FULLTEXT DEL 4 AV 4
10-Q – 2026-04-29 – pfg-20260331x10q.htm
Net cash flow (2.4) (4.6) Market performance (10.3) 3.8 Other 0.7 (0.7) Operations disposed (1) (0.2) (0.8) Effect of exchange rates 2.0 8.2 AUM, end of period $ 737.6 $ 689.3 (1) 2026 includes withdrawals related to certain exited pension business in Hong Kong. 2025 includes the divestment of Origin Asset Management. Principal Asset Management Segment Summary Financial Data The following table presents certain summary financial data relating to the Principal Asset Management segment for the periods indicated: For the three months ended March 31, Increase 2026 2025 (decrease) (in millions) Operating revenues: Premiums and other considerations $ (0.1) $ 1.7 $ (1.8) Fees and other revenues 533.2 518.4 14.8 Net investment income 150.2 166.7 (16.5) Total operating revenues 683.3 686.8 (3.5) Expenses: Benefits, claims and settlement expenses 52.7 90.6 (37.9) Liability for future policy benefits remeasurement loss 1.0 0.5 0.5 Operating expenses 417.9 403.4 14.5 Total expenses 471.6 494.5 (22.9) Pre-tax operating earnings attributable to noncontrolling interest 3.2 4.8 (1.6) Pre-tax operating earnings $ 208.5 $ 187.5 $ 21.0 112 Table of Contents Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Pre-Tax Operating Earnings Pre-tax operating earnings increased in our Investment Management operations primarily due to $9.5 million higher management fee revenue as a result of increased average AUM. Pre-tax operating earnings increased in our International Pension operations due to $12.8 million higher earnings from our equity method investments in Brazil and $6.8 million of foreign currency tailwinds. These improvements were partially offset by $8.8 million of unfavorable relative market performance on our required regulatory investments. Benefits and Protection Segment Benefits and Protection Segment Summary Financial Data Premium and fees are a key metric for growth in the Benefits and Protection segment. We receive premiums on our specialty benefits insurance products as well as our traditional life insurance products. Fees are generated from our universal life, variable universal life and indexed universal life insurance products. We use several reinsurance programs to help manage the mortality and morbidity risk. Premium and fees are reported net of reinsurance premiums. The following table presents the Benefits and Protection segment premium and fees for the periods indicated: For the three months ended March 31, Increase 2026 2025 (decrease) (in millions) Premium and fees: Specialty Benefits $ 861.4 $ 831.5 $ 29.9 Life Insurance 238.6 235.1 3.5 The following table presents certain summary financial data relating to the Benefits and Protection segment for the periods indicated: For the three months ended March 31, Increase 2026 2025 (decrease) (in millions) Operating revenues: Premiums and other considerations $ 983.6 $ 947.4 $ 36.2 Fees and other revenues 116.2 119.0 (2.8) Net investment income 153.9 147.8 6.1 Total operating revenues 1,253.7 1,214.2 39.5 Expenses: Benefits, claims and settlement expenses 694.0 699.3 (5.3) Liability for future policy benefits remeasurement gain (10.6) (0.4) (10.2) Dividends to policyholders 30.6 19.1 11.5 Operating expenses 369.7 376.7 (7.0) Total expenses 1,083.7 1,094.7 (11.0) Pre-tax operating earnings $ 170.0 $ 119.5 $ 50.5 113 Table of Contents Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Pre-Tax Operating Earnings Pre-tax operating earnings in our Specialty Benefits business increased $23.3 million from improved claims experience and $3.1 million due to higher yields on invested assets. Pre-tax operating earnings in our Life Insurance business increased $12.6 million due to improved claims experience in our liability for future policy benefits remeasurement gain and $3.5 million due to growth in premium and fees. Operating Revenues Premiums and fees increased due to growth in our business. Net investment income in our Specialty Benefits business increased $3.1 million due to higher yields on invested assets. Net investment income in our Life Insurance business increased $1.8 million from growth in invested assets and $1.6 million from mark-to-market changes on options associated with our indexed universal life insurance. Total Expenses Benefits, claims and settlement expenses in our Specialty Benefits business decreased $23.3 million due to improved claims experience offset by $18.1 million due to growth in the business. Liability for future policy benefits remeasurement gain was driven by improvements in underlying claims experience, resulting in a $12.6 million increased gain in our Life Insurance business partially offset by a $2.4 million increased loss in our Specialty Benefits business. Dividends to policyholders in our Life Insurance business increased primarily due to a higher policyholder dividend obligation in the closed block from improved claims experience. Operating expenses decreased primarily due to lower net commission expense in our Life Insurance business largely resulting from the affiliated distribution realignment in 2026. Corporate Segment Corporate Segment Summary Financial Data The following table presents certain summary financial data relating to the Corporate segment for the periods indicated: For the three months ended March 31, Increase 2026 2025 (decrease) (in millions) Operating revenues: Total operating revenues $ 59.8 $ 37.1 $ 22.7 Expenses: Total expenses 184.4 143.9 40.5 Pre-tax operating losses attributable to noncontrolling interest (2.5) (1.2) (1.3) Pre-tax operating losses $ (122.1) $ (105.6) $ (16.5) 114 Table of Contents Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Pre-Tax Operating Losses Pre-tax operating losses increased primarily due to a $6.6 million increase in strategic initiatives funded by the Corporate segment, including brand expense, a $5.0 million increase in compensation costs and $1.8 million lower net investment income largely resulting from mark-to-market losses on investments. Liquidity and Capital Resources Liquidity and capital resources represent the overall strength of a company and its ability to generate strong cash flows, borrow funds at a competitive rate and raise new capital to meet operating and growth needs. We are monitoring our liquidity closely and feel confident in our ability to meet all long-term obligations to customers, policyholders and debt holders. Our sources of strength include our laddered long-term debt maturities with the next maturity occurring in November 2026, access to revolving credit facility and contingent funding arrangements, a strong risk-based capital position and our available cash and liquid assets. Our legal entity structure has an impact on our ability to meet cash flow needs as an organization. Following is a simplified organizational structure. Liquidity Our liquidity requirements have been and will continue to be met by funds from consolidated operations as well as the issuance of commercial paper, common stock, debt or other capital securities and borrowings from credit facilities. We believe the cash flows from these sources are sufficient to satisfy the current liquidity requirements of our operations, including reasonably foreseeable contingencies. We maintain a level of cash and securities which, combined with expected cash inflows from investments and operations, we believe to be adequate to meet anticipated short-term and long-term payment obligations. We will continue our prudent capital management practice of regularly exploring options available to us to maximize capital flexibility, including accessing the capital markets and careful attention to and management of expenses. We perform rigorous liquidity stress testing to ensure our asset portfolio includes sufficient high quality liquid assets that could be utilized to bolster our liquidity position under increasingly stressed market conditions. These assets could be utilized as collateral for secured borrowing transactions with various third parties or by selling the securities in the open market if needed. We also manage liquidity risk by limiting the sales of liabilities with features such as puts or other options that can be exercised at inopportune times. For example, as of March 31, 2026 , approximately $13.8 billion, or 99% , of our institutional guaranteed investment contracts and funding agreements cannot be redeemed by contractholders prior to maturity. Our individual annuity liabilities also contain surrender charges and other provisions limiting early surrenders. 115 Table of Contents The following table summarizes the withdrawal characteristics of our domestic general account investment contracts as of March 31, 2026 . Contractholder funds, net of reinsurance Percentage (in millions) Not subject to discretionary withdrawal $ 14,626.8 48.4 % Subject to discretionary withdrawal with adjustments: Specified surrender charges 6,742.7 22.3 Market value adjustments 8,873.9 29.3 Subject to discretionary withdrawal without adjustments 0.5 — Total domestic investment contracts $ 30,243.9 100.0 % Universal life insurance and certain traditional life insurance policies are also subject to discretionary withdrawals by policyholders. However, life insurance policies tend to be less susceptible to withdrawal than our investment contracts because policyholders may be subject to a new underwriting process in order to obtain a new life insurance policy. In addition, our life insurance liabilities include surrender charges to discourage early surrenders. We had the following short-term credit financing structures available with various financial institutions as of March 31, 2026 : Amount Obligor/Applicant Financing structure Maturity Capacity outstanding (3) (in millions) Principal Life (1) Credit facility October 2027 $ 800.0 $ — Principal Compañía de Seguros de Vida Chile S.A. (2) Unsecured lines of credit 85.6 15.4 Principal International de Chile S.A. (2) Unsecured lines of credit 24.1 2.8 Total $ 909.7 $ 18.2 (1) The credit facility is supported by sixteen banks. (2) The unsecured lines of credit can be used for repurchase agreements or other borrowings. Each line has a maturity of less than one year. (3) The amount outstanding is reported in short-term debt on the consolidated statements of financial position. The revolving credit facility is committed and available for general corporate purposes. The credit facility also provides 100% back-stop support for our commercial paper program, of which we had no outstanding balances as of March 31, 2026 and December 31, 2025. Most of the banks supporting the credit facility have other relationships with us. Due to the financial strength and the strong relationships we have with these providers, we are comfortable we have very low risk the financial institutions would be unable or unwilling to fund this facility. The Holding Companies: PFG and PFS. The principal sources of funds available to our parent holding company, PFG, are dividends from subsidiaries as well as its ability to borrow funds at competitive rates and raise capital to meet operating and growth needs. These funds are used by PFG to meet its obligations, which include the payment of dividends on common stock, debt service and the repurchase of stock. The declaration and payment of common stock dividends is subject to the discretion of our Board and will depend on our overall financial condition, results of operations, capital levels, cash requirements, future prospects, receipt of dividends or other distributions from Principal Life (as described below), risk management considerations and other factors deemed relevant by the Board. No significant restrictions limit the payment of dividends by PFG, except those generally applicable to corporations incorporated in Delaware. 