NEW YORK (AP) — Fitch Ratings on Thursday revised its ratings outlook on Principal Financial Group Inc. and its subsidiaries to "stable" from "negative," citing improvement in the financial services company's investment position.
Analyst Bruce Cox noted that Principal Financial's gross unrealized investment loss position has improved significantly in recent quarters. As of March 31, it was $1.1 billion, compared with $1.7 billion as of Sept. 30, 2010. Operating earnings meanwhile were $845 million in 2010, up 15 percent from 2009, Cox wrote.
He noted that Principal Financial is putting more emphasis on its fee-based businesses, such as asset management and certain pension products. That should mitigate losses from a scale-back in the company's institutional spread business and the sale of its health insurance business, Cox noted.
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Cox affirmed the "AA-" insurer financial strength ratings on the company's primary life insurance company subsidiaries and the "A-" rating on its holding company senior debt rating. Both are investment-grade ratings.
Shares of Principal Financial Group gained 39 cents to close at $30.41.
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