareholder return relative to our S&P 500 Financial Sector Index peer group. The actual number of common shares to be awarded at the end of each performance period will range between 0 % and 180 % of the initial target awards. The fair value of performance share awards is determined using a Monte Carlo simulation model. The weighted-average grant date fair value of these performance share awards granted was $ 100.33 per common share. As of March 31, 2026, we had $ 38.0 million of total unrecognized compensation cost related to nonvested performance share awards granted. The cost is expected to be recognized over a weighted-average service period of approximately 1.9 years. Restricted Stock Units Restricted stock units were issued to certain employees and non-employee directors pursuant to the 2021 Stock Incentive Plan. Total restricted stock units granted were 1.0 million for the three months ended March 31, 2026. The fair value of restricted stock units is determined based on the closing stock price of our common shares on the grant date. The weighted-average grant date fair value of these restricted stock units granted was $ 92.70 per common share. As of March 31, 2026, we had $ 127.9 million of total unrecognized compensation cost related to nonvested restricted stock unit awards granted. The cost is expected to be recognized over a weighted-average period of approximately 2.2 years. Employee Stock Purchase Plan Under the Employee Stock Purchase Plan, employees purchased 0.2 million shares for the three months ended March 31, 2026. The weighted average fair value of the discount on the stock purchased was $ 9.01 per share. As of March 31, 2026, a total of 2.0 million of new shares were available to be made issuable by us for this plan. 104 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) March 31, 2026 (Unaudited) 19. Earnings Per Common Share The computations of the basic and diluted per share amounts were as follows: For the three months ended March 31, 2026 2025 (in millions, except per share data) Net income $ 412.9 $ 62.9 Subtract: Net income (loss) attributable to noncontrolling interest ( 11.7 ) 14.8 Total $ 424.6 $ 48.1 Weighted-average shares outstanding: Basic 217.2 225.7 Dilutive effects: Stock options 0.6 0.7 Restricted stock units 2.1 2.1 Performance share awards 0.4 0.3 Diluted 220.3 228.8 Net income per common share: Basic $ 1.96 $ 0.21 Diluted $ 1.93 $ 0.21 The calculation of diluted earnings per share for the three months ended March 31, 2026 and 2025, excludes the incremental effect related to certain outstanding stock-based compensation grants due to their anti-dilutive effect. When a net loss is reported, our basic weighted-average shares are used to calculate diluted earnings per share, as dilutive shares would have an antidilutive effect and result in a lower loss per share. 105 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following analysis discusses our financial condition as of March 31, 2026, compared with December 31, 2025, and our consolidated results of operations for the three months ended March 31, 2026 and 2025, prepared in conformity with U.S. GAAP. The discussion and analysis includes, where appropriate, factors that may affect our future financial performance. The discussion should be read in conjunction with our Form 10-K, for the year ended December 31, 2025, filed with the SEC and the unaudited condensed consolidated financial statements and the related notes to the financial statements and the other financial information included elsewhere in this Form 10-Q. Forward-Looking Information Our narrative analysis below contains forward-looking statements intended to enhance the reader’s ability to assess our future financial performance. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments, and contain words and phrases such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend” and similar expressions. Forward-looking statements are made based upon management’s current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. 106 Table of Contents Actual results may differ materially from those included in the forward-looking statements as a result of risks and uncertainties including, but not limited to, the following: (1) adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs, as well as our access to capital and cost of capital; (2) conditions in the global capital markets, including the equity, bond or real estate markets and the economy generally may materially and adversely affect our business and results of operations; (3) changes in interest rates or credit spreads or a prolonged low interest rate environment may adversely affect our results of operations, financial condition and liquidity and our net income can vary from period to period; (4) our investment portfolio’s risks may reduce asset values, credited returns and overall financial performance; (5) our valuation of investments and the determinations of the amount of allowances and impairments taken on our investments may include methodologies, estimations and assumptions that are subject to differing interpretations and, if changed, could materially adversely affect our results of operations or financial condition; (6) any impairments of, or valuation allowances against, our deferred tax assets could adversely affect our results of operations and financial condition; (7) we may face losses on our insurance and annuity products if our actual experience differs significantly from our pricing and reserving assumptions; (8) the pattern of amortizing our DAC asset and other actuarial balances may change, impacting both the level of our DAC asset and other actuarial balances and the timing of our net income; (9) changes in laws or regulations may reduce our profitability or impact how we do business; (10) our ability to pay stockholder dividends, make share repurchases and meet our obligations may be constrained by the limitations on dividends or other distributions Iowa insurance laws impose on Principal Life; (11) changes in accounting standards may adversely affect our reported results of operations and financial condition; (12) litigation and regulatory investigations may affect our financial strength or reduce our