116 Table of Contents Dividends or other distributions from Principal Life, our primary subsidiary, are limited by Iowa law. Under Iowa law, Principal Life may pay dividends or make other distributions only from the earned surplus arising from its business and must receive the prior approval of the Commissioner of Insurance of the State of Iowa (the “Commissioner”) to pay stockholder dividends or make any other distribution if such distribution would exceed certain statutory limitations. Iowa law gives the Commissioner discretion to disapprove requests for distributions in excess of these limitations. Extraordinary dividends include those made, together with dividends and other distributions, within the preceding twelve months that exceed the greater of (i) 10% of statutory policyholder surplus as of the previous year-end excluding admitted disallowed interest maintenance reserve or (ii) the statutory net gain from operations from the previous calendar year, not to exceed earned surplus. Based on statutory results for the year ended December 31, 2025, the ordinary stockholder dividend limitation for Principal Life is approximately $1,234.0 million in 2026. However, because the dividend test is based on dividends previously paid over rolling twelve month periods, if paid before a specified date during 2026, some or all of such dividends may be extraordinary and require regulatory approval. Total stockholder dividends paid by Principal Life to its parent for the three months ended March 31, 2026 , were $232.0 million, all of which was extraordinary and approved by the Commissioner. As of March 31, 2026 , we had $1,802.6 million of cash and liquid assets held in our holding companies and other subsidiaries, which is available for corporate purposes . Corporate balances held in foreign holding companies meet the indefinite reinvestment exception. Operations. Our primary consolidated cash flow sources are premiums from insurance products, pension and annuity deposits, asset management fee revenues, administrative services fee revenues, income from investments and proceeds from the sales or maturity of investments. Cash outflows consist primarily of payment of benefits to policyholders and beneficiaries, income and other taxes, current operating expenses, payment of dividends to policyholders, payments in connection with investments acquired, payments made to acquire subsidiaries, payments relating to policy and contract surrenders, withdrawals, policy loans, interest payments and repayment of short-term debt and long-term debt. Our investment strategies are generally intended to provide adequate funds to pay benefits without forced sales of investments. For a discussion of our investment objectives and strategies, see “Investments.” Cash Flows. Cash flow activity, as reported in our consolidated statements of cash flows, provides relevant information regarding our sources and uses of cash. The following discussion of our operating, investing and financing portions of the cash flows excludes cash flows attributable to the separate accounts. Net cash provided by operating activities was $187.1 million and $977.3 million for the three months ended March 31, 2026 and 2025, respectively. Our insurance business typically generates positive cash flows from operating activities, as premiums collected from our insurance products and investment income received exceed acquisition costs, benefits paid, redemptions and operating expenses. These positive cash flows are then invested to support the obligations of our insurance and investment products and required capital supporting these products. Our cash flows from operating activities are affected by the timing of premiums, fees and investment income received and benefits and expenses paid. The decrease in cash provided by operating activities in 2026 compared to 2025 was primarily due to fluctuations in receivables and payables associated with the timing of settlements. Net cash used in investing activities was $959.8 million and $952.7 million for the three months ended March 31, 2026 and 2025, respectively. The increase in cash used in investing activities was due to net acquisitions and originations of mortgage loans in 2026 compared to net sales of mortgage loans in 2025, which were mostly offset by lower net purchases of available-for-sale securities in 2026 as compared to 2025. Net cash provided by financing activities was $395.7 million for the three months ended March 31, 2026, compared to net cash used in financing activities of $360.8 million for the three months ended March 31, 2025 . The increase in cash provided by financing activities was due to an increase in banking operations net deposits and net investment contract deposits in 2026 as compared to 2025. Guarantors and Issuers of Guaranteed Securities. PFG has issued certain notes pursuant to transactions registered under the Securities Act of 1933. Such notes include all currently outstanding senior notes (the “registered notes”). For additional information on the senior notes, see Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 13, Debt” in our Annual Report on Form 10-K for the year ended December 31, 2025. 117 Table of Contents PFS, a wholly owned subsidiary of PFG, has guaranteed each of the registered notes on a full and unconditional basis. The full and unconditional guarantees require PFS to satisfy the obligations of the guaranteed security immediately, if and when PFG has failed to make a scheduled payment thereunder. If PFS does not make such payment, any holder of the guaranteed security may immediately bring suit directly against PFS for payment of amounts due and payable. No other subsidiary of PFG has guaranteed any of the registered notes. Summary financial information is presented below on a combined basis for PFG and PFS (the “obligor group”) and transactions between the obligor group have been eliminated. The summary financial information excludes subsidiaries that are not issuers or guarantors. Any investments by the obligor group in other subsidiaries have been excluded. March 31, 2026 December 31, 2025 (in millions) Summary Statements of Financial Position Information: Total investments $ 626.8 $ 646.0 Cash and cash equivalents 255.1 459.7 Goodwill 618.5 618.5 Other intangibles 360.5 366.1 Other assets 252.3 202.3 Due from non-obligor subsidiaries 266.4 133.8 Total assets 2,488.1 2,552.5 Long-term debt 3,925.1 3,923.4 Other liabilities 428.8 325.1 Due to non-obligor subsidiaries 694.0 727.7 Total liabilities 5,208.1 5,120.5 For the three months ended For the year ended March 31, 2026 December 31, 2025 (in millions) Summary Statements of Operations Information: Total revenues $ 40.6 $ 67.3 Total expenses 141.6 531.3 Net loss (81.0) (368.0) Shelf Registration. Under our current shelf registration, we have the ability to issue, in unlimited amounts, unsecured senior debt securities or subordinated debt securities, junior subordinated debt, preferred stock, common stock, warrants, depositary shares, purchase contracts and purchase units of PFG. Our wholly owned subsidiary, PFS, may guarantee, fully and unconditionally or otherwise, our obligations with respect to any non-convertible securities, other than common stock, described in the shelf registration. Short-Term Debt. The components of short-term debt were as follows: March 31, 2026 December 31, 2025 (in millions) Other recourse short-term debt $ 18.2 $ 27.7 Total short-term debt $ 18.2 $ 27.7 The short-term credit facilities are used for general corporate purposes and borrowings outstanding can fluctuate as part of working capital management. Long-Term Debt. As of March 31, 2026, no significant changes have occurred to long-term debt since December 31, 2025. Contingent Funding Agreements for Senior Debt Issuance. On March 6, 2025, we entered into a contingent funding agreement that gives us the right at any time over a thirty-year period to issue up to $500.0 million of senior notes. In March 2018, we entered into a contingent funding agreement that gives us the right at any time over a thirty-year period to issue up to $350.0 million of senior notes. 118 Table of Contents Stockholders’ Equity. The following table summarizes our return of capital to common stockholders. For the three months ended For the year ended March 31, 2026 December 31, 2025 ($ in millions) Dividends to stockholders $ 173.5 $ 684.0 Repurchase of common stock (1) 235.9 901.3 Total cash returned to common stockholders $ 409.4 $ 1,585.3 (1) Includes common stock utilized to execute certain stock incentive awards and shares purchased as part of publicly announced programs. In February 2024, our 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 $1.5 billion of our outstanding common stock, which has no expiration date. See Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds,” for information about our share repurchase authorizations. For additional stockholders’ equity information, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 14, Stockholders’ Equity.” Capitalization The following table summarizes our capital structure: March 31, 2026 December 31, 2025 ($ in millions) Debt: Short-term debt $ 18.2 $ 27.7 Long-term debt 3,927.7 3,926.3 Total debt 3,945.9 3,954.0 Total stockholders’ equity attributable to PFG 11,815.3 11,883.9 Total capitalization $ 15,761.2 $ 15,837.9 Debt to equity 33 % 33 % Debt to capitalization 25 % 25 % Contractual Obligations and Contractual Commitments As of March 31, 2026, we had no unique material cash requirements from known contractual and other obligations. Off-Balance Sheet Arrangements Variable Interest Entities. We have relationships with various types of special purpose entities and other entities where we have a variable interest as described in Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 2, Variable Interest Entities.” We have made commitments to fund certain limited partnerships, some of which are classified as unconsolidated variable interest entities. Guarantees and Indemnifications. As of March 31, 2026, no significant changes to guarantees and indemnifications have occurred since December 31, 2025. For guarantee and indemnification information, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 13, Contingencies, Guarantees and Indemnifications” under the caption, “Guarantees and Indemnifications.” Financial Strength and Credit Ratings Our ratings are influenced by the relative ratings of our peers/competitors as well as many other factors including our operating and financial performance, capital levels, asset quality, liquidity, asset/liability management, overall portfolio mix, financial leverage (i.e., debt), risk exposures, operating leverage and other factors. 119 Table of Contents We have had no significant changes or actions in ratings and rating outlooks that have occurred from January 1, 2026, through the date of this filing. The following table summarizes our significant financial strength and debt ratings from the major independent rating organizations. A rating is not a recommendation to buy, sell or hold securities. Such a rating may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. A.M. Best Fitch Moody’s S&P Last review date April 2025 May 2025 June 2025 April 2025 Current outlook Stable Stable Stable Stable Principal Financial Group Senior Unsecured Debt a A- Baa1 A- Long-Term Issuer Default Rating A Principal Life Insurance Company Insurer Financial Strength A+ AA- A1 A+ Issuer Credit Rating aa Commercial Paper AMB‑1+ P-1 A-1+ Principal National Life Insurance Company Insurer Financial Strength A+ AA- A1 A+ Fair Value Measurement 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 fair value hierarchy gives the highest priority (Level 1) to unadjusted quoted prices in active markets for identical assets or liabilities and gives the lowest priority (Level 3) to unobservable inputs. 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. See Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 15, Fair Value Measurements” for further details, including a reconciliation of changes in Level 3 fair value measurements. As of March 31, 2026, 46% of our net assets (liabilities) were Level 1, 51% were Level 2 and 3% were Level 3. Excluding separate account assets as of March 31, 2026, 4% of our net assets (liabilities) were Level 1, 88% were Level 2 and 8% were Level 3. As of December 31, 2025, 46% of our net assets (liabilities) were Level 1, 51% were Level 2 and 3% were Level 3. Excluding separate account assets as of December 31, 2025, 3% of our net assets (liabilities) were Level 1, 89% were Level 2 and 8% were Level 3. Changes in Level 3 Fair Value Measurements Net assets (liabilities) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of March 31, 2026, were $7,308.9 million as compared to $7,042.6 million as of December 31, 2025. The increase was primarily due to an increase in the funds withheld payable embedded derivative net asset and an increase in fixed maturities, available-for-sale resulting from net purchases and net transfers into Level 3. Investments We had total consolidated assets as of March 31, 2026 , of $332,704.5 m illion, of which $110,857.6 m illion were invested assets. A portion of our invested assets represent funds withheld backing reserves as part of coinsurance with funds withheld reinsurance agreements. The funds withheld assets and associated net investment income and net realized capital gains (losses) are not included in the discussions below as the investment risk is passed to the reinsurer. See Item 1. “ Financial Statements , Notes to Unaudited Condensed Consolidated Financial Statements, Note 10, Reinsurance ” for more information on the funds withheld assets. The rest of our total consolidated assets are comprised primarily of separate account assets for which we do not bear investment risk; therefore, the discussion and financial information below does not include such assets. 