Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Measurements

Fair Value (Table)

	March 31, 2024
	Assets/		Amount
	(liabilities)		measured at
	measured at		net asset		Fair value hierarchy level
	fair value		value (5)		Level 1		Level 2		Level 3
	(in millions)
Assets
Fixed maturities, available-for-sale:
U.S. government and agencies	$	1,450.0	$	—	$	1,155.0	$	295.0	$	—
Non-U.S. governments		508.0		—		—		508.0		—
States and political subdivisions		6,492.6		—		—		6,424.4		68.2
Corporate		35,164.3		—		31.7		32,930.0		2,202.6
Residential mortgage-backed pass-through securities		3,416.9		—		—		3,416.9		—
Commercial mortgage-backed securities		4,830.1		—		—		4,827.2		2.9
Collateralized debt obligations (1)		5,725.9		—		—		5,626.5		99.4
Other debt obligations		8,103.5		—		—		6,937.1		1,166.4
Total fixed maturities, available-for-sale		65,691.3		—		1,186.7		60,965.1		3,539.5
Fixed maturities, trading		877.7		—		27.7		379.8		470.2
Equity securities		1,488.9		—		255.5		1,233.4		—
Derivative assets (2)		318.9		—		—		315.5		3.4
Other investments		961.2		73.2		233.4		488.8		165.8
Cash equivalents		2,594.5		—		272.0		2,322.5		—
Market risk benefit asset (3)		201.9		—		—		—		201.9
Sub-total excluding separate account assets		72,134.4		73.2		1,975.3		65,705.1		4,380.8
Separate account assets		171,788.2		8,282.6		111,131.5		51,648.5		725.6
Total assets	$	243,922.6	$	8,355.8	$	113,106.8	$	117,353.6	$	5,106.4
Liabilities
Investment and universal life contracts (4)	$	(174.7)	$	—	$	—	$	—	$	(174.7)
Market risk benefit liability (3)		(99.6)		—		—		—		(99.6)
Funds withheld payable embedded derivative (4)		2,764.1		—		—		—		2,764.1
Derivative liabilities (2)		(530.8)		—		—		(528.3)		(2.5)
Other liabilities		(1.5)		—		—		(1.5)		—
Total liabilities	$	1,957.5	$	—	$	—	$	(529.8)	$	2,487.3
Net assets	$	245,880.1	$	8,355.8	$	113,106.8	$	116,823.8	$	7,593.7

	December 31, 2023
	Assets/		Amount
	(liabilities)		measured at
	measured at		net asset		Fair value hierarchy level
	fair value		value (5)		Level 1		Level 2		Level 3
	(in millions)
Assets
Fixed maturities, available-for-sale:
U.S. government and agencies	$	1,528.8	$	—	$	1,216.0	$	312.8	$	—
Non-U.S. governments		507.9		—		0.2		507.7		—
States and political subdivisions		6,676.8		—		—		6,606.9		69.9
Corporate		35,810.0		—		30.9		33,473.2		2,305.9
Residential mortgage-backed pass-through securities		3,061.1		—		—		3,061.1		—
Commercial mortgage-backed securities		4,775.5		—		—		4,772.5		3.0
Collateralized debt obligations (1)		5,403.7		—		—		5,328.3		75.4
Other debt obligations		7,909.3		—		—		6,726.7		1,182.6
Total fixed maturities, available-for-sale		65,673.1		—		1,247.1		60,789.2		3,636.8
Fixed maturities, trading		836.2		—		27.7		392.7		415.8
Equity securities		1,478.1		—		245.4		1,232.7		—
Derivative assets (2)		304.2		—		—		297.9		6.3
Other investments		815.6		73.7		220.1		356.7		165.1
Cash equivalents		3,771.4		—		511.6		3,259.8		—
Market risk benefit asset (3)		153.4		—		—		—		153.4
Sub-total excluding separate account assets		73,032.0		73.7		2,251.9		66,329.0		4,377.4
Separate account assets		167,605.6		8,692.0		104,505.0		53,655.8		752.8
Total assets	$	240,637.6	$	8,765.7	$	106,756.9	$	119,984.8	$	5,130.2
Liabilities
Investment and universal life contracts (4)	$	(115.5)	$	—	$	—	$	—	$	(115.5)
Market risk benefit liability (3)		(133.2)		—		—		—		(133.2)
Funds withheld payable embedded derivative (4)		2,567.1		—		—		—		2,567.1
Derivative liabilities (2)		(494.0)		—		—		(493.2)		(0.8)
Other liabilities		(1.0)		—		—		(1.0)		—
Total liabilities	$	1,823.4	$	—	$	—	$	(494.2)	$	2,317.6
Net assets	$	242,461.0	$	8,765.7	$	106,756.9	$	119,490.6	$	7,447.8

(1) Primarily consists of collateralized loan obligations backed by secured corporate loans.

