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v3.23.1

Market Risk Benefits (Tables) | 3 Months Ended
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Mar. 31, 2023
Market Risk Benefits |
Summary of disaggregated MRB amounts in an asset and liability position (Table) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, 2023 |  | December 31, 2022
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Net asset | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Net asset
​ |  | Asset |  | Liability |  | (liability) |  | Asset |  | Liability |  | (liability)
​ | ​ | (in millions)
Retirement and Income Solutions: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Individual variable annuities | ​ | $ | 107.3 | ​ | $ | 170.4 | ​ | $ | (63.1) |  | $ | 109.2 |  | $ | 181.4 |  | $ | (72.2)
Principal Asset Management - Principal International: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |  |  |  |  |  |  |  |
Asia: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Guaranteed pension | ​ | ​ | — | ​ | ​ | 24.0 | ​ | ​ | (24.0) |  |  | — |  |  | 26.0 |  |  | (26.0)
Total MRB per consolidated statements of financial position | ​ | $ | 107.3 | ​ | $ | 194.4 | ​ | $ | (87.1) |  | $ | 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) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, 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) |  | 3.67 | - | 3.80 | % | 3.73 | % | 3.97 | - | 4.12 | % | 4.04 | %
Long-term equity market volatility |  | 18.10 | - | 31.76 | % | 21.37 | % | 18.10 | - | 34.15 | % | 22.07 | %
Nonperformance risk |  | 0.93 | - | 2.00 | % | 1.71 | % | 0.90 | - | 1.96 | % | 1.65 | %
Lapse rate |  | 1.25 | - | 24.75 | % | 5.76 | % | 1.25 | - | 24.75 | % | 5.76 | %
Principal Asset Management - Principal International: |  | ​ |  | ​ |  | ​ |  |  |  |  |  |  | ​
Asia: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Guaranteed pension |  |  |  |  |  |  |  |  |  |  |  |  | ​
Long-term interest rate (1) |  | 3.93 | - | 4.08 | % | 4.00 | % | 3.80 | - | 3.98 | % | 3.88 | %
Long-term equity market volatility |  | 18.07 | - | 24.09 | % | 19.98 | % | 18.06 | - | 25.16 | % | 20.69 | %
Nonperformance risk |  | 0.66 | - | 1.63 | % | 1.35 | % | 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 three months ended | ​ | For the year ended
​ | ​ | March 31, 2023 | ​ | December 31, 2022
​ |  | ​ |  | Change in net |  | ​ |  | Change in net
​ | ​ | Change in input | ​ | MRB liability | ​ | Change in input | ​ | MRB liability
Long-term interest rate | ​ | Decreased | ​ | Unfavorable | ​ | Increased | ​ | Favorable
Equity markets | ​ | Increased | ​ | Favorable | ​ | Decreased | ​ | Unfavorable
Equity market volatilities | ​ | Decreased | ​ | Favorable | ​ | Increased | ​ | Unfavorable
Own nonperformance risk | ​ | Increased | ​ | Favorable | ​ | 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 three months ended |  | For the year ended
​ | ​ | March 31, 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 | ​ |  | (19.8) | ​ |  | (90.1)
Benefit payments | ​ |  | 0.2 | ​ |  | 1.3
Changes in interest rates | ​ |  | (54.2) | ​ |  | 539.1
Changes in equity markets | ​ |  | 46.4 | ​ |  | (112.4)
Changes in equity index volatility | ​ |  | 30.6 | ​ |  | (50.2)
Actual policyholder behavior different from expected behavior | ​ |  | (2.0) | ​ |  | 1.5
Changes in future expected policyholder behavior | ​ |  | — | ​ |  | (6.1)
Changes in other future expected assumptions | ​ |  | — | ​ |  | (1.8)
Adjusted balance at end of period | ​ |  | (102.7) | ​ |  | (103.9)
Effect of changes in nonperformance risk at end of period | ​ |  | 39.6 | ​ |  | 31.7
Balance at end of period | ​ | $ | (63.1) | ​ | $ | (72.2)
​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average attained age of policyholders (years) (1) | ​ |  | 67.5 | ​ |  | 67.4
Net amount at risk (2) | ​ | $ | 299.8 | ​ | $ | 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. Increases in the equity markets and decreases in interest rates resulted in a decrease in the net amount at risk in 2023. 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 three months ended |  | For the year ended
​ | ​ | March 31, 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 | ​ |  | (2.8) | ​ |  | (7.1)
Benefit payments | ​ |  | 3.7 | ​ |  | 9.5
Changes in interest rates | ​ |  | 0.7 | ​ |  | 3.9
Changes in equity markets | ​ |  | 0.1 | ​ |  | (1.0)
Actual policyholder behavior different from expected behavior | ​ |  | 0.4 | ​ |  | 0.7
Foreign currency translation adjustment | ​ | ​ | 0.1 | ​ | ​ | —
Adjusted balance at end of period | ​ |  | (22.6) | ​ |  | (24.8)
Effect of changes in nonperformance risk at end of period | ​ |  | (1.4) | ​ |  | (1.2)
Balance at end of period | ​ | $ | (24.0) | ​ | $ | (26.0)
​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average attained age of policyholders (years) (1) | ​ |  | 50.0 | ​ |  | 50.0
Net amount at risk (2) | ​ | $ | 87.4 | ​ | $ | 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.

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