120 Table of Contents Overall Composition of Invested Assets Invested assets as of March 31, 2026, were predominantly high quality and broadly diversified across asset class, individual credit, industry and geographic location. Asset allocation is determined based on cash flow and the risk/return requirements of our products. As shown in the following table, the major categories of invested assets are fixed maturities and mortgage loans. March 31, 2026 Investments excluding Funds funds withheld withheld Total (in millions) Fixed maturities $ 61,342.4 $ 12,836.3 $ 74,178.7 Equity securities 2,341.6 0.3 2,341.9 Mortgage loans 19,099.8 2,028.2 21,128.0 Real estate 2,406.8 — 2,406.8 Policy loans 873.1 — 873.1 Other investments 8,144.7 1,784.4 9,929.1 Total invested assets 94,208.4 16,649.2 110,857.6 Cash and cash equivalents 3,235.5 818.5 4,054.0 Total invested assets and cash $ 97,443.9 $ 17,467.7 $ 114,911.6 December 31, 2025 Investments excluding Funds funds withheld withheld Total (in millions) Fixed maturities $ 61,025.1 $ 13,579.4 $ 74,604.5 Equity securities 2,237.0 0.3 2,237.3 Mortgage loans 19,005.4 2,002.9 21,008.3 Real estate 2,409.7 — 2,409.7 Policy loans 866.7 — 866.7 Other investments 8,066.3 1,708.7 9,775.0 Total invested assets 93,610.2 17,291.3 110,901.5 Cash and cash equivalents 3,883.2 547.8 4,431.0 Total invested assets and cash $ 97,493.4 $ 17,839.1 $ 115,332.5 Investment Results Net Investment Income The following table presents the yield and investment income, excluding net realized capital gains and losses, for our invested assets for the periods indicated. We calculate annualized yields using a simple average of asset classes at the beginning and end of the reporting period. The yields for available-for-sale fixed maturities are calculated using amortized cost. All other yields are calculated using carrying amounts. For the three months ended March 31, 2026 2025 Increase (decrease) Yield Amount Yield Amount Yield Amount ($ in millions) Fixed maturities 4.8 % $ 767.0 5.1 % $ 760.3 (0.3) % $ 6.7 Equity securities 6.9 39.5 6.8 40.0 0.1 (0.5) Mortgage loans – commercial 4.5 161.1 4.5 161.6 — (0.5) Mortgage loans – residential 5.0 59.4 6.2 57.5 (1.2) 1.9 Real estate 4.3 26.2 6.8 41.9 (2.5) (15.7) Policy loans 5.3 11.5 5.2 11.3 0.1 0.2 Cash and cash equivalents 5.3 46.9 6.9 50.9 (1.6) (4.0) Other investments 7.7 155.2 6.0 104.3 1.7 50.9 Total 5.1 1,266.8 5.3 1,227.8 (0.2) 39.0 Investment expenses (0.3) (67.8) (0.3) (62.1) — (5.7) Net investment income 4.8 % $ 1,199.0 5.0 % $ 1,165.7 (0.2) % $ 33.3 121 Table of Contents Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Net investment income increased primarily due to higher average invested assets in fixed maturities, derivatives in fair value hedges, and other investments for our U.S. operations. These increases were partially offset by lower inflation-based returns on average invested assets and cash in Latin America. Net Realized Capital Gains (Losses) The following table presents the contributors to net realized capital gains and losses for the periods indicated. The amounts below do not include net realized capital gains (losses) on funds withheld assets that are not passed to the reinsurer, which are separately reported on the consolidated statements of operations. For the three months ended March 31, Increase 2026 2025 (decrease) (in millions) Fixed maturities, available-for-sale – credit losses, including credit sales (1) $ (32.4) $ (5.0) $ (27.4) Commercial mortgage loans – credit gains 1.2 0.6 0.6 Other – credit gains (losses) 0.3 (1.1) 1.4 Fixed maturities, available-for-sale and trading – noncredit (1.0) (31.3) 30.3 Derivatives and related hedge activities (18.7) 27.5 (46.2) Other losses (71.5) (107.8) 36.3 Net realized capital losses (2) $ (122.1) $ (117.1) $ (5.0) (1) Includes credit sales, adjustments to the credit loss valuation allowance, write-offs and recoveries on available-for-sale securities. (2) Net realized capital gains (losses) can be volatile due to credit losses from invested assets, mark-to-market adjustments of certain invested assets and our decision to sell invested assets. Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Net realized capital losses increased primarily due to losses versus gains on GMWB/RILA activities and increased credit losses from available-for-sale fixed maturities. These increases were partially offset by a held-for-sale write-down of an intangible asset in 2025, increased gains on currency derivatives, reduced losses from noncredit available-for-sale fixed maturities and reduced losses on non-hedged interest rate derivatives due to changes in rates. U.S. Investment Operations In the following sections, we provide details about U.S. Investment Operations, excluding investments held as part of coinsurance with funds withheld agreements. We believe the details of the composition of our investment portfolio excluding the funds withheld are most relevant to an understanding of our operations that are pertinent to investors because all funds withheld assets support obligations and liabilities relating to reinsurance agreements. Guidelines are in place to ensure the investment risk associated with these fund withheld assets are appropriately managed. See Note 10, Reinsurance, for further information on the funds withheld assets. Of our invested assets, $87,685.4 million were held by our U.S. operations as of March 31, 2026. Our U.S. invested assets are managed primarily by Principal Asset Management–Investment Management. Our Investment Committee, appointed by our Board, is responsible for establishing investment policies and monitoring risk limits and tolerances. Our primary investment objective is to maximize after-tax returns consistent with acceptable risk parameters. We seek to protect customers’ benefits by optimizing the risk/return relationship on an ongoing basis, through asset/liability matching, reducing credit risk, avoiding high levels of investments that may be redeemed by the issuer, maintaining sufficiently liquid investments and avoiding undue asset concentrations through diversification. We are exposed to two primary sources of investment risk: ● credit risk, relating to the uncertainty associated with the continued ability of an obligor to make timely payments of principal and interest and ● interest rate risk, relating to the market price and/or cash flow variability associated with changes in market yield curves. Our ability to manage credit risk is essential to our business and our profitability. We devote considerable resources to the credit analysis of each new investment. We manage credit risk through industry, issuer and asset class diversification. 122 Table of Contents A dedicated committee, comprised of senior investment professional staff members, approves the credit rating for the fixed maturities we purchase. We have teams of security analysts, organized by industry and asset class, that analyze and monitor these investments. Investments held in the portfolio are monitored on a continuous basis with a formal review annually or more frequently if material events affect the issuer. The analysis includes both fundamental and technical factors. The fundamental analysis encompasses both quantitative and qualitative analysis of the issuer. The qualitative analysis includes an assessment of both accounting and management aggressiveness of the issuer. In addition, technical indicators such as stock price volatility and credit default swap levels are monitored. We regularly review our investments to determine whether we should re-rate them, employing the following criteria: ● material changes in the issuer’s revenues, margins, capital structure or collateral values; ● significant management or organizational changes; ● significant changes regarding the issuer’s industry; ● debt service coverage or cash flow ratios that fall below industry-specific thresholds; ● violation of financial covenants and ● other business factors that relate to the issuer. We purchase credit default swaps to hedge certain credit exposures in our investment portfolio. We economically hedged credit exposure in our portfolio by purchasing credit default swaps with a notional amount of $84.9 million and $85.0 million as of March 31, 2026 and December 31, 2025, respectively. We sell credit default swaps and total return swaps to offer credit protection to investors when entering into synthetic replicating transactions. When selling credit protection, if there is an event of default by the referenced name, we are obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced security. When selling total return swaps, if there is an event of default by the referenced name, we are obligated to compensate the protection buyer for any decline in the price of the referenced security. For further information on credit derivatives sold, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 4, Derivative Financial Instruments” under the caption, “Credit Derivatives Sold.” Our use of derivatives exposes us to counterparty risk, or the risk that the counterparty fails to perform the terms of the derivative contract. We actively manage this risk by: ● obtaining approval of all new counterparties by the Investment Committee; ● establishing exposure limits that take into account non-derivative exposure we have with the counterparty as well as derivative exposure; ● performing similar credit analysis prior to approval on each derivatives counterparty that we do when lending money on a long-term basis; ● diversifying our risk across numerous approved counterparties; ● implementing credit support annex (collateral) agreements (“CSAs”) for over-the-counter derivative transactions or similar agreements with a majority of our counterparties to further limit counterparty exposures, which provide for netting of exposures; ● limiting exposure to A credit or better for over-the-counter derivative counterparties without CSAs; ● conducting stress-test analysis to determine the maximum exposure created during the life of a prospective transaction; ● daily monitoring of counterparty credit ratings, exposures and associated collateral levels and ● trading mandatorily cleared contracts through centralized clearinghouses. We manage our exposure on a net basis, whereby we net positive and negative exposures for each counterparty with agreements in place. For further information on derivative exposure, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 3, Investments” under the caption, “Balance Sheet Offsetting.” 123 Table of Contents A dedicated risk management team is responsible for centralized monitoring of the commercial mortgage loan portfolio. We apply a variety of guidelines to minimize credit risk in our commercial mortgage loan portfolio. When considering new commercial mortgage loans, we review the cash flow fundamentals of the property, make a physical assessment of the underlying commercial real estate, conduct a comprehensive market analysis and compare against industry lending practices. We use a proprietary risk rating model to evaluate all new and substantially all existing loans within the portfolio. The proprietary risk model is designed to stress projected cash flows under simulated economic and market downturns. Our lending guidelines are typically 75% or less loan-to-value ratio and a debt service coverage ratio of at least 1.2 times. We analyze investments outside of these guidelines based on cash flow quality, tenancy and other factors. The following table presents loan-to-value and debt service coverage ratios for our brick and mortar commercial mortgage loans: Weighted average loan-to-value ratio Debt service coverage ratio March 31, 2026 December 31, 2025 March 31, 2026 December 31, 2025 New mortgages 48 % 50 % 1.8 x 1.9 x Entire mortgage portfolio 48 % 49 % 2.3 x 2.3 x We also seek to manage call or prepayment risk arising from changes in interest rates. We assess and price for call or prepayment risks in all of our investments and monitor these risks in accordance with asset/liability management policies. The amortized cost and weighted average yield, calculated using amortized cost, of non-structured fixed maturity securities that will be callable at the option of the issuer, excluding securities with a make-whole provision, were $4,249.1 million and 4.8%, respectively, as of March 31, 2026, and $3,990.4 million and 4.8%, respectively, as of December 31, 2025. In addition, the amortized cost and weighted average yield of RMBS, residential collateralized mortgage obligations, and asset-backed securities - home equity with material prepayment risk were $9,156.1 million and 4.2%, respectively, as of March 31, 2026, and $9,021.4 million and 4.2%, respectively, as of December 31, 2025. Our investment decisions and objectives are a