(2) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes in Level 3 Fair Value Measurements tables. Refer to Note 4, Derivative Financial Instruments, for further information on fair value by class of derivative instruments.

(3) Refer to Note 9, Market Risk Benefits, for further information on the change in the Level 3 fair value measurements of MRBs.

(4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. The funds withheld payable embedded derivative could be in either an asset or (liability) position.

(5) Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $7.1 million and $7.1 million as of March 31, 2024 and December 31, 2023, respectively. Separate account assets using the NAV practical expedient consist of certain funds with varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these funds.

Reconciliation for All Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Table)

	For the three months ended March 31, 2024
	Beginning						Net						Ending
	asset/		Total realized/unrealized				purchases,						asset/
	(liability)		gains (losses)				sales,						(liability)
	balance				Included in		issuances						balance
	as of		Included in		other		and		Transfers		Transfers		as of
	January 1,		net income		comprehensive		settlements		into		out of		March 31,
	2024		(2)		income (3)		(4)		Level 3		Level 3		2024
	(in millions)
Assets
Fixed maturities, available-for-sale:
States and political subdivisions	$	69.9	$	—	$	(1.3)	$	(0.4)	$	—	$	—	$	68.2
Corporate		2,305.9		(5.2)		(11.2)		(126.4)		39.5		—		2,202.6
Commercial mortgage-backed securities		3.0		—		—		(0.1)		—		—		2.9
Collateralized debt obligations		75.4		—		(1.7)		25.7		—		—		99.4
Other debt obligations		1,182.6		—		(7.3)		22.7		80.0		(111.6)		1,166.4
Total fixed maturities, available-for-sale		3,636.8		(5.2)		(21.5)		(78.5)		119.5		(111.6)		3,539.5
Fixed maturities, trading		415.8		(3.5)		—		57.9		—		—		470.2
Other investments		165.1		(5.3)		—		6.0		—		—		165.8
Separate account assets (1)		752.8		(26.3)		—		(0.9)		—		—		725.6
Liabilities
Investment and universal life contracts		(115.5)		(43.4)		—		(15.8)		—		—		(174.7)
Funds withheld payable embedded derivative		2,567.1		197.0		—		—		—		—		2,764.1
Derivatives
Net derivative assets (liabilities)		5.5		(5.0)		—		0.4		—		—		0.9

	For the three months ended March 31, 2023
	Beginning						Net						Ending
	asset/		Total realized/unrealized				purchases,						asset/
	(liability)		gains (losses)				sales,						(liability)
	balance				Included in		issuances						balance
	as of		Included in		other		and		Transfers		Transfers		as of
	January 1,		net income		comprehensive		settlements		into		out of		March 31,
	2023		(2)		income (3)		(4)		Level 3		Level 3		2023
	(in millions)
Assets
Fixed maturities, available-for-sale:
States and political subdivisions	$	70.9	$	—	$	1.6	$	(0.4)	$	—	$	—	$	72.1
Corporate		1,568.3		—		(6.6)		125.3		10.4		(42.9)		1,654.5
Commercial mortgage-backed securities		3.4		—		0.1		(0.2)		—		—		3.3
Collateralized debt obligations		56.2		—		1.1		120.1		—		(15.2)		162.2
Other debt obligations		467.8		—		(6.5)		186.9		218.3		—		866.5
Total fixed maturities, available-for-sale		2,166.6		—		(10.3)		431.7		228.7		(58.1)		2,758.6
Fixed maturities, trading		134.0		(0.4)		—		22.5		—		—		156.1
Other investments		1.9		—		—		—		—		—		1.9
Separate account assets (1)		1,034.9		15.0		—		(156.1)		—		—		893.8
Liabilities
Investment and universal life contracts		(46.4)		(5.3)		—		(3.8)		—		—		(55.5)
Funds withheld payable embedded derivative		3,652.8		(626.6)		—		—		—		—		3,026.2
Derivatives
Net derivative assets (liabilities)		(3.4)		7.4		—		—		—		—		4.0

(1) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. Foreign currency translation adjustments related to the Principal International separate account assets are recorded in AOCI and are offset by foreign currency translation adjustments of the corresponding separate account liabilities.