profitability; (13) damage to our reputation may adversely affect our revenues and profitability; (14) we may not be able to protect our intellectual property and may be subject to infringement claims; (15) from time to time, we may become subject to tax audits, tax litigation or similar proceedings, and as a result we may owe additional taxes, interest and penalties in amounts that may be material; (16) applicable laws and our certificate of incorporation and by-laws may discourage takeovers and business combinations that some stockholders might consider in their best interests; (17) our risk management framework may not identify or mitigate all risks, potentially leading to unexpected losses; (18) competition, including from companies that may have greater financial resources, broader arrays of products, higher ratings and stronger financial performance, may impair our ability to retain existing customers, attract new customers and maintain our profitability; (19) a downgrade in our financial strength or credit ratings may increase policy surrenders and withdrawals, reduce new sales, terminate relationships with distributors, impact existing liabilities and increase our cost of capital, any of which could adversely affect our profitability and financial condition; (20) client terminations or withdrawals or changes in investor preferences may lead to a reduction in revenues for our asset management and accumulation businesses; (21) guarantees within certain of our products that protect policyholders may decrease our net income or increase the volatility of our results of operations or financial position under U.S. GAAP if our hedging or risk management strategies prove ineffective or insufficient; (22) our international businesses face political, legal, operational and other risks that could reduce our profitability in those businesses; (23) we face risks arising from fraudulent activities; (24) we face risks arising from vendor failures or data breaches; (25) we face risks arising from our participation in joint ventures; (26) we may need to fund deficiencies in our Closed Block assets; (27) our reinsurers could default on their obligations or increase their rates, which could adversely impact our net income and financial condition; (28) we face risks arising from future acquisitions of businesses; (29) we face risks in administering coinsurance with funds withheld reinsurance agreements; (30) if we are unable to attract, develop and retain qualified employees and sales representatives and develop new distribution sources, our results of operations, financial condition, strategic growth commitments and sales of our products may be adversely impacted; (31) interruptions in information technology, infrastructure or other internal or external systems used for our business operations, or a failure to maintain the confidentiality, integrity or availability of data residing on such systems, could disrupt our business, damage our reputation and adversely impact our profitability; (32) our financial results may be adversely impacted by global climate changes and (33) catastrophic events could adversely affect our operations, net income or financial condition. Overview We provide financial products and services through the following reportable segments: ● Retirement and Income Solutions provides retirement and related financial products and services primarily to businesses, their employees, and other individuals. This segment includes workplace savings and retirement solutions, banking, trust and custodial services, individual variable annuities, pension risk transfer, investment only and our exited retail fixed annuities business. We offer a comprehensive portfolio of products and services for retirement savings and retirement income: ● To businesses of all sizes, we offer products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, employee stock ownership plan services and pension closeout services. For more basic retirement services, we offer SIMPLE IRAs and payroll deduction plans; 107 Table of Contents ● To large institutional clients, we also offer investment only products, including investment only GICs; ● To employees of businesses and other individuals, we offer the ability to accumulate savings for retirement and other purposes through mutual funds, individual variable annuities, RILAs and bank products, along with retirement income options; and ● In addition, we offer trust and custody services. ● Principal Asset Management provides global investment solutions to institutional, retirement, retail and high net worth investors in the U.S. and select emerging markets. The segment is organized into Investment Management, which provides public, multi-asset and private market capabilities across all asset classes, including equity, fixed income, real estate and alternatives, to service a breadth of client investment objectives; and International Pension, which provides long-term savings and retirement solutions through pension accumulation and income annuities in Asia and Latin America. ● Benefits and Protection is organized into Specialty Benefits, which provides group dental, group life insurance, group disability insurance (including short-term disability, long-term disability and paid family and medical leave), supplemental health products (including vision, critical illness, accident and hospital indemnity) and individual disability insurance; and Life Insurance, which provides life insurance focused on the business market customer, including universal life and variable universal life (including indexed universal life) and traditional life insurance (including term life insurance). All remaining customers are part of the legacy life block of business, including universal and variable universal life insurance (including indexed universal life), traditional life insurance (including participating whole life, adjustable life products and term life insurance) and our exited ULSG business. ● Corporate, which manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including financing costs), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of our affiliated distribution businesses and our exited group medical and long-term care insurance