function of the underlying risks and product profiles of each primary business operation. In addition, we diversify our product portfolio offerings to include products that contain features that will protect us against fluctuations in interest rates. Those features include adjustable crediting rates, policy surrender charges and market value adjustments on liquidations. For further information on our management of interest rate risk, see Item 3. “Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk.” Overall Composition of U.S. Invested Assets As shown in the following table, the major categories of U.S. invested assets are fixed maturities and mortgage loans. March 31, 2026 December 31, 2025 Carrying amount % of total Carrying amount % of total ($ in millions) Fixed maturities $ 58,749.8 67 % $ 58,379.1 67 % Equity securities 1,496.3 2 1,349.6 2 Mortgage loans 18,226.1 21 18,054.4 21 Real estate 2,399.9 3 2,408.4 3 Policy loans 857.7 1 850.5 1 Other investments 5,955.6 6 5,885.3 6 Total invested assets 87,685.4 100 % 86,927.3 100 % Cash and cash equivalents 2,925.8 3,576.5 Total invested assets and cash $ 90,611.2 $ 90,503.8 124 Table of Contents Fixed Maturities Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities that were diversified by category of issuer, as shown in the following table for the periods indicated. March 31, 2026 December 31, 2025 Carrying Percent Carrying Percent amount of total amount of total ($ in millions) U.S. government and agencies $ 1,431.5 2 % $ 1,359.6 2 % Non-U.S. governments 390.8 1 407.3 1 States and political subdivisions 6,147.0 10 5,908.8 10 Corporate - public 12,490.4 21 12,932.1 22 Corporate - private 16,040.0 27 15,681.9 27 Residential mortgage-backed pass-through securities 3,749.2 6 3,803.0 7 Commercial mortgage-backed securities 4,953.4 8 4,728.8 8 Residential collateralized mortgage obligations 4,964.8 8 4,835.2 8 Asset-backed securities 8,582.7 15 8,722.4 15 Total fixed maturities $ 58,749.8 100 % $ 58,379.1 100 % We believe it is desirable to hold residential mortgage-backed pass-through securities due to their credit quality and liquidity as well as portfolio diversification characteristics. Our portfolio is comprised of Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation pass-through securities. In addition, our residential collateralized mortgage obligation portfolio offers structural features that allow cash flows to be matched to our liabilities. We purchase CMBS to diversify the overall credit risks of the fixed maturities portfolio and to provide attractive returns. The primary risks in holding CMBS are structural and credit risks. Structural risks include the security’s priority in the issuer’s capital structure, the adequacy of and ability to realize proceeds from the collateral and the potential for prepayments. Credit risks involve collateral and issuer/servicer risk where collateral and servicer performance may deteriorate. CMBS are predominantly comprised of large pool securitizations that are diverse by property type, borrower and geographic dispersion. The risks to any CMBS deal are determined by the credit quality of the underlying loans and how those loans perform over time. Another key risk is the vintage of the underlying loans and the state of the markets during a particular vintage. Similar to CMBS, we purchase ABS for diversification and to provide attractive returns. The primary risks in holding ABS are also structural and credit risks, which are similar to those noted above for CMBS. Our ABS portfolio is diversified by type of asset, issuer, and vintage. We actively monitor holdings of ABS to recognize adverse changes in the risk profile of each security. Prepayments in the ABS portfolio are, in general, insensitive to changes in interest rates or are insulated from such changes by call protection features. In the event we are subject to prepayment risk, we monitor the factors that impact the level of prepayment and prepayment speed for those ABS. In addition, we hold a diverse class of securities, which limits our exposure to any one security. The international exposure held in our U.S. operation’s fixed maturities portfolio was 14% of total fixed maturities as of both March 31, 2026, and December 31, 2025. It is comprised of corporate and foreign government fixed maturities. March 31, 2026 December 31, 2025 (in millions) European Union $ 2,423.9 $ 2,489.8 United Kingdom 1,592.3 1,674.2 Australia/New Zealand 1,500.8 1,515.2 Latin America 982.0 1,031.7 Middle East and Africa 509.4 524.7 Asia-Pacific 452.2 480.3 Europe, non-European Union 331.1 348.5 Other 207.0 208.3 Total $ 7,998.7 $ 8,272.7 125 Table of Contents International fixed maturities exposure is determined by the country of risk of the obligor entity. All international fixed maturities held by our U.S. operations are either denominated in U.S. dollars or have been swapped into U.S. dollar equivalents. Our international investments are analyzed internally by country and industry credit investment professionals. We control concentrations using issuer and country level exposure benchmarks, which are based on the credit quality of the issuer and the country. Our investment policy limits total international fixed maturities investments and we are within those internal limits. Exposure to Canada is not included in our international exposure. As of March 31, 2026 and December 31, 2025, our investments in Canada totaled $929.0 million and $938.0 million, respectively. Fixed Maturities Credit Concentrations. One aspect of managing credit risk is through industry, issuer and asset class diversification. Our credit concentrations are managed to established limits. The top 10 exposures comprised 5.5% of single-name credit fixed maturity exposures as of March 31, 2026, and 5.5% as of December 31, 2025. Fixed Maturities Valuation and Credit Quality. Valuation techniques for the fixed maturities portfolio vary by security type and the availability of market data. The use of different pricing techniques and their assumptions could produce different financial results. See Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 15, Fair Value Measurements” for further details regarding our pricing methodology. Once prices are determined, they are reviewed by pricing analysts for reasonableness based on asset class and observable market data. Investment analysts who are familiar with specific securities review prices for reasonableness through direct interaction with external sources, review of recent trade activity or use of internal models. All fixed maturities placed on the “watch list” are periodically analyzed by investment analysts. These analysts periodically meet with the Chief Investment Officer and the Portfolio Managers to determine reasonableness of the analysts’ prices. The valuation of bonds for which a credit loss exists and there is no quoted price is typically based on relative value analysis and the present value of the future cash flows expected to be received. Although we believe these values reasonably reflect the fair value of those securities, the key assumptions about risk premiums, performance of underlying collateral (if any) and other market factors involve qualitative and unobservable inputs. The Securities Valuation Office (“SVO”) of the National Association of Insurance Commissioners (“NAIC”) monitors the bond investments of insurers for regulatory capital and reporting purposes and, when required, assigns securities to one of six categories referred to as NAIC designations. Although NAIC designations are not produced to aid the investment decision making process, NAIC designations may serve as a reasonable proxy for Nationally Recognized Statistical Rating Organizations’ (“NRSRO”) credit ratings for certain bonds. For most corporate bonds, NAIC designations 1 and 2 include bonds generally considered investment grade by such rating organizations. Bonds are considered investment grade when rated “Baa3” or higher by Moody’s, or “BBB-” or higher by S&P. NAIC designations 3 through 6 include bonds generally referred to as below investment grade. Bonds are considered below investment grade when rated “Ba1” or lower by Moody’s, or “BB+” or lower by S&P. For loan-backed and structured securities, as defined by the NAIC, the NAIC designation is not always a reasonable indication of an NRSRO rating as described below. For CMBS and non-agency RMBS, Blackrock Solutions undertakes the modeling of those NAIC designations. This may result in a final designation being higher or lower than the NRSRO credit rating. The following table presents our total fixed maturities by NAIC designation as of the periods indicated as well as the percentage, based on fair value, that each designation comprises. March 31, 2026 December 31, 2025 Percent of Percent of Amortized Carrying carrying Amortized Carrying carrying NAIC designation cost amount amount cost amount amount ($ in millions) 1 $ 42,462.6 $ 40,155.8 68 % $ 41,717.4 $ 39,743.7 68 % 2 15,798.9 15,200.5 26 15,901.2 15,501.2 27 3 2,937.8 2,884.2 5 2,724.7 2,679.3 4 4 407.7 377.0 1 321.7 313.1 1 5 161.3 118.8 — 196.3 137.1 — 6 25.8 13.5 — 7.0 4.7 — Unallocated portfolio layer method basis adjustment (1) (18.8) — — (16.9) — — Total fixed maturities $ 61,775.3 $ 58,749.8 100 % $ 60,851.4 $ 58,379.1 100 % (1) Amounts represent unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method. 126 Table of Contents Fixed maturities included 77 securities with an amortized cost of $854.4 million, gross gains of $12.5 million, gross losses of $6.0 million, valuation allowance of $2.2 million and a carrying amount of $858.7 million as of March 31, 2026, that were still pending a review and assignment of a designation by the SVO or NRSRO ratings to be assigned. Due to the timing of when fixed maturities are purchased, legal documents are filed and the review by the SVO is completed, or NRSRO ratings that have expired or been withdrawn, we will always have securities in our portfolio that are unrated over a reporting period. In these instances, an equivalent designation is assigned based on our fixed income analyst’s assessment. Commercial Mortgage-Backed Securities. As of March 31, 2026, based on amortized cost, 96% of our CMBS portfolio had an NAIC designation of 1. The following table presents our exposure by credit quality based on NAIC designations for our CMBS portfolio as of the periods indicated. March 31, 2026 December 31, 2025 Amortized Carrying Amortized Carrying NAIC designation cost amount cost amount (in millions) 1 $ 4,998.0 $ 4,770.8 $ 4,751.7 $ 4,547.3 2 130.2 114.3 128.8 113.5 3 57.0 46.9 61.0 50.1 4 16.5 13.9 12.8 10.5 5 8.0 5.0 8.0 4.9 6 4.2 2.5 4.3 2.5 Total (1) $ 5,213.9 $ 4,953.4 $ 4,966.6 $ 4,728.8 (1) Amortized cost amounts of our CMBS portfolio exclude unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method. The CMBS portfolio included agency CMBS with a $488.9 million amortized cost and a $474.6 million carrying amount as of March 31, 2026, and a $497.9 million amortized cost and a $484.7 million carrying amount as of December 31, 2025. Fixed Maturities Watch List. We monitor any decline in the credit quality of fixed maturities through the designation of “problem securities,” “potential problem securities” and “restructured securities”. We define problem securities in our fixed maturity portfolio as securities: (i) with principal and/or interest payments in default or where default is perceived to be imminent in the near term, or (ii) issued by a company that went into bankruptcy subsequent to the acquisition of such securities. We define potential problem securities in our fixed maturity portfolio as securities included on an internal “watch list” for which management has concerns as to the ability of the issuer to comply with the present debt payment terms and which may result in the security becoming a problem or being restructured. The decision whether to classify a performing fixed maturity security as a potential problem involves significant subjective judgments by our management as to the likely future industry conditions and developments with respect to the issuer. We define restructured securities in our fixed maturity portfolio as securities where a concession has been granted to the borrower related to the borrower’s financial difficulties that would not have otherwise been considered. We determine that restructures should occur in those instances where greater economic value will be realized under the new terms than through liquidation or other disposition and may involve a change in contractual cash flows. If the present value of the restructured cash flows is less than the current cost of the asset being restructured, a realized capital loss is recorded in net income and a new cost basis is established. The following table presents the total carrying amount of our fixed maturities portfolio, as well as its problem, potential problem and restructured fixed maturities for the periods indicated. March 31, 2026 December 31, 2025 ($ in millions) Total fixed maturities $ 58,749.8 $ 58,379.1 Problem fixed maturities (1) $ 142.1 $ 113.2 Potential problem fixed maturities 3.4 36.4 Total problem, potential problem and restructured fixed maturities $ 145.5 $ 149.6 Total problem, potential problem and restructured fixed maturities as a percent of total fixed maturities 0.25 % 0.26 % (1) The problem fixed maturities carrying amount is net of the credit loss valuation allowance. 