(2) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses), net realized capital gains (losses) on funds withheld assets or change in fair value of funds withheld embedded derivative within the consolidated statements of operations. Realized and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market changes are reported in net investment income within the consolidated statements of operations. Changes in unrealized gains (losses) included in net income relating to positions still held were:

	For the three months ended
	March 31,
	2024		2023
	(in millions)
Assets
Fixed maturities, available-for-sale:
Corporate	$	(3.6)	$	—
Total fixed maturities, available-for-sale		(3.6)		—
Fixed maturities, trading		(3.7)		(0.3)
Other investments		(3.4)		—
Separate account assets		(33.3)		(21.8)
Liabilities
Investment and universal life contracts		(44.5)		(7.1)
Funds withheld payable embedded derivative		197.0		(626.6)
Derivatives
Net derivative assets (liabilities)		(4.5)		7.3

(3) Changes in unrealized gains (losses) included in OCI, including foreign currency translation adjustments related to Principal International, relating to positions still held were:

	For the three months ended
	March 31,
	2024		2023
	(in millions)
Assets
Fixed maturities, available-for-sale:
States and political subdivisions	$	(1.3)	$	1.6
Corporate		(12.6)		(6.6)
Commercial mortgage-backed securities		—		0.1
Collateralized debt obligations		(1.7)		1.1
Other debt obligations		(7.3)		(6.5)
Total fixed maturities, available-for-sale		(22.9)		(10.3)

(4) Gross purchases, sales, issuances and settlements were:

	For the three months ended March 31, 2024
									Net purchases,
									sales, issuances
	Purchases		Sales		Issuances		Settlements		and settlements
	(in millions)
Assets
Fixed maturities, available-for-sale:
States and political subdivisions	$	—	$	—	$	—	$	(0.4)	$	(0.4)
Corporate		135.5		(221.1)		—		(40.8)		(126.4)
Commercial mortgage-backed securities		—		—		—		(0.1)		(0.1)
Collateralized debt obligations		25.7		—		—		—		25.7
Other debt obligations		105.3		(59.1)		—		(23.5)		22.7
Total fixed maturities, available-for-sale		266.5		(280.2)		—		(64.8)		(78.5)
Fixed maturities, trading		187.3		(97.0)		—		(32.4)		57.9
Other investments		51.9		—		—		(45.9)		6.0
Separate account assets (5)		—		(30.3)		(9.6)		39.0		(0.9)
Liabilities
Investment and universal life contracts		—		—		(33.8)		18.0		(15.8)
Derivatives
Net derivative assets (liabilities)		0.2		0.2		—		—		0.4

	For the three months ended March 31, 2023
									Net purchases,
									sales, issuances
	Purchases		Sales		Issuances		Settlements		and settlements
	(in millions)
Assets
Fixed maturities, available-for-sale:
States and political subdivisions	$	—	$	—	$	—	$	(0.4)	$	(0.4)
Corporate		150.9		(3.6)		—		(22.0)		125.3
Commercial mortgage-backed securities		—		—		—		(0.2)		(0.2)
Collateralized debt obligations		121.3		—		—		(1.2)		120.1
Other debt obligations		190.9		—		—		(4.0)		186.9
Total fixed maturities, available-for-sale		463.1		(3.6)		—		(27.8)		431.7
Fixed maturities, trading		26.4		(3.5)		—		(0.4)		22.5
Separate account assets (5)		—		(202.0)		(4.1)		50.0		(156.1)
Liabilities
Investment and universal life contracts		—		—		(8.2)		4.4		(3.8)

(5) Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts.

