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

For the three months ended June 30, 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

as of

April 1,

net income

comprehensive

settlements

into

out of

June 30,

2024

(2)

income (3)

(4)

Level 3

2024

(in millions)

Assets

Fixed maturities, available-for-sale:

States and political subdivisions

$

68.2

$

—

$

(0.7)

$

2.0

$

15.5

$

—

$

85.0

Corporate

2,202.6

(1.6)

(17.7)

25.9

19.4

—

2,228.6

Commercial mortgage-backed securities

2.9

—

(0.1)

—

2.8

Collateralized debt obligations

99.4

—

(1.1)

6.4

—

104.7

Other debt obligations

1,166.4

—

(4.7)

132.6

55.6

—

1,349.9

Total fixed maturities, available-for-sale

3,539.5

(1.6)

(24.2)

166.8

90.5

—

3,771.0

Fixed maturities, trading

470.2

1.8

—

(26.8)

—

445.2

Other investments

165.8

(6.1)

—

13.8

—

173.5

Separate account assets (1)

725.6

(6.3)

—

(0.9)

—

718.4

Liabilities

Investment and universal life contracts

(174.7)

(17.2)

—

(38.1)

—

(230.0)

Funds withheld payable embedded derivative

2,764.1

232.9

—

2,997.0

Derivatives

Net derivative assets (liabilities)

0.9

0.3

—

0.8

—

2.0


	For the three months ended June 30, 2023
	Beginning						Net						Ending
	asset/		Total realized/unrealized				purchases,						asset/
	(liability)		gains (losses)				sales,						(liability)
	balance		Included		Included in		issuances						balance
	as of		in net		other		and		Transfers		Transfers		as of
	April 1,		income		comprehensive		settlements		into		out of		June 30,
	2023		(2)		income (3)		(4)		Level 3		Level 3		2023

	(in millions)
Assets
Fixed maturities, available-for-sale:
States and political subdivisions	$	72.1	$	—	$	(1.7)	$	(0.4)	$	—	$	—	$	70.0
Corporate		1,654.5		(3.8)		(3.5)		92.5		79.1		—		1,818.8
Commercial mortgage-backed securities		3.3		—		(0.1)		—		—		—		3.2
Collateralized debt obligations		162.2		—		(0.9)		25.2		—		(120.9)		65.6
Other debt obligations		866.5		0.6		(14.6)		64.3		—		—		916.8
Total fixed maturities, available-for-sale		2,758.6		(3.2)		(20.8)		181.6		79.1		(120.9)		2,874.4
Fixed maturities, trading		156.1		(0.3)		—		15.2		—		—		171.0
Other investments		1.9		—		—		—		—		—		1.9
Separate account assets (1)		893.8		(16.1)		—		(39.6)		—		—		838.1

Liabilities
Investment and universal life contracts		(55.5)		(13.0)		—		(1.1)		—		—		(69.6)
Funds withheld payable embedded derivative		3,026.2		93.9		—		—		—		—		3,120.1

Derivatives
Net derivative assets (liabilities)		4.0		(4.8)		—		1.0		—		—		0.2

For the six months ended June 30, 2024

Beginning

Net

Ending

asset/

Total realized/unrealized

purchases,

asset/

(liability)

gains (losses)

sales,

(liability)

balance

Included

Included in

issuances

balance

as of

in net

other

and

Transfers

as of

January 1,

income

comprehensive

settlements

into

out of

June 30,

2024

(2)

income (3)

(4)

Level 3

2024

(in millions)

Assets

Fixed maturities, available-for-sale:

States and political subdivisions

$

69.9

$

—

$

(2.0)

$

1.6

$

15.5

$

—

$

85.0

Corporate

2,305.9

(6.8)

(28.9)

(100.5)

58.9

—

2,228.6

Commercial mortgage-backed securities

3.0

—

(0.2)

—

2.8

Collateralized debt obligations

75.4

—

(2.8)

32.1

—

104.7

Other debt obligations

1,182.6

—

(12.0)

155.3

135.6

(111.6)

1,349.9

Total fixed maturities, available-for-sale

3,636.8

(6.8)

(45.7)

88.3

210.0

(111.6)

3,771.0

Fixed maturities, trading

415.8

(1.7)

—

31.1

—

445.2

Other investments

165.1

(11.4)

—

19.8

—

173.5

Separate account assets (1)

752.8

(32.6)

—

(1.8)

—

718.4

Liabilities

Investment and universal life contracts

(115.5)

(60.6)

—

(53.9)

—

(230.0)

Funds withheld payable embedded derivative

2,567.1

429.9

—

2,997.0

Derivatives

Net derivative assets (liabilities)

5.5

(4.7)