127 Table of Contents Fixed Maturities Credit Losses. Each reporting period, a group of individuals including the Chief Investment Officer, our Portfolio Managers, the assigned analysts and representatives from Investment Accounting review all securities to determine whether a credit loss exists. The analysis focuses on each issuer’s ability to service its debts in a timely fashion. Formal documentation of the analysis and our decision is prepared and approved by management. For additional details regarding our process to identify and evaluate securities with credit losses, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 3, Investments” under the caption, “Allowance for Credit Loss.” We would not consider a security with unrealized losses to have a decline in value due to credit when it is not our intent to sell the security, it is not more likely than not that we would be required to sell the security before recovery of the amortized cost, which may be maturity, and we expect to recover the amortized cost basis. However, we do sell securities under certain circumstances, such as when we have evidence of a change in the issuer’s creditworthiness, when we anticipate poor relative future performance of securities, when a change in regulatory requirements modifies what constitutes a permissible investment or the maximum level of investments held or when there is an increase in capital requirements or a change in risk weights of debt securities. Sales generate both gains and losses. A number of significant risks and uncertainties are inherent in the process of monitoring credit losses and determining the allowance for credit loss. These risks and uncertainties include: (1) the risk that our assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer, (2) the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated, (3) the risk that our investment professionals are making decisions based on fraudulent or misstated information in the financial statements provided by issuers and (4) the risk that new information obtained by us or changes in other facts and circumstances lead us to change our intent to not sell the security prior to recovery of its amortized cost. Any of these situations could result in a charge to net income in a future period. The net realized loss relating to the change in the allowance for credit loss and credit related sales of fixed maturities was $32.4 million and $5.0 million for the three months ended March 31, 2026 and 2025, respectively. 128 Table of Contents Fixed Maturities Available-For-Sale The following tables present our fixed maturities available-for-sale by industry category, as of the periods indicated. March 31, 2026 Gross Gross Allowance Amortized unrealized unrealized for credit Carrying cost gains losses loss amount (in millions) Finance — Banking $ 1,440.9 $ 11.0 $ 104.5 $ 3.5 $ 1,343.9 Finance — Brokerage 997.5 9.9 101.2 — 906.2 Finance — Finance Companies 382.5 3.3 18.6 — 367.2 Finance — Financial Other 1,777.5 42.7 73.8 3.1 1,743.3 Finance — Insurance 1,985.7 30.9 193.2 — 1,823.4 Finance — Real estate investment trusts (“REITs”) 1,683.7 0.9 118.4 — 1,566.2 Industrial — Basic Industry 1,320.4 28.5 69.2 7.6 1,272.1 Industrial — Capital Goods 1,495.3 15.7 91.8 — 1,419.2 Industrial — Communications 2,505.5 52.0 153.3 — 2,404.2 Industrial — Consumer Cyclical 896.7 6.9 56.5 12.7 834.4 Industrial — Consumer Non-Cyclical 3,195.1 26.0 208.8 7.2 3,005.1 Industrial — Energy 2,114.3 60.7 101.3 — 2,073.7 Industrial — Other 1,116.6 32.0 17.6 — 1,131.0 Industrial — Technology 1,527.0 14.4 130.5 2.3 1,408.6 Industrial — Transportation 2,381.5 34.1 128.9 — 2,286.7 Utility — Electric 3,455.4 45.8 306.9 11.0 3,183.3 Utility — Natural Gas 485.1 5.5 51.0 — 439.6 Utility — Other 549.3 11.8 35.1 0.2 525.8 Government guaranteed 333.8 11.4 14.9 — 330.3 Total corporate securities 29,643.8 443.5 1,975.5 47.6 28,064.2 Residential mortgage-backed pass-through securities 3,831.1 35.0 125.0 — 3,741.1 Commercial mortgage-backed securities 5,143.3 9.1 268.0 1.6 4,882.8 Residential collateralized mortgage obligations 5,175.3 24.8 319.5 0.4 4,880.2 Asset-backed securities — Home equity (1) 49.9 2.5 3.2 — 49.2 Asset-backed securities — All other 3,785.1 25.5 18.2 — 3,792.4 Collateralized debt obligations — Credit 16.4 — 4.9 — 11.5 Collateralized debt obligations — Loans 4,475.7 3.3 5.8 — 4,473.2 Total mortgage-backed and other asset-backed securities 22,476.8 100.2 744.6 2.0 21,830.4 U.S. government and agencies 1,504.1 5.4 78.1 0.1 1,431.3 States and political subdivisions 6,861.8 27.8 743.4 — 6,146.2 Non-U.S. governments 419.7 14.9 44.8 — 389.8 Total fixed maturities, available-for-sale excluding portfolio layer method basis adjustment 60,906.2 591.8 3,586.4 49.7 57,861.9 Unallocated portfolio layer method basis adjustment (18.8) 18.8 — — — Total fixed maturities, available-for-sale $ 60,887.4 $ 610.6 $ 3,586.4 $ 49.7 $ 57,861.9 (1) This exposure is all related to sub-prime mortgage loans. 129 Table of Contents December 31, 2025 Gross Gross Allowance Amortized unrealized unrealized for credit Carrying cost gains losses loss amount (in millions) Finance — Banking $ 1,552.2 $ 17.9 $ 89.1 $ — $ 1,481.0 Finance — Brokerage 953.9 12.5 83.6 — 882.8 Finance — Finance Companies 342.7 4.3 17.0 — 330.0 Finance — Financial Other 1,725.5 44.7 71.0 3.1 1,696.1 Finance — Insurance 2,000.6 43.7 166.9 — 1,877.4 Finance — REITs 1,732.8 3.9 104.1 — 1,632.6 Industrial — Basic Industry 1,323.2 36.9 62.7 7.6 1,289.8 Industrial — Capital Goods 1,476.1 26.3 87.9 — 1,414.5 Industrial — Communications 2,435.8 66.9 135.2 — 2,367.5 Industrial — Consumer Cyclical 876.2 10.4 59.2 3.5 823.9 Industrial — Consumer Non-Cyclical 3,094.2 32.4 180.0 2.0 2,944.6 Industrial — Energy 2,130.4 75.4 91.2 — 2,114.6 Industrial — Other 1,094.3 37.7 16.2 0.9 1,114.9 Industrial — Technology 1,529.9 20.2 117.5 5.3 1,427.3 Industrial — Transportation 2,407.0 53.0 119.1 — 2,340.9 Utility — Electric 3,443.0 63.3 276.6 — 3,229.7 Utility — Natural Gas 491.5 8.6 47.2 — 452.9 Utility — Other 514.1 11.3 31.5 — 493.9 Government guaranteed 273.5 11.7 11.9 — 273.3 Total corporate securities 29,396.9 581.1 1,767.9 22.4 28,187.7 Residential mortgage-backed pass-through securities 3,857.1 54.6 117.1 — 3,794.6 Commercial mortgage-backed securities 4,895.9 16.8 253.2 1.4 4,658.1 Residential collateralized mortgage obligations 5,010.1 40.6 302.7 0.4 4,747.6 Asset-backed securities — Home equity (1) 50.9 2.7 2.9 — 50.7 Asset-backed securities — All other 3,530.7 42.6 15.0 — 3,558.3 Collateralized debt obligations — Credit 16.5 — 5.0 — 11.5 Collateralized debt obligations — Loans 4,835.7 8.8 1.5 — 4,843.0 Total mortgage-backed and other asset-backed securities 22,196.9 166.1 697.4 1.8 21,663.8 U.S. government and agencies 1,415.6 9.4 65.5 0.1 1,359.4 States and political subdivisions 6,577.7 42.7 712.6 — 5,907.8 Non-U.S. governments 427.2 17.3 38.1 — 406.4 Total fixed maturities, available-for-sale excluding portfolio layer method basis adjustment 60,014.3 816.6 3,281.5 24.3 57,525.1 Unallocated portfolio layer method basis adjustment (16.9) 16.9 — — — Total fixed maturities, available-for-sale $ 59,997.4 $ 833.5 $ 3,281.5 $ 24.3 $ 57,525.1 (1) This exposure is all related to sub-prime mortgage loans. Of the $3,586.4 million in gross unrealized losses as of March 31, 2026, $17.6 million in losses were attributed to securities scheduled to mature in one year or less, $220.7 million attributed to securities scheduled to mature between one to five years, $309.9 million attributed to securities scheduled to mature between five to ten years, $2,293.6 million attributed to securities scheduled to mature after ten years and $744.6 million related to mortgage-backed and other ABS that are not classified by maturity year. As of March 31, 2026, we were in a $2,975.8 million net unrealized loss position as compared to a $2,448.0 million net unrealized loss position as of December 31, 2025. The $527.8 million increase in net unrealized losses for the three months ended March 31, 2026, can be attributed to an increase in interest rates and widening of credit spreads. 130 Table of Contents Fixed Maturities Available-For-Sale Unrealized Losses. We believe our long-term fixed maturities portfolio is well diversified among industry types and between publicly traded and privately placed securities. Each year, we direct the majority of our net cash inflows into investment grade fixed maturities. Our current policy is to limit the percentage of fixed maturities invested in below investment grade assets to 15%. We invest in privately placed fixed maturities to enhance the overall value of the portfolio, increase diversification and obtain higher yields than are possible with comparable quality public market securities. Generally, private placements provide broader access to management information, strengthened negotiated protective covenants, call protection features and, where applicable, a higher level of collateral. They are, however, generally not freely tradable because of restrictions imposed by U.S. federal and state securities laws and illiquid trading markets. The following table presents our fixed maturities available-for-sale by investment grade and below investment grade as of the periods indicated. March 31, 2026 December 31, 2025 Gross Gross Allowance Gross Gross Allowance Amortized unrealized unrealized for credit Carrying Amortized unrealized unrealized for credit Carrying cost gains losses loss amount cost gains losses loss amount (in millions) Investment grade: Public $ 42,715.8 $ 284.5 $ 2,786.2 $ 0.4 $ 40,213.7 $ 42,313.3 $ 431.0 $ 2,535.2 $ 0.5 $ 40,208.6 Private 15,002.3 272.9 676.0 — 14,599.2 14,747.7 353.9 622.9 — 14,478.7 Below investment grade: Public 849.0 4.2 93.0 17.6 742.6 833.3 6.1 89.3 9.0 741.1 Private 2,339.1 30.2 31.2 31.7 2,306.4 2,120.0 25.6 34.1 14.8 2,096.7 Total fixed maturities, available-for-sale (1) $ 60,906.2 $ 591.8 $ 3,586.4 $ 49.7 $ 57,861.9 $ 60,014.3 $ 816.6 $ 3,281.5 $ 24.3 $ 57,525.1 (1) Excludes unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method. Included in the public category carrying amount as of March 31, 2026 and December 31, 2025, were $16,440.9 million and $16,411.2 million, respectively, of securities subject to certain holding periods and resale restrictions pursuant to Rule 144A of the Securities Act of 1933. 131 Table of Contents The following tables present the fair value and the gross unrealized losses on our fixed maturities available-for-sale for which an allowance for credit loss has not been recorded by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2026 and December 31, 2025, respectively. March 31, 2026 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1): U.S. government and agencies $ 600.5 $ 13.1 $ 476.6 $ 65.0 $ 1,077.1 $ 78.1 Non-U.S. governments 29.4 1.1 197.4 43.7 226.8 44.8 States and political subdivisions 1,294.5 14.7 3,627.0 728.7 4,921.5 743.4 Corporate 3,801.9 85.1 12,047.8 1,882.1 15,849.7 1,967.2 Residential mortgage-backed pass-through securities 732.6 6.4 1,009.9 118.6 1,742.5 125.0 Commercial mortgage-backed securities 1,232.9 11.9 2,744.4 255.4 3,977.3 267.3 Collateralized debt obligations (2) 2,335.4 5.1 34.1 5.5 2,369.5 10.6 Other debt obligations 2,289.9 13.9 2,436.4 327.1 4,726.3 341.0 Total fixed maturities, available-for-sale $ 12,317.1 $ 151.3 $ 22,573.6 $ 3,426.1 $ 34,890.7 $ 3,577.4 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. Gross unrealized losses exclude unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. December 31, 2025 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1): U.S. government and agencies $ 375.0 $ 7.5 $ 464.1 $ 58.0 $ 839.1 $ 65.5 Non-U.S. governments 12.8 0.3 207.5 37.8 220.3 38.1 States and political subdivisions 605.8 6.5 3,707.6 706.1 4,313.4 712.6 Corporate 1,258.7 51.9 13,049.7 1,712.2 14,308.4 1,764.1 Residential mortgage-backed pass-through securities 201.2 0.7 1,145.8 116.5 1,347.0 117.2 Commercial mortgage-backed securities 320.9 2.3 2,869.7 249.1 3,190.6 251.4 Collateralized debt obligations (2) 1,391.5 1.5 15.2 5.0 1,406.7 6.5 Other debt obligations 382.5 1.7 2,616.9 318.1 2,999.4 319.8 Total fixed maturities, available-for-sale $ 4,548.4 $ 72.4 $ 24,076.5 $ 3,202.8 $ 28,624.9 $ 3,275.2 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. Gross unrealized losses exclude unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. 