businesses are reported in this segment. Affiliated distribution includes our retail broker-dealer and RIA. Transactions Affecting Comparability of Results of Operations Affiliated Distribution Realignment Beginning in 2026, we are reporting the results of a subsidiary supporting enterprise distribution, which was previously reported in the Benefits and Protection segment, in the Corporate segment. This aligns all our affiliated distribution functions within the Corporate segment. The results for this subsidiary primarily include fees and other revenues and operating expenses that largely offset each other, resulting in a minimal impact to pre-tax operating earnings. Principal Mandatory Provident Funds On January 16, 2025, we announced the signing of an agreement with BCT to expand our investment management capabilities and exit our sponsor and trustee (pension) roles in Hong Kong for MPF Schemes. BCT will be assuming the role as sponsor and trustee for the Principal MPF Schemes. The transaction is expected to close in 2026, subject to regulatory approval; however, certain transaction impacts were recognized in first quarter 2025. We impaired our distribution agreement intangible asset and contract cost asset, resulting in a $65.4 million loss reported in operating expenses on our consolidated statements of operations. Additionally, we classified our customer relationship intangible asset as held-for-sale, resulting in a $77.0 million loss reported in net realized capital gains (losses) on our consolidated statements of operations. For segment reporting, the impairments are reflected in loss from exited business and the held-for-sale write-down is reflected in net realized capital losses. As such, they had no impact on our Principal Asset Management segment pre-tax operating earnings. Other Factors Affecting Comparability of Results of Operations Fluctuations in Foreign Currency to U.S. Dollar Exchange Rates Fluctuations in foreign currency to U.S. dollar exchange rates for locations in which we have operations can affect reported financial results. In years when foreign currencies weaken against the U.S. dollar, translating foreign currencies into U.S. dollars results in fewer U.S. dollars to be reported. When foreign currencies strengthen, translating foreign currencies into U.S. dollars results in more U.S. dollars to be reported. 108 Table of Contents Foreign currency exchange rate fluctuations create variances in our financial statement line items. The most significant impact occurs within our Principal Asset Management segment where pre-tax operating earnings were positively impacted $8.0 million for the three months ended March 31, 2026, as a result of fluctuations in foreign currency to U.S. dollar exchange rates. This impact was calculated by comparing (a) the difference between current year results and prior year results to (b) the difference between current year results and prior year results translated using current year exchange rates for both periods. We use this approach to calculate the impact of exchange rates on all revenue and expense line items. For a discussion of our approaches to managing foreign currency exchange rate risk, see Item 3. “Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Risk.” Variable Investment Income Variable investment income includes certain types of investment returns such as prepayment fees and income (loss) from certain elements of our other alternative asset classes, including results of value-add real estate sales activity. Due to its unpredictable nature, variable investment income may or may not be material to our financial results for a given reporting period and may create variances when comparing different reporting periods. For additional information, see “Investment Results.” Recent Accounting Changes For recent accounting changes, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 1, Nature of Operations and Significant Accounting Policies” under the caption “Recent Accounting Pronouncements.” Results of Operations The following table presents summary consolidated financial information for the periods indicated: For the three months ended March 31, Increase 2026 2025 (decrease) (in millions) Revenues: Premiums and other considerations $ 1,148.1 $ 1,751.3 $ (603.2) Fees and other revenues 1,117.3 1,077.7 39.6 Net investment income 1,199.0 1,165.7 33.3 Net realized capital losses (122.1) (117.1) (5.0) Net realized capital gains on funds withheld assets 9.4 28.0 (18.6) Change in fair value of funds withheld embedded derivative 177.4 (209.7) 387.1 Total revenues 3,529.1 3,695.9 (166.8) Expenses: Benefits, claims and settlement expenses 1,611.1 2,220.0 (608.9) Liability for future policy benefits remeasurement (gain) loss (14.7) 2.2 (16.9) Market risk benefit remeasurement loss 40.5 34.7 5.8 Dividends to policyholders 30.6 19.1 11.5 Operating expenses 1,379.8 1,391.0 (11.2) Total expenses 3,047.3 3,667.0 (619.7) Income before income taxes 481.8 28.9 452.9 Income taxes (benefits) 68.9 (34.0) 102.9 Net income 412.9 62.9 350.0 Net income (loss) attributable to noncontrolling interest (11.7) 14.8 (26.5) Net income attributable to Principal Financial Group, Inc. $ 424.6 $ 48.1 $ 376.5 Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Net Income Attributable to Principal Financial Group, Inc. Net income attributable to Principal Financial Group, Inc. increased primarily due to the change in fair value of the funds withheld embedded derivative. 