Transfers (Table)

	For the three months ended March 31, 2024
	Transfers out		Transfers out		Transfers out		Transfers out
	of Level 1 into		of Level 2 into		of Level 3 into		of Level 3 into
	Level 3		Level 3		Level 1		Level 2
	(in millions)
Assets
Fixed maturities, available-for-sale:
Corporate	$	—	$	39.5	$	—	$	—
Other debt obligations		—		80.0		—		111.6
Total fixed maturities, available-for-sale		—		119.5		—		111.6

	For the three months ended March 31, 2023
	Transfers out		Transfers out		Transfers out		Transfers out
	of Level 1 into		of Level 2 into		of Level 3 into		of Level 3 into
	Level 3		Level 3		Level 1		Level 2
	(in millions)
Assets
Fixed maturities, available-for-sale:
Corporate	$	—	$	10.4	$	—	$	42.9
Collateralized debt obligations		—		—		—		15.2
Other debt obligations		—		218.3		—		—
Total fixed maturities, available-for-sale		—		228.7		—		58.1

Quantitative Information about Level 3 Fair Value Measurements (Table)

	March 31, 2024
	Assets /
	(liabilities)
	measured at		Valuation	Unobservable	Input/range of				Weighted
	fair value		technique(s)	input description	inputs				average
	(in millions)
Assets
Fixed maturities, available-for-sale:
Corporate	$	1,930.9	Discounted cash flow	Discount rate (1)	5.2	%   -	20.6	%	11.0	%
				Earnings before interest, taxes, depreciation and amortization multiple			3.66	x	3.66	x
				Illiquidity premium	0	basis points (“bps”) -	791	bps	147	bps
				Comparability adjustment	0	bps-	188	bps	119	bps
Collateralized debt obligations		98.6	Discounted cash flow	Discount rate (1)			4.4	%	4.4	%
				Comparability adjustment			12	bps	12	bps
Other debt obligations		898.8	Discounted cash flow	Discount rate (1)	5.2	%   -	11.7	%	7.7	%
				Illiquidity premium	69	bps-	429	bps	330	bps
				Comparability adjustment	(21)	bps-	121	bps	60	bps
Fixed maturities, trading		265.4	Discounted cash flow	Discount rate (1)	10.8	%   -	20.6	%	12.7	%
Other investments		163.9	Discounted cash flow	Discount rate (1)	12.0	%   -	13.5	%	12.4	%
				Probability of default	6.0	%   -	10.0	%	8.3	%
				Potential loss severity	87.0	%   -	100.0	%	91.4	%
Separate account assets		725.7	Discounted cash flow - real estate	Discount rate (1)	6.5	%   -	10.0	%	7.1	%
				Terminal capitalization rate	5.2	%   -	9.5	%	5.8	%
				Average market rent growth rate	2.0	%   -	3.7	%	2.7	%
			Discounted cash flow - real estate debt	Loan to value	45.6	%   -	72.0	%	58.9	%
				Market interest rate	5.3	%   -	8.1	%	6.3	%

Liabilities
Investment and universal life contracts (4)	(174.7)	Discounted cash flow	Long duration interest rate	2.7	%   -	5.0	%	(2)	4.2	%
			Long-term equity market volatility	15.3	%   -	47.1	%		21.4	%
			Nonperformance risk	0.6	%   -	1.3	%		1.0	%
			Lapse rate	0.0	%   -	55.0	%		9.1	%
			Mortality rate	See note (3)

	December 31, 2023
	Assets /
	(liabilities)
	measured at		Valuation	Unobservable	Input/range of					Weighted
	fair value		technique(s)	input description	inputs					average
	(in millions)
Assets
Fixed maturities, available-for-sale:
Corporate	$	1,997.4	Discounted cash flow	Discount rate (1)		4.9	%   -	24.2	%	12.0	%
				Earnings before interest, taxes, depreciation and amortization multiple				3.25	x	3.25	x
				Illiquidity premium		30	bps-	483	bps	121	bps
				Comparability adjustment		67	bps-	217	bps	141	bps
Collateralized debt obligations		74.6	Discounted cash flow	Discount rate (1)				4.1	%	4.1	%
				Comparability adjustment				20	bps	20	bps
Other debt obligations		879.5	Discounted cash flow	Discount rate (1)		5.0	%   -	10.6	%	7.4	%
				Illiquidity premium		69	bps-	650	bps	337	bps
				Comparability adjustment		(20)	bps-	213	bps	92	bps
Fixed maturities, trading		203.9	Discounted cash flow	Discount rate (1)		11.4	%   -	22.3	%	13.3	%
Other investments		163.2	Discounted cash flow	Discount rate (1)		12.0	%   -	13.5	%	12.6	%
				Probability of default		6.0	%   -	10.0	%	8.5	%
				Potential loss severity		87.0	%   -	100.0	%	90.7	%
Separate account assets		752.8	Discounted cash flow - real estate	Discount rate (1)		6.5	%   -	10.0	%	7.5	%
				Terminal capitalization rate		5.3	%   -	9.5	%	6.1	%
				Average market rent growth rate		2.0	%   -	3.7	%	2.9	%
			Discounted cash flow - real estate debt	Loan to value		46.0	%   -	72.0	%	55.3	%
				Market interest rate		5.3	%   -	8.1	%	6.4	%