132 Table of Contents Mortgage Loans Mortgage loans consist of commercial mortgage loans on real estate and residential mortgage loans. For further details about residential mortgage loans, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 3, Investments” under the caption, “Financing Receivables.” Commercial Mortgage Loans. We generally report commercial mortgage loans on real estate at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances. Commercial mortgage loans play an important role in our investment strategy by: ● providing strong risk-adjusted relative value in comparison to other investment alternatives; ● enhancing total returns and ● providing strategic portfolio diversification. As a result, we have focused on constructing a high quality portfolio of mortgages. Our portfolio is generally comprised of mortgages originated with conservative loan-to-value ratios, high debt service coverages and general purpose property types with a strong credit tenancy. Our commercial mortgage loan portfolio consists primarily of non-recourse, fixed rate mortgages on fully or near fully leased properties. The mortgage portfolio is comprised primarily of office properties, apartments, well-anchored retail properties and general-purpose industrial properties. Our commercial mortgage loan portfolio is diversified by geography and specific collateral property type. Commercial mortgage lending in the state of California accounted for 21% and 21% of our commercial mortgage loan portfolio before valuation allowance as of March 31, 2026 and December 31, 2025, respectively. We are, therefore, exposed to potential losses resulting from the risk of catastrophes, including but not limited to earthquakes, fires, drought, extreme heat, flooding, and tsunamis, that may affect the region. During 2026 and 2025, we did not experience any material losses due to the aforementioned catastrophe risks. The typical borrower in our commercial mortgage loan portfolio is a single purpose entity or single asset entity. As of March 31, 2026 and December 31, 2025, the total number of commercial mortgage loans outstanding were 605 and 602, of which 32% and 32% were for loans with principal balances less than $10.0 million as of March 31, 2026 and December 31, 2025, respectively. The average loan size of our commercial mortgage portfolio was $23.1 million as of both March 31, 2026 and December 31, 2025. As of March 31, 2026, approximately $12.5 billion, or 89%, of our U.S. investment operations commercial mortgage loans before valuation allowance had balloon payment maturities. Commercial Mortgage Loan Credit Monitoring. For further details on monitoring and management of our commercial mortgage loan portfolio, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 3, Investments” under the caption, “Financing Receivables Credit Monitoring.” We categorize loans that are 60 days or more delinquent, loans in process of foreclosure and loans with borrowers or credit tenants in bankruptcy that are delinquent as “problem” loans. We categorize loans that are delinquent less than 60 days where the default is expected to be cured and loans with borrowers or credit tenants in bankruptcy that are current as “potential problem” loans. The decision whether to classify a loan delinquent less than 60 days as a potential problem involves significant subjective judgments by management as to the likely future economic conditions and developments with respect to the borrower. We categorize loans for which the original note rate has been reduced below market and loans for which the principal has been reduced as “restructured” loans. We also consider loans that are refinanced more than one year beyond the original maturity or call date at below market rates as restructured. 133 Table of Contents We had five delinquent problem commercial mortgage loans with a carrying amount of $229.5 million for which we had a valuation allowance of $53.0 million as of March 31, 2026. We did not have any potential problem commercial mortgage loans as of March 31, 2026. We did not have any restructured problem commercial mortgage loans as of March 31, 2026. We had three delinquent problem commercial mortgage loans with a carrying amount of $123.7 million for which we had a valuation allowance of $62.1 million as of December 31, 2025. We also had two potential problem commercial mortgage loans with a carrying amount of $140.1 million for which we had a valuation allowance of $25.1 million. We did not have any restructured problem commercial mortgage loans as of December 31, 2025. March 31, 2026 December 31, 2025 ($ in millions) Total commercial mortgage loans $ 13,859.0 $ 13,806.5 Problem commercial mortgage loans $ 176.5 $ 61.6 Potential problem commercial mortgage loans — 115.0 Total problem, potential problem and restructured commercial mortgage loans $ 176.5 $ 176.6 Total problem, potential problem and restructured commercial mortgage loans as a percent of total commercial mortgage loans 1.27 % 1.28 % Commercial Mortgage Loan Valuation Allowance. We establish the commercial mortgage loan valuation allowance at levels considered adequate to absorb estimated expected credit losses within the portfolio. For further details on the commercial mortgage loan valuation allowance, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 3, Investments” under the caption, “Financing Receivables Valuation Allowance.” Real Estate Real estate consists primarily of commercial equity real estate. As of March 31, 2026 and December 31, 2025, the carrying amount of our equity real estate investment was $2,399.9 million and $2,408.4 million, respectively. Our commercial equity real estate is held in the form of wholly owned real estate, real estate acquired upon foreclosure of commercial mortgage loans and majority owned interests in real estate joint ventures. Equity real estate is categorized as either “real estate held for investment” or “real estate held for sale.” The carrying value of real estate held for investment is generally adjusted for impairments whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Such impairment adjustments are recorded as net realized capital losses in our consolidated results of operations. No such impairment adjustments were recorded for the three months ended March 31, 2026 or for the year ended December 31, 2025. Once we identify a real estate property to be sold and it is probable that it will be sold, we classify the property as held for sale. We establish a valuation allowance subject to periodic revisions, if necessary, to adjust the carrying value of the property to reflect the lower of its current carrying value or the fair value, less associated selling costs. The valuation allowance did not change for the three months ended March 31, 2026 or for the year ended December 31, 2025. We use research, both internal and external, to recommend appropriate product and geographic allocations and changes to the equity real estate portfolio. We monitor product, geographic and industry diversification separately and together to determine the most appropriate mix. Equity real estate is distributed across geographic regions of the country. As of March 31, 2026, our largest equity real estate portfolio concentration was in the Pacific (45%) region of the United States. By property type, our largest concentrations were in Office (35%) and Industrial (28%) as of March 31, 2026. 134 Table of Contents Other Investments Our other investments totaled $5,955.6 million as of March 31, 2026, compared to $5,885.3 million as of December 31, 2025. Other investments include interests in unconsolidated entities, which include real estate properties owned jointly with venture partners and operated by the partners; sponsored investment funds; the cash surrender value of company owned and trust owned life insurance; derivative assets and other investments. International Investment Operations Of our invested assets, $6,523.0 million were held by our international operations as of March 31, 2026. Due to the regulatory constraints in each location, each company maintains its own investment policies. As shown in the following table, the major category of international invested assets is fixed maturities. The following table excludes invested assets of the separate accounts. March 31, 2026 December 31, 2025 Carrying Percent Carrying Percent amount of total amount of total ($ in millions) Fixed maturities $ 2,592.6 40 % $ 2,646.0 40 % Equity securities 845.3 13 887.4 13 Mortgage loans 873.7 13 951.0 14 Real estate 6.9 — 1.3 — Policy loans 15.4 — 16.2 — Other investments: Direct financing leases 542.3 8 567.6 8 % Investment in unconsolidated operating entities 1,186.0 18 1,133.2 17 % Derivative assets and other investments 460.8 8 480.2 8 % Total invested assets 6,523.0 100 % 6,682.9 100 % Cash and cash equivalents 309.7 306.7 Total invested assets and cash $ 6,832.7 $ 6,989.6 Regulations in certain locations require investment in the funds we manage. These required regulatory investments are classified as equity securities within our consolidated statements of financial position, with all mark-to-market changes reflected in net investment income. Our investment is primarily dictated by client activity and all investment performance is retained by us. 135 Table of Contents Item 3. Quantitative and Qualitative Disclosures About Market Risk Market Risk Exposures and Risk Management Market risk is the risk we will incur losses due to adverse fluctuations in market rates and prices. Our primary market risk exposures are to interest rates, equity markets and foreign currency exchange rates. The active management of market risk is an integral part of our operations. We manage our overall market risk exposure within established risk tolerance ranges using several approaches, including: ● rebalancing our existing asset or liability portfolios; ● controlling the risk structure of newly acquired assets and liabilities and ● using derivative instruments to modify the market risk characteristics of existing assets or liabilities or assets expected to be purchased. Interest Rate Risk Interest rate risk is the risk of economic losses due to adverse changes in interest rates. Interest rate risk arises primarily from our holdings in interest sensitive assets and liabilities. Changes in interest rates impact numerous aspects of our operations, including but not limited to: ● yield on our invested assets; ● rate of interest we credit to contractholder account balances; ● timing of cash flows on assets and liabilities containing embedded prepayment options; ● cost of hedging our GMWB rider; ● discount rate used in valuing our liability for future policy benefits for long-duration insurance and annuity contracts; ● discount rate used in valuing our pension and OPEB obligations; ● statutory reserve and capital requirements; ● asset-based fees earned on the fixed income assets we manage; ● interest expense on our long-term borrowings; ● fair value of intangible assets in our reporting units and ● fair value of financial assets and liabilities held at fair value on our consolidated statements of financial position. Lower interest rates generally result in lower profitability in the long-term. Conversely, higher interest rates generally result in higher profitability in the long-term. However, an increase in market interest rates may cause a decline in the value of financial assets held at fair value on our consolidated statements of financial position. Impact of Changes in Long-Term Interest Rate Assumptions We use long-term interest rate assumptions to calculate MRBs, certain reserves and benefit plan obligations in accordance with U.S. GAAP. In setting these assumptions, we consider a variety of factors, including historical experience, emerging trends and future expectations. We evaluate our assumptions on at least an annual basis. Due to the long-term nature of our assumptions, we generally do not revise our assumptions in response to short-term fluctuations in market interest rates. However, we will consider revising our assumptions if a significant change occurs in the factors noted above. A reduction in our long-term interest rate assumptions may result in increases in MRB liabilities and certain reserves. 