—

1.2

—

2.0


	For the six months ended June 30, 2023
	Beginning						Net						Ending
	asset/		Total realized/unrealized				purchases,						asset/
	(liability)		gains (losses)				sales,						(liability)
	balance		Included		Included in		issuances						balance
	as of		in net		other		and		Transfers		Transfers		as of
	January 1,		income		comprehensive		settlements		into		out of		June 30,
	2023		(2)		income (3)		(4)		Level 3		Level 3		2023

	(in millions)
Assets
Fixed maturities, available-for-sale:
States and political subdivisions	$	70.9	$	—	$	(0.1)	$	(0.8)	$	—	$	—	$	70.0
Corporate		1,568.3		(3.8)		(10.1)		217.8		89.5		(42.9)		1,818.8
Commercial mortgage-backed securities		3.4		—		—		(0.2)		—		—		3.2
Collateralized debt obligations		56.2		—		0.2		145.3		—		(136.1)		65.6
Other debt obligations		467.8		0.6		(21.1)		251.2		218.3		—		916.8
Total fixed maturities, available-for-sale		2,166.6		(3.2)		(31.1)		613.3		307.8		(179.0)		2,874.4
Fixed maturities, trading		134.0		(0.7)		—		37.7		—		—		171.0
Other investments		1.9		—		—		—		—		—		1.9
Separate account assets (1)		1,034.9		(1.1)		—		(195.7)		—		—		838.1

Liabilities
Investment and universal life contracts		(46.4)		(18.3)		—		(4.9)		—		—		(69.6)
Funds withheld payable embedded derivative		3,652.8		(532.7)		—		—		—		—		3,120.1

Derivatives
Net derivative assets (liabilities)		(3.4)		2.6		—		1.0		—		—		0.2

(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

For the six months ended

June 30,

2024

2023

2024

2023

(in millions)

Assets

Fixed maturities, available-for-sale:

Corporate

$

(1.6)

$

(3.8)

$

(6.6)

$

(3.8)

Other debt obligations

—

0.6

—

0.6

Total fixed maturities, available-for-sale

(1.6)

(3.2)

(6.6)

(3.2)

Fixed maturities, trading

2.2

(0.4)

2.1

(0.8)

Other investments

(3.2)

—

(6.6)

—

Separate account assets

(31.5)

(30.9)

(19.1)

(38.2)

Liabilities

Investment and universal life contracts

(49.5)

(13.7)

(59.5)

(17.7)

Funds withheld payable embedded derivative

232.9

93.9

429.9

(532.7)

Derivatives

Net derivative assets (liabilities)

0.9

(3.1)

(3.6)

4.2

(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

For the six months ended

June 30,

2024

2023

2024

2023

(in millions)

Assets

Fixed maturities, available-for-sale:

States and political subdivisions

$

(0.7)

$

(1.7)

$

(2.0)

$

(0.1)

Corporate

(17.5)

(1.0)

(30.3)

(9.2)

Collateralized debt obligations

(0.3)

(0.2)

(3.7)

(0.3)

Other debt obligations

(4.7)

(13.4)

(12.7)

(20.0)

Total fixed maturities, available-for-sale

(23.2)

(16.3)

(48.7)

(29.6)

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

For the three months ended June 30, 2024

Net purchases,

sales, issuances

Purchases

Sales

Issuances

Settlements

and settlements

(in millions)

Assets

Fixed maturities, available-for-sale:

States and political subdivisions

$

2.5

$

—

$

—

$

(0.5)

$

2.0

Corporate

141.9

(18.3)

—

(97.7)

25.9

Commercial mortgage-backed securities

—

(0.1)

Collateralized debt obligations

6.4

—

6.4

Other debt obligations

154.1

—

(21.5)

132.6

Total fixed maturities, available-for-sale

304.9

(18.3)

—

(119.8)

166.8

Fixed maturities, trading

33.8

(23.5)

—

(37.1)

(26.8)

Other investments

66.8

—

(53.0)

13.8

Separate account assets (5)

—

(0.9)

—

(0.9)

Liabilities

Investment and universal life contracts

—

(56.3)

18.2

(38.1)

Derivatives

Net derivative assets (liabilities)

0.1

0.7

—

0.8


	For the three months ended June 30, 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		122.2		(8.1)		—		(21.6)		92.5
Collateralized debt obligations		25.2		—		—		—		25.2
Other debt obligations		69.1		—		—		(4.8)		64.3
Total fixed maturities, available-for-sale		216.5		(8.1)		—		(26.8)		181.6
Fixed maturities, trading		15.8		(0.1)		—		(0.5)		15.2
Separate account assets (5)		—		(21.6)		(25.2)		7.2		(39.6)

Liabilities
Investment and universal life contracts		—		—		(10.7)		9.6		(1.1)

Derivatives
Net derivative assets (liabilities)		—		1.0		—		—		1.0

For the six months ended June 30, 2024

Net purchases,

sales, issuances

Purchases

Sales

Issuances

Settlements

and settlements

(in millions)