Liabilities
Investment and universal life contracts (4)	(115.5)	Discounted cash flow	Long duration interest rate	2.5	%   -	4.8	%	(2)	4.0	%
			Long-term equity market volatility	15.5	%   -	40.1	%		19.2	%
			Nonperformance risk	0.8	%   -	1.6	%		1.1	%
			Lapse rate	0.0	%   -	55.0	%		7.0	%
			Mortality rate	See note (3)

(1) Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any illiquidity or other adjustments, where applicable.

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

(3) This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation.

(4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported.

Fair Value Option (Table)

	March 31, 2024		December 31, 2023
	(in millions)
Other loans of consolidated VIE (1)
Fair value (1)	$	163.9	$	163.2
Aggregate contractual principal		171.3		167.1

(1) Reported with other investments on the consolidated statements of financial position.See Note 3, Investments, for additional information relating to other loans more than 90 days past due or in non - accrual status.

The following table presents information regarding the consolidated statements of operations impact of assets for which the fair value option was elected.

	For the three months ended March 31,
	2024		2023
	(in millions)
Other loans of consolidated VIE
Change in fair value pre-tax loss - instrument specific credit risk	$	(5.3)	$	—
Change in fair value pre-tax loss (1)		(5.3)		—
Interest income (2)		7.2		—

(1) Reported in net realized capital gains (losses) on the consolidated statements of operations.

(2) Reported in net investment income on the consolidated statements of operations and recorded based on the effective interest rate of the loans.

Financial Instruments Not Reported at Fair Value (Table)

	March 31, 2024
					Fair value hierarchy level
	Carrying amount		Fair value		Level 1		Level 2		Level 3
	(in millions)
Assets (liabilities)
Mortgage loans	$	20,294.5	$	18,500.2	$	—	$	—	$	18,500.2
Policy loans		818.6		852.6		—		—		852.6
Other investments		266.1		258.3		—		134.1		124.2
Cash and cash equivalents		1,573.9		1,573.9		1,550.1		23.8		—
Reinsurance deposit receivable		5,713.4		5,118.6		—		—		5,118.6
Cash collateral receivable		3.6		3.6		3.6		—		—
Investment contracts		(34,288.9)		(32,505.3)		—		(8,267.4)		(24,237.9)
Short-term debt		(50.7)		(50.7)		—		(50.7)		—
Long-term debt		(3,931.5)		(3,728.4)		—		(3,725.8)		(2.6)
Separate account liabilities		(155,827.7)		(154,874.9)		—		—		(154,874.9)
Bank deposits (1)		(411.8)		(397.6)		—		(397.6)		—
Cash collateral payable		(220.3)		(220.3)		(220.3)		—		—

	December 31, 2023
					Fair value hierarchy level
	Carrying amount		Fair value		Level 1		Level 2		Level 3
	(in millions)
Assets (liabilities)
Mortgage loans	$	20,142.8	$	18,505.0	$	—	$	—	$	18,505.0
Policy loans		809.3		846.3		—		—		846.3
Other investments		268.6		260.9		—		142.9		118.0
Cash and cash equivalents		936.3		936.3		913.9		22.4		—
Reinsurance deposit receivable		6,078.6		5,487.7		—		—		5,487.7
Cash collateral receivable		38.7		38.7		38.7		—		—
Investment contracts		(33,937.9)		(32,166.7)		—		(7,828.1)		(24,338.6)
Short-term debt		(61.1)		(61.1)		—		(61.1)		—
Long-term debt		(3,930.9)		(3,754.5)		—		(3,754.1)		(0.4)
Separate account liabilities		(152,229.2)		(151,280.9)		—		—		(151,280.9)
Bank deposits (1)		(399.5)		(385.3)		—		(385.3)		—
Cash collateral payable		(176.9)		(176.9)		(176.9)		—		—

(1) Excludes deposit liabilities without defined or contractual maturities.