136 Table of Contents Impact of Changes in Interest Rates Changes in interest rates or a sustained low interest rate environment may result in the following impacts, which would impact our financial position and results of operations: Impact of Falling Interest Rates or Sustained Low Interest Rates Impact of Rising Interest Rates Adverse Impacts: Positive Impacts: A reduction in investment income, which may be partially offset by a reduction in the interest we credit on contractholder account balances; however, our ability to lower crediting rates may be constrained by guaranteed minimum interest rates and competitive pressures An increase in investment income, which may be partially or fully offset by an increase in the interest we credit on contractholder account balances An increase in the cost of hedging our GMWB rider A decrease in the cost of hedging our GMWB rider An increase in MRB liabilities and certain reserves A decrease in MRB liabilities and certain reserves A reduction in the discount rate used to measure reserves for long-duration insurance and annuity contracts, leading to an increase in our reserves An increase in the discount rate used to measure reserves for long-duration insurance and annuity contracts, leading to a decrease in our reserves A reduction in the discount rate used in valuing our pension and OPEB obligations, leading to an increase in our Projected Benefit Obligation, Net Periodic Pension Cost, Accumulated Postretirement Benefit Obligation and Net Periodic Benefit Cost An increase in the discount rate used in valuing our pension and OPEB obligations, leading to a decrease in our Projected Benefit Obligation, Net Periodic Pension Cost, Accumulated Postretirement Benefit Obligation and Net Periodic Benefit Cost An increase in statutory capital we are required to hold as well as the amount of assets we must maintain to support statutory reserves A decrease in statutory capital we are required to hold as well as the amount of assets we must maintain to support statutory reserves An increase in prepayments or redemptions on mortgages and bonds we own, which would force us to reinvest the proceeds at lower interest rates A decrease in prepayments or redemptions on mortgages and bonds we own, which would reduce our opportunity to reinvest the proceeds at higher interest rates Positive Impacts: Adverse Impacts: An increase in the value of the fixed income assets we manage, resulting in an increase in our fee revenue in the short-term A decrease in the value of the fixed income assets we manage, resulting in a decrease in our fee revenue in the short-term A decrease in the interest expense on our long-term borrowings, to the extent the borrowings have adjustable rates or we are able to refinance our obligations at lower interest rates An increase in the interest expense on our long-term borrowings, to the extent the borrowings have adjustable rates or we refinance our obligations at higher interest rates An increase in the fair value of certain financial assets held at fair value on our consolidated statements of financial position A decrease in the fair value of certain financial assets held at fair value on our consolidated statements of financial position, as discussed below A reduction in the fair value of intangible assets in our reporting units, potentially leading to an impairment of goodwill or other intangible assets We estimate a hypothetical 100 basis point immediate, parallel decrease in U.S. interest rates would impact segment pre-tax operating earnings between (1)% and 1% over the next twelve months. This estimate reflects the impact of routine management actions in response to changes in interest rates, such as reducing the interest rates we credit on contractholder account balances, but does not reflect the impact of other actions management may consider, such as curtailing sales of certain products. The selection of a 100 basis point immediate, parallel decrease in U.S. interest rates should not be construed as a prediction by us of future market events, but rather as an illustration of the impact of such an event. Our exposure will change as a result of ongoing portfolio transactions in response to new business, management’s assessment of changing market conditions and changes in our mix of business. 137 Table of Contents If market rates increase rapidly, policy surrenders, withdrawals and requests for policy loans may increase as customers seek to achieve higher returns. Excess lapses may result in an acceleration of amortization for our DAC and other actuarial balances. We may be required to sell assets to raise the cash necessary to respond to such surrenders, withdrawals and loans, thereby realizing capital losses on the assets sold. Guaranteed Minimum Interest Rate Exposure . The following table provides detail on the differences between the interest rates being credited to contractholders as of March 31, 2026, and the respective GMIRs. Amounts for contracts without significant fee revenues such as GICs, funding agreements, retail fixed income annuities and guaranteed pension contracts are excluded. Additionally, amounts for contracts that are reinsured are also excluded. Account values are broken down by GMIR level within the Retirement and Income Solutions and Benefits and Protection segments. Account values (1) Excess of crediting rates over GMIR: Up to 0.50% 0.51% to 1.00% 1.01% to 2.00% 2.01% or more At GMIR above GMIR above GMIR above GMIR above GMIR Total ($ in millions) Guaranteed minimum interest rate Retirement and Income Solutions Up to 1.00% $ 14.3 $ — $ — $ — $ — $ 14.3 1.01% - 2.00% 3.5 2,598.5 — 719.7 — 3,321.7 2.01% - 3.00% 318.8 19.9 65.7 5,223.8 4,589.9 10,218.1 3.01% - 4.00% 7.7 — — — — 7.7 4.01% and above 11.3 — — — — 11.3 Subtotal 355.6 2,618.4 65.7 5,943.5 4,589.9 13,573.1 Benefits and Protection Up to 1.00% — — — 14.7 38.2 52.9 1.01% - 2.00% (0.1) — — 4.1 464.6 468.6 2.01% - 3.00% 2.1 11.3 99.5 397.5 0.2 510.6 3.01% - 4.00% 1,525.6 79.9 75.6 18.9 2.2 1,702.2 4.01% and above 20.2 25.2 1.9 2.5 — 49.8 Subtotal 1,547.8 116.4 177.0 437.7 505.2 2,784.1 Total $ 1,903.4 $ 2,734.8 $ 242.7 $ 6,381.2 $ 5,095.1 $ 16,357.2 Percentage of total 11.6 % 16.7 % 1.5 % 39.0 % 31.1 % 100.0 % (1) Includes only the account values, net of the account values with associated policy loans, for products with GMIRs and discretionary crediting rates, excluding amounts for contracts that are reinsured. Impact of Rising Interest Rates on the Fair Value of Financial Assets. An increase in market interest rates may cause a decline in the value of financial assets held at fair value on our consolidated statements of financial position. Although changes in the fair value of our financial assets due to changes in interest rates may impact the amount of equity reported in our consolidated statements of financial position, these changes will not cause an economic gain or loss unless we sell investments, terminate derivative positions, record an allowance for credit loss, or determine a derivative instrument is no longer an effective hedge. We estimate a hypothetical 100 basis point immediate, parallel increase in interest rates would reduce the net reported fair value of our financial assets and derivatives by $2,870.1 million as of March 31, 2026 , compared to $2,730.6 million as of December 31, 2025 . This estimate only reflects the change in fair value for financial assets and derivatives reported at fair value on our consolidated statements of financial position. Assets and liabilities not reported at fair value on our consolidated statements of financial position – including mortgage loans, liabilities relating to insurance contracts, investment contracts, debt and bank deposits – are excluded from this sensitivity analysis. We believe the excluded liability items would economically serve as a partial offset to the net interest rate risk of the financial instruments included in the sensitivity analysis. Separate account assets and liabilities are also excluded from this estimate, as any interest rate risk is borne by the holder of the separate account. Assets backing reserves as part of a coinsurance with funds withheld agreement are excluded from this estimate, as any interest rate risk is passed to the reinsurer. For more information on fair value measurements, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 15, Fair Value Measurements. ” 138 Table of Contents Our selection of a 100 basis point immediate, parallel increase in interest rates is a hypothetical rate scenario we use to demonstrate potential risk. While a 100 basis point immediate, parallel increase does not represent our view of future market changes, it is a near term reasonably possible hypothetical change that illustrates the potential impact of such events. While this sensitivity analysis provides a representation of interest rate sensitivity, it is based on our portfolio exposures at a point in time and may not be representative of future market results. These exposures will change as a result of ongoing portfolio transactions in response to new business, management’s assessment of changing market conditions and available investment opportunities. Our net estimated potential loss in fair value as of March 31, 2026, increased $139.5 million from December 31, 2025, driven by investment activity within the portfolio. Interest Rate Risk Management We manage interest rate risk through the use of an integrated risk management framework. This helps us identify, assess, monitor, report and manage our risks within established limits and risk tolerances. Our internal risk committees monitor and discuss our risk profile and identify necessary actions to mitigate impacts from interest rate risk. The product designs within our business units result in a variety of different interest rate risk profiles. Therefore, our business units use a variety of different approaches for managing their asset and liability interest rate risks. ● Retirement Business Stable Cash Flows – For stable and predictable cash flow liabilities, such as pension risk transfer, WSRS, and investment only, we use investment strategy and hedges to tightly align the cash flow run off of these asset and liability cash flows. Immunization analysis is also utilized in the management of interest rate risk. ● U.S. Insurance Stable Cash Flows – Our insurance businesses in many instances contain long-term guarantees with stable and predictable liability cash flows and recurring premiums. We manage the interest rate risk through investment strategy, product crediting rates and analyzing duration and embedded value sensitivity. ● Principal Asset Management – Our international businesses operate within local regulations and financial market conditions (e.g., derivative markets, assets available) to achieve similar asset and liability cash flow management objectives. In locations with a limited availability of long-dated assets and derivative markets, the duration gap is managed to risk tolerances specific to each location. We also limit our exposure to interest rate risk through our business mix and strategy. We have intentionally limited our exposure to specific products where investment margins are critical to the product’s profitability, and we continue to emphasize the sale of products that generate revenues in the form of fees for service or premiums for insurance coverage and expose us to minimal interest rate risk. Prepayment risk is controlled by limiting our exposure to investments that are prepayable without penalty prior to maturity at the option of the issuer. We also require additional yield on these investments to compensate for the risk the issuer will exercise such option. Prepayment risk is also controlled by limiting the sales of liabilities with features such as puts or other options that can be exercised at inopportune times. We manage the interest rate risk associated with our long-term borrowings by monitoring the interest rate environment and evaluating refinancing opportunities as maturity dates approach. The plan fiduciaries use a Dynamic Asset Allocation strategy for our qualified defined benefit pension plan, which strategically allocates an increasing portion of the assets of the pension plan to fixed income securities as the funding status improves. The intended purpose of using the Dynamic Asset Allocation strategy is that the expected change in the value of the plan assets and the change in pension benefit obligation due to market movements are more likely to have more correlation versus a static allocation of assets between categories. For more information see Item 7 . “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Benefit Plans” and Item 8 . “ Financial Statements and Supplementary Data , Notes to Consolidated Financial Statements, Note 15, Employee and Agent Benefits ” in our Annual Report on Form 10-K for the year ended December 31, 2025 . 