The dental segment faced competitive pressures, with new sales rates being competitive and some easing in renewal rates beginning to happen.

The pension risk transfer pipeline was smaller than expected in the second quarter, and the company faced challenges in achieving targeted returns.

Volatility in the markets impacted the second quarter fee revenue, with a market drop in April driving daily averages lower for the quarter.

Principal Financial Group Inc ( NASDAQ:PFG ) was recognized externally for its leadership, earning accolades such as being named one of the 2025 Best Places to Work for Disability Inclusion and receiving a 2025 CSO award for its digital ID verification initiative.

The Specialty Benefit business saw strong earnings growth of 10%, with a focus on pricing discipline leading to strong underwriting performance and margin expansion.

The company returned $320 million of capital to shareholders in the second quarter, including $150 million of share repurchases, and raised its common stock dividend for the eighth consecutive quarter.

Principal Financial Group Inc ( NASDAQ:PFG ) reported an 18% increase in EPS over the second quarter of 2024, supported by revenue growth, strong margin and expense discipline.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Assets Under Management (AUM): $753 billion, a 5% increase over the sequential quarter and an 8% increase over Q2 2024.

Story Continues

Q & A Highlights

Q: Can you provide an update on the company’s expense management strategy for the second half of the year? A: Deanna Strable, President and COO, mentioned that the company has a proven track record of aligning revenue and expenses. CFO Joel Pitz added that they will continue to actively manage expenses in line with revenue, as evidenced by margin expansion. They remain focused on expense management while investing in the business.

Q: What is the outlook for spread balances within Retirement and Income Solutions (RIS) for the rest of the year? A: Chris Littlefield, President of RIS, explained that investment-only issuance was lower due to fewer opportunities meeting targeted returns. The pension risk transfer (PRT) pipeline was smaller, but they remain disciplined in prioritizing returns over volume. The outlook for PRT depends on the second-half pipeline and market competitiveness.

Q: Is the pension risk transfer (PRT) market becoming more competitive, and how does it affect your strategy? A: Deanna Strable noted that while the PRT pipeline was smaller, they continue to convert defined benefit clients into PRT. Chris Littlefield added that they expect to land within their historical range of $2.5 billion to $3 billion in PRT sales, depending on the pipeline and returns.

Q: Can you elaborate on the performance fees in Principal Asset Management and the outlook for the rest of the year? A: Kamal Bhatia, CEO of Principal Asset Management, stated that performance fees were driven by alternative debt strategies, reflecting strong execution. They expect performance fees to be similar to 2024 levels, with transaction and borrower fees returning to normal levels.

Q: What is the strategy for capturing 401(k) outflows into other areas of the business, particularly IRAs and advising? A: Chris Littlefield explained that they are focused on building capabilities to offer advice and solutions to participants, partnering with advisors to provide necessary guidance. This is a long-term strategy aimed at helping participants make informed decisions about their retirement savings.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.