Principal - Important Announcement: Strategic review results
Sept. 30 is end date for retail applications
As Principal's focus transitions to the business market, they need to receive any applications/Drop Tickets for retail business in the home office by Sept. 30, 2021. Once received, Principal will work with you to get these cases underwritten and placed inforce in a timely manner. In most instances, this will be by year-end. However, as long as an application is received by Sept. 30, there isn’t a specific cutoff date to have policies inforce as long as normal requirement receipt dates are met. Please refer to the updated FAQ document below for more information.
** 07/20/2021 **
As previously announced, Principal is exiting the retail consumer insurance market later this year. Going forward they will be focusing exclusively on the business market, particularly small to medium-sized businesses. Business owners and key executives have been a strategic focus for Principal for more than a decade and they are looking to further invest and build even more differentiating capabilities to serve these customers. It is important to note that there is currently no changes in service an we are still accepting retail consumer applications through the end of the third quarter.
Principal's product portfolio remains largely the same as of this announcement with no plans to impact current conversion privileges and other consumer focused administration. Please refer to this FAQ piece that was released yesterday to further detail and answer many questions that have been asked.
Today, Principal announced key decisions from the review that support ongoing growth and enable them to deliver meaningful products and services to their customers and partners. Principal has reinforced and strengthened their commitment to their retirement, global asset management, and U.S. specialty benefits and protection businesses – building on their deep expertise and experience helping millions of customers with integrated and differentiated solutions. As Principal intensifies their focus in these areas, they will exit select products and segments in the future.
Before we get into the details, it’s important to note:
- Changes to Principal's future offerings do not impact policies, contracts, or agreements currently in place with Principal. They will continue to support the needs of their customers and partners.
- Pending applications or contracts will still be processed and honored. This announcement does not halt anything that is currently in flight.
- Ensuring that Principal's high standards for customer-centricity are met and will be a cornerstone as they pursue strategic alternatives for those blocks of business.
U.S. annuities and U.S. individual life insurance
A key element of this review centered on focusing their resources, talent, and investment on opportunities where Principal can deliver the greatest value and benefits to their stakeholders, including their customers and partners. Greater focus and discipline will allow them to increase support and help grow areas where they have unmatched expertise and deep relationships.
In U.S. retail annuities, Principal will continue to sell variable annuities, Pension Risk Transfer, and Principal Pension BuilderSM, all of which play an important role within their complete suite of retirement solutions and support our worksite strategy.
Principal will exit U.S. retail fixed annuities—discontinuing new sales of its deferred annuities, individual payout annuities, and indexed annuities by the end of the third quarter 2021—and will pursue strategic transactions, including divestiture, of the related in-force blocks.
In U.S. life insurance, Principal's product portfolio remains largely the same as a result of this announcement. What’s different is they will focus exclusively on the business market—particularly small to medium-sized businesses (SMBs). Business owners and key executives have been a strategic focus for us for more than 10 years and today about 60 percent of our sales come from the business market. Principal will look to further invest and build even more differentiating capabilities to serve this customer segment. Their nonqualified deferred compensation business will continue to be a critical component of this strategy.
In U.S. individual life insurance, the company will discontinue new sales of its products to retail customers by the end of the third quarter 2021. Additionally, Principal will pursue strategic transactions for the in-force universal life with secondary guarantee (ULSG) block, as well as other related in-force blocks.
Principal will work with their distribution partners to execute this shift in strategy, giving you and your financial professionals ample time to adjust. Principal will share additional information, but please be assured that as of today, there will be no changes in service.