Market Risk Benefits (Tables)

9 Months Ended

Sep. 30, 2023

Market Risk Benefits

Summary of disaggregated MRB amounts in an asset and liability position (Table)

	September 30, 2023						December 31, 2022
					Net asset						Net asset
	Asset		Liability		(liability)		Asset		Liability		(liability)
	(in millions)
Retirement and Income Solutions:
Individual variable annuities	$	173.1	$	90.8	$	82.3	$	109.2	$	181.4	$	(72.2)
Principal Asset Management – Principal International:
Asia:
Guaranteed pension		—		21.7		(21.7)		—		26.0		(26.0)
Total MRB per consolidated statements of financial position	$	173.1	$	112.5	$	60.6	$	109.2	$	207.4	$	(98.2)

Summary of net asset (liability) balances and the changes in the valuation of the MRBs (Table)

	For the year ended December 31, 2021
	Retirement and Income		Principal Asset Management –
	Solutions		Principal International
			Asia
	Individual variable annuities		Guaranteed pension
	(in millions)
Balance at beginning of period	$	(591.3)	$	(53.3)
Effect of changes in nonperformance risk at beginning of period		106.7		6.5
Adjusted balance at beginning of period		(484.6)		(46.8)
Effect of:
Interest accrual and expected policyholder behavior		(120.7)		(5.3)
Benefit payments		0.4		5.7
Changes in interest rates		154.3		7.6
Changes in equity markets		106.4		1.4
Changes in equity index volatility		15.1		—
Actual policyholder behavior different from expected behavior		2.3		3.6
Changes in future expected policyholder behavior		(96.6)		0.5
Changes in other future expected assumptions		38.2		2.3
Foreign currency translation adjustment		—		0.2
Adjusted balance at end of period		(385.2)		(30.8)
Effect of changes in nonperformance risk at end of period		(109.5)		(4.3)
Balance at end of period	$	(494.7)	$	(35.1)

Summary of quantitative information about the significant unobservable inputs used for fair value measurements of MRBs (Table)

	September 30, 2023						December 31, 2022
					Weighted-						Weighted-
	Range of inputs				Average		Range of inputs				Average
Retirement and Income Solutions:
Individual variable annuities
Long-term interest rate (1)	4.70	-	4.90	%	4.80	%	3.97	-	4.12	%	4.04	%
Long-term equity market volatility	18.00	-	33.00	%	22.00	%	18.10	-	34.15	%	22.07	%
Nonperformance risk	0.90	-	1.80	%	1.60	%	0.90	-	1.96	%	1.65	%
Lapse rate	1.10	-	55.00	%	5.80	%	1.25	-	24.75	%	5.76	%
Principal Asset Management - Principal International:
Asia:
Guaranteed pension
Long-term interest rate (1)	4.20	-	4.37	%	4.28	%	3.80	-	3.98	%	3.88	%
Long-term equity market volatility	16.77	-	24.24	%	19.70	%	18.06	-	25.16	%	20.69	%
Nonperformance risk	0.92	-	1.92	%	1.64	%	0.90	-	1.98	%	1.68	%
Lapse rate	4.95	-	19.35	%	13.40	%	4.95	-	19.35	%	13.40	%

(1) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. The rate curves are derived from an interpolation between various observable swap rates.

Retirement and Income Solutions

Market Risk Benefits

Summary of significant changes to inputs and assumptions that impacted the change in the MRB fair value measurement

	For the nine months ended		For the year ended
	September 30, 2023		December 31, 2022
		Change in net		Change in net
	Change in input	MRB liability	Change in input	MRB liability
Long-term interest rate	Increased	Favorable	Increased	Favorable
Equity markets	Increased	Favorable	Decreased	Unfavorable
Equity market volatilities	Decreased	Favorable	Increased	Unfavorable
Own nonperformance risk	Decreased	Unfavorable	Increased	Favorable

Retirement and Income Solutions | Individual variable annuities

Market Risk Benefits

Summary of net asset (liability) balances and the changes in the valuation of the MRBs (Table)

The net asset (liability) balances and the changes in the valuation of the MRBs for Individual variable annuities were as follows:

	For the nine months ended		For the year ended
	September 30, 2023		December 31, 2022
	($ in millions)
Balance at beginning of period	$	(72.2)	$	(494.7)
Effect of changes in nonperformance risk at beginning of period		(31.7)		109.5
Adjusted balance at beginning of period		(103.9)		(385.2)
Effect of:
Interest accrual and expected policyholder behavior		(57.7)		(90.1)
Benefit payments		0.3		1.3
Changes in interest rates		126.0		539.1
Changes in equity markets		76.0		(112.4)
Changes in equity index volatility		40.4		(50.2)
Actual policyholder behavior different from expected behavior		(2.8)		1.5
Changes in future expected policyholder behavior		—		(6.1)
Changes in other future expected assumptions		(5.3)		(1.8)
Adjusted balance at end of period		73.0		(103.9)
Effect of changes in nonperformance risk at end of period		9.3		31.7
Balance at end of period	$	82.3	$	(72.2)
Weighted-average attained age of policyholders (years) (1)		67.7		67.4
Net amount at risk (2)	$	292.7	$	415.5

(1) The weighted-average attained age is calculated at the contract level using the total contributions since inception and the age of the contractholders.

(2) The net amount at risk for our GMDB riders is defined as the current GMDB amount in excess of the current account balance. The net amount at risk for our GMWB riders is defined as the greater of the present value of the GMWB payments less the current account balance or zero. For contracts with both GMDB and GMWB riders, the net amount at risk is the greater of the GMDB or GMWB net amount at risk. A decrease in the net amount at risk in 2023 as a result of increases in the equity markets was partially offset by an increase in the net amount at risk as a result of increases in interest rates. Decreases in the equity markets and increases in interest rates resulted in an increase in the net amount at risk in 2022.

Principal Asset Management | Principal International | Asia | Guaranteed pension

Market Risk Benefits

Summary of net asset (liability) balances and the changes in the valuation of the MRBs (Table)

The net asset (liability) balances and the changes in the valuation of the MRBs for Asia – Guaranteed pension were as follows:

	For the nine months ended		For the year ended
	September 30, 2023		December 31, 2022
	($ in millions)
Balance at beginning of period	$	(26.0)	$	(35.1)
Effect of changes in nonperformance risk at beginning of period		1.2		4.3
Adjusted balance at beginning of period		(24.8)		(30.8)
Effect of:
Interest accrual and expected policyholder behavior		(7.6)		(7.1)
Benefit payments		10.4		9.5
Changes in interest rates		1.1		3.9
Changes in equity markets		0.2		(1.0)
Actual policyholder behavior different from expected behavior		(0.1)		0.7
Foreign currency translation adjustment		0.1		—
Adjusted balance at end of period		(20.7)		(24.8)
Effect of changes in nonperformance risk at end of period		(1.0)		(1.2)
Balance at end of period	$	(21.7)	$	(26.0)
Weighted-average attained age of policyholders (years) (1)		50.2		50.0
Net amount at risk (2)	$	76.1	$	91.0

(1) The weighted-average attained age is calculated at the contract level using the guarantee amounts and the age of the underlying members of the contracts.

(2) The net amount at risk for the minimum guarantee on withdrawal is defined as the current guaranteed balance in excess of the current account balance.