Assets

Fixed maturities, available-for-sale:

States and political subdivisions

$

2.5

$

—

$

—

$

(0.9)

$

1.6

Corporate

277.4

(239.4)

—

(138.5)

(100.5)

Commercial mortgage-backed securities

—

(0.2)

Collateralized debt obligations

32.1

—

32.1

Other debt obligations

259.4

(59.1)

—

(45.0)

155.3

Total fixed maturities, available-for-sale

571.4

(298.5)

—

(184.6)

88.3

Fixed maturities, trading

221.1

(120.5)

—

(69.5)

31.1

Other investments

118.7

—

(98.9)

19.8

Separate account assets (5)

—

(30.3)

(10.5)

39.0

(1.8)

Liabilities

Investment and universal life contracts

—

(90.1)

36.2

(53.9)

Derivatives

Net derivative assets (liabilities)

0.3

0.9

—

1.2


	For the six months ended June 30, 2023
									Net purchases,
									sales, issuances
	Purchases		Sales		Issuances		Settlements		and settlements

	(in millions)
Assets
Fixed maturities, available-for-sale:
States and political subdivisions	$	—	$	—	$	—	$	(0.8)	$	(0.8)
Corporate		273.1		(11.7)		—		(43.6)		217.8
Commercial mortgage-backed securities		—		—		—		(0.2)		(0.2)
Collateralized debt obligations		146.5		—		—		(1.2)		145.3
Other debt obligations		260.0		—		—		(8.8)		251.2
Total fixed maturities, available-for-sale		679.6		(11.7)		—		(54.6)		613.3
Fixed maturities, trading		42.2		(3.6)		—		(0.9)		37.7
Separate account assets (5)		—		(223.6)		(29.3)		57.2		(195.7)

Liabilities
Investment and universal life contracts		—		—		(18.9)		14.0		(4.9)

Derivatives
Net derivative assets (liabilities)		—		1.0		—		—		1.0

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

Quantitative Information about Level 3 Fair Value Measurements (Table)


	June 30, 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	$	1,964.4	Discounted cash flow	Discount rate (1)	5.4	% -	26.6	%	11.0	%
				Earnings before interest, taxes, depreciation and amortization multiple			3.66	x	3.66	x
				Illiquidity premium	0	basis points (“bps”) -	791	bps	137	bps
				Comparability adjustment	0	bps -	800	bps	150	bps
Collateralized debt obligations		104.7	Discounted cash flow	Discount rate (1)			5.5	%	5.5	%
				Comparability adjustment			12	bps	12	bps
Other debt obligations		1,156.8	Discounted cash flow	Discount rate (1)	5.3	% -	14.5	%	8.3	%
				Illiquidity premium	0	bps -	275	bps	271	bps
				Comparability adjustment	(22)	bps -	454	bps	155	bps
Fixed maturities, trading		244.4	Discounted cash flow	Discount rate (1)	10.1	% -	16.4	%	12.5	%
Other investments		171.6	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		718.4	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	1.8	% -	4.5	%	2.7	%
			Discounted cash flow - real estate debt	Loan to value	45.6	% -	71.4	%	58.5	%
				Market interest rate	5.3	% -	7.4	%	6.2	%


Liabilities
Investment and universal life contracts (4)	(230.0)	Discounted cash flow	Long duration interest rate	2.8	% -	5.1	%	(2)	4.4	%
			Long-term equity market volatility	14.7	% -	41.6	%		20.5	%
			Nonperformance risk	0.6	% -	1.3	%		1.0	%
			Lapse rate	0.0	% -	55.0	%		10.0	%
			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.

Financial Instruments Not Reported at Fair Value (Table)

June 30, 2024

Fair value hierarchy level

Carrying amount

Fair value

Level 1

Level 2

Level 3

(in millions)

Assets (liabilities)

Mortgage loans

$

20,253.1

$

18,421.6

$

—

$

—

$

18,421.6

Policy loans

818.2

840.2

—

840.2

Other investments

283.0

273.6

—

145.1

128.5

Cash and cash equivalents

1,738.0

1,712.7

25.3

—

Reinsurance deposit receivable

5,383.1

4,806.2

—

4,806.2

Cash collateral receivable

3.0

—

Investment contracts

(33,769.5)

(32,104.0)

—

(7,852.2)

(24,251.8)

Short-term debt

(49.9)

—

(49.9)

—

Long-term debt

(3,932.2)

(3,692.1)

—

(3,689.6)

(2.5)

Separate account liabilities

(155,603.3)

(154,669.4)

—

(154,669.4)

Bank deposits (1)

(433.1)

(426.2)

—

(426.2)

—

Cash collateral payable

(324.2)

—


	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.