109 Table of Contents Total Revenues Premiums and other considerations decreased $638.4 million for the Retirement and Income Solutions segment primarily due to lower sales of single premium group annuities with life contingencies. Premiums and other considerations increased $37.1 million for the Benefits and Protection segment primarily due to growth in the Specialty Benefits business. Fees and other revenues increased $17.9 million for the Corporate segment primarily due to commission income related to the affiliated distribution realignment in 2026. Fees and other revenues increased $14.8 million for the Principal Asset Management segment primarily due to foreign currency tailwinds. Fees and other revenues increased $9.7 million for the Retirement and Income Solutions segment primarily due to an increase in fee revenue stemming from an increase in average monthly account values, which largely resulted from more favorable financial markets. For net investment income and net realized capital gains (losses) variance information, see “Investments — Investment Results” under the captions “Net Investment Income” and “Net Realized Capital Gains (Losses),” respectively. Net realized capital gains on funds withheld assets decreased primarily due to net unrealized losses on funds withheld assets in 2026 as compared to net unrealized gains in 2025. The change in fair value of the funds withheld embedded derivative resulted in a gain in 2026 as compared to a loss in 2025 due to changes in interest rates and credit spreads. Total Expenses Benefits, claims and settlement expenses decreased $575.4 million for the Retirement and Income Solutions segment primarily due to a decrease in reserves, largely stemming from lower sales of single premium group annuities with life contingencies. The liability for future policy benefits remeasurement (gain) loss change was primarily due to improvements in underlying claims experience in the Benefits and Protection segment. Dividends to policyholders increased in Benefits and Protection segment primarily due to a higher policyholder dividend obligation in the closed block from improved claims experience. Income Taxes The effective income tax rate of 14% for the three months ended March 31, 2026 changed from (118)% for the three months ended March 31, 2025, primarily due to an increase in pre-tax income with no proportionate change in permanent tax differences. Results of Operations by Segment For results of operations by segment see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 16, Segment Information.” Retirement and Income Solutions Segment Retirement and Income Solutions Segment Summary Financial Data Net revenue and average monthly account values are key metrics used to understand Retirement and Income Solutions earnings growth. Net revenue, which is used only at the segment level, is defined as operating revenues less benefits, claims and settlement expenses; liability for future policy benefits remeasurement (gain) loss; market risk benefit remeasurement (gain) loss and dividends to policyholders. Net revenue is impacted by: (1) changes in the equity markets and interest rates and (2) the difference between investment income earned on the underlying general account assets and the interest rate credited to the contracts. Average monthly account values include the net balances that customers have accumulated within their account, along with future policy benefits for retirement payout products. Average monthly account values are primarily impacted by net customer cash flows and credit market performance. 110 Table of Contents The following table presents the Retirement and Income Solutions segment net revenue and average monthly account values for the periods indicated: For the three months ended March 31, Increase 2026 2025 (decrease) Net revenue (in millions) $ 750.8 $ 724.2 $ 26.6 Average monthly account values (in billions) $ 646.3 $ 572.8 $ 73.5 The following table presents certain summary financial data relating to the Retirement and Income Solutions segment for the periods indicated: For the three months ended March 31, Increase 2026 2025 (decrease) (in millions) Operating revenues: Premiums and other considerations $ 171.9 $ 810.3 $ (638.4) Fees and other revenues 450.5 441.2 9.3 Net investment income 896.6 823.7 72.9 Total operating revenues 1,519.0 2,075.2 (556.2) Expenses: Benefits, claims and settlement expenses, including dividends to policyholders 773.1 1,353.9 (580.8) Liability for future policy benefits remeasurement gain (5.3) (4.8) (0.5) Market risk benefit remeasurement loss 0.4 1.9 (1.5) Operating expenses 448.7 439.9 8.8 Total expenses 1,216.9 1,790.9 (574.0) Pre-tax operating earnings attributable to noncontrolling interest — 0.6 (0.6) Pre-tax operating earnings $ 302.1 $ 283.7 $ 18.4 Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Pre-Tax Operating Earnings Pre-tax operating earnings increased due to an increase in net revenue, which was slightly offset by an increase in operating expenses as described below. Net Revenue Net revenue increased primarily due to a $14.0 million increase resulting from growth in the business, a $9.3 million increase in fee revenue primarily due to an increase in average monthly account values, which largely resulted from more favorable financial markets and an $8.0 million increase in variable investment income. Operating Expenses Operating expenses increased primarily due to a refinement of an accrual estimate related to plan administration expenses favorably impacting the first quarter of 2025 with no corresponding activity in the first quarter of 2026. 111 Table of Contents Principal Asset Management Segment AUM AUM forms the basis for generating our management fee revenues. However, in Chile, the Cuprum business operates differently, as most fees are collected with each deposit made by mandatory retirement customers, based on a capped salary level rather than asset levels. AUM growth is primarily driven by two factors: market performance and net cash flow. Market performance encompasses the returns from equity, fixed income, real estate and other alternative investments, while net cash flow reflects client deposits and withdrawals. Revenue growth increasingly depends on the fee levels associated with these deposits and withdrawals, which can vary significantly depending on the business or product mix. Additionally, our non-U.S. results are influenced by fluctuations in foreign currency exchange rates relative to the U.S. dollar. The AUM of our foreign subsidiaries is converted to U.S. dollars at the end of the reporting period using spot exchange rates, while revenue and expenses are translated using average exchange rates for the reporting period. The following table presents the AUM rollforward for assets managed by the Principal Asset Management segment for the periods indicated. For the three months ended March 31, 2026 2025 (in billions) AUM, beginning of period $ 747.8 $ 683.4