139 Table of Contents Use of Derivatives to Manage Interest Rate Risk. We use or have used various derivative financial instruments to manage our exposure to fluctuations in interest rates, including interest rate swaps, interest rate options, bond forwards, treasury forwards and futures. We use interest rate swaps, treasury forwards and futures contracts to hedge against changes in the value of the GMWB MRB. We use interest rate swaps and treasury forwards primarily to more closely match the interest rate characteristics of assets and liabilities. They can be used to change the sensitivity to the interest rate of specific assets and liabilities as well as an entire portfolio. We use interest rate swaps to manage our exposure to cash flow variability on recognized assets due to fluctuations in market interest rates. We use bond forwards to fix the purchase price of a bond at a specified date in the future. We use interest rate options to manage prepayment risks in our assets and minimum guaranteed interest rates and lapse risks in our liabilities. Foreign Currency Risk Foreign currency risk is the risk we will incur economic losses due to adverse fluctuations in foreign currency exchange rates. This risk arises from foreign currency-denominated funding agreements issued to nonqualified institutional investors in the international market, foreign currency-denominated fixed maturity and equity securities, and our international operations, including expected cash flows and potential acquisition and divestiture activity. We estimate as of March 31, 2026, a 10% immediate unfavorable change in each of the foreign currency exchange rates to which we are exposed would result in no material change to the net fair value of our foreign currency-denominated instruments identified above because we effectively hedge foreign currency-denominated instruments to minimize exchange rate impacts, which is consistent with our estimate as of December 31, 2025. However, fluctuations in foreign currency exchange rates do affect the translation of segment pre-tax operating earnings and equity of our international operations into our consolidated financial statements. For our international operations, we estimate a 10% immediate unfavorable change in each of the foreign currency exchange rates to which we were exposed would have resulted in a $280.7 million, or 7%, reduction in the total equity excluding noncontrolling interests of our international operations as of March 31, 2026, as compared to an estimated $275.1 million, or 7%, reduction as of December 31, 2025. We estimate a 10% unfavorable change in the average foreign currency exchange rates to which we were exposed through our international operations would have resulted in a $12.7 million, or 6%, reduction in segment pre-tax operating earnings of our international operations for the three months ended March 31, 2026, as compared to an estimated $10.3 million, or 6%, reduction for the three months ended March 31, 2025. The selection of a 10% immediate unfavorable change in all currency exchange rates should not be construed as a prediction by us of future market events, but rather as an illustration of the potential impact of such an event. These exposures will change as a result of a change in the size and mix of our foreign operations. Use of Derivatives to Manage Foreign Currency Risk. The foreign currency risk on funding agreements and fixed maturities in our U.S. operations is mitigated by using currency swaps that swap the foreign currency interest and principal payments to our functional currency. We did not have currency swap agreements associated with foreign-denominated liabilities as of March 31, 2026 and December 31, 2025 . The notional amount of our currency swap agreements associated with foreign-denominated fixed maturities was $3,590.0 million and $3,319.6 million as of March 31, 2026 and December 31, 2025 , respectively. With regard to our international operations, in order to enhance the diversification of our investment portfolios we may invest in bonds denominated in a currency that is different than the currency of our liabilities. We use foreign exchange derivatives to economically hedge the currency mismatch. Our international operations had currency swaps with a notional amount of $205.3 million and $219.1 million as of March 31, 2026 and December 31, 2025, respectively. Our international operations also utilized currency forwards with a notional amount of $627.9 million and $642.9 million as of March 31, 2026 and December 31, 2025, respectively. We use currency forwards to hedge currency risk associated with expected cash flows in our foreign operations. We held currency forwards with a notional of $502.4 million and $156.5 million as of March 31, 2026 and December 31, 2025, respectively. Additionally, we use currency forwards to hedge net equity investments in our foreign operations, including certain sponsored investment funds. We held currency forwards with a notional amount of $56.0 million and $55.6 million as of March 31, 2026 and December 31, 2025, respectively. 140 Table of Contents We also use currency forwards to hedge certain foreign-denominated investments in our domestic operations. We held currency forwards with a notional amount of $60.3 million and $59.6 million as of March 31, 2026 and December 31, 2025, respectively. Equity Risk Equity risk is the risk we will incur economic losses due to adverse fluctuations in equity markets. As of March 31, 2026 and December 31, 2025 , the fair value of our equity securities was $2,341.9 million and $2,237.3 million, respectively. We estimate a 10% decline in the prices of the equity securities would result in a decline in fair value of our equity securities of $234.2 million as of March 31, 2026 , as compared to a decline in fair value of our equity securities of $223.7 million as of December 31, 2025 . We are also exposed to the risk that asset-based fees decrease as a result of declines in assets under management due to changes in investment prices and the risk that asset management fees calculated by reference to performance could be lower. We also have equity risk associated with (1) universal life contracts that credit interest to customers based on changes in an external equity index; (2) variable annuity contracts that have a GMWB rider that allows the customer to make withdrawals of a specified annual amount, either for a fixed number of years or for the lifetime of the customer, even if the account value is reduced to zero; (3) variable annuity contracts that have a GMDB that allows the death benefit to be paid, even if the account value has fallen below the GMDB amount; (4) SEC-registered annuity contracts with returns linked to an external equity index and (5) investment contracts in which the return is subject to minimum contractual guarantees. We are also subject to equity risk based upon the assets that support our employee benefit plans. For further discussion of equity risk associated with these plans, see Item 7 . “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Benefit Plans” in our Annual Report on Form 10-K for the year ended December 31, 2025 . We estimate an immediate 10% downward equity shock, followed by a 2% per quarter increase would reduce our annual segment pre-tax operating earnings by approximately 5% to 8% over the next twelve months. The selection of a 10% unfavorable equity shock should not be construed as a prediction by us of future market events, but rather as an illustration of the potential impact of such an event. Our exposure will change as a result of changes in our mix of business. Separate and distinct from our equity risk associated with a decline in the equity indices, we also have equity risk associated with certain domestic alternative investments. These investments are comprised of several asset categories (including hedge funds, private equity, infrastructure and direct lending) that provide an attractive asset match to our long-dated liabilities and create diversification benefits to our fixed income investments. The risk profile of these investments is actively monitored by our Investment Committee and our corporate risk management function. Changes in the value of these investments will impact earnings. We estimate an immediate 10% decline in the value of those assets, followed by a 2% per quarter increase would reduce our annual segment pre-tax operating earnings by less than 9% . The selection of a 10% unfavorable change in the value of those assets should not be construed as a prediction of future market events, but rather as an illustration of the potential impact of such a decline in value of those assets. Use of Derivatives to Manage Equity Risk. We economically hedge the universal life products, where the interest credited is linked to an external equity index, by purchasing options that match the product’s profile or selling options to offset existing exposures. We economically hedge certain investments using total return swaps to swap the equity risk for income enhancement. We economically hedge RILA index credit exposure using options and futures. We economically hedge the GMWB rider MRB exposure, which includes interest rate risk and equity risk, using futures, options, treasury forwards and interest rate swaps with notional amounts of $7,291.3 million and $7,088.9 million as of March 31, 2026 , and December 31, 2025 , respectively. The fair value of both MRBs and associated hedging instruments are sensitive to financial market conditions and the variance related to the change in fair value of these items for a given period is largely dependent on market conditions at the end of the period. 141 Table of Contents Item 4. Controls and Procedures Disclosure Controls and Procedures In order to ensure the information we must disclose in our filings with the SEC is recorded, processed, summarized and reported on a timely basis, we have adopted disclosure controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure information required to be disclosed by us in the reports we file with or submit to the SEC is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer, Deanna D. Strable-Soethout, and our Chief Financial Officer, Joel M. Pitz, have reviewed and evaluated our disclosure controls and procedures as of March 31, 2026, and have concluded our disclosure controls and procedures are effective. Changes in Internal Control Over Financial Reporting We had no change in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 142 Table of Contents PART II — OTHER INFORMATION Item 1. Legal Proceedings Disclosure concerning legal proceedings can be found in Part I, Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 13, Contingencies, Guarantees and Indemnifications” under the caption, “Litigation and Regulatory Contingencies,” which is incorporated here by this reference. Item 1A. Risk Factors In addition to the other information set forth in this report, consideration should be given to the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. If any of those factors were to occur, they could materially adversely affect our business, financial condition or future results, and could cause actual results to differ materially from those expressed in forward-looking statements in this report. We have not had material changes with respect to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2025. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Issuer Purchases of Equity Securities The following table presents the amount of our share purchase activity for the periods indicated. Maximum dollar Total number of value of shares shares purchased that may yet be Total number of Average as part of publicly purchased under shares price paid announced the programs (in Period purchased (1) per share programs millions) (2) January 1, 2026 - January 31, 2026 716,500 $ 91.07 716,500 $ 1,369.8 February 1, 2026 - February 28, 2026 794,891 $ 93.85 695,449 $ 1,304.4 March 1, 2026 - March 31, 2026 1,043,461 $ 91.20 775,839 $ 1,234.7 Total 2,554,852 2,187,788 (1) Includes the number of shares of common stock utilized to execute certain stock incentive awards and shares purchased as part of publicly announced programs. (2) 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. 143 Table of Contents Item 5. Other Information None. Item 6. Exhibits Incorporated by reference herein Exhibit Number Description Form File Date 31.1 Certification of Deanna D. Strable-Soethout 31.2 Certification of J oel M. Pitz 32.1 Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code – Deanna D. Strable-Soethout 32.2 Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code – Joel M. Pitz 101.INS Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 104 The cover page from Principal Financial Group, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2026 formatted in iXBRL and contained in Exhibit 101. 144 Table of Contents SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PRINCIPAL FINANCIAL GROUP, INC. Dated: April 29, 2026 By /s/ Joel M. Pitz Joel M. Pitz Executive Vice President and Chief Financial Officer Duly Authorized Officer, Principal Financial Officer, and Principal Accounting Officer 145