Principal Financial (PFG) 26 Apr 242024 Q1 Earnings call transcript

Good morning, and welcome to the Principal Financial Group First Quarter 2024 Financial Results Conference Call. There will be a question-and-answer session after the speakers have completed their prepared remarks. [Operator Instructions]. I would now like to turn the conference call over to Humphrey Lee, Vice President of Investor Relations.

Thank you, and good morning. Group's XXXX Financial Conference Principal to First Earnings Quarter Call. Welcome

call materials on related always, are to As investor.principal.com. today's available at our website

a will safe and Following the CEO, of Houston; Dan harbor CFO, some deliver provision, Strable, prepared remarks. Deanna reading

call up senior also for then available Other will questions. the will members for We be Q&A. open of management

and could company recent or with of Securities comments and discussed made Securities contain uncertainties them the within in strategy. filed statements the report new results the events Risks during Private are may those the information, revise Some U.S. most company's XX-K or that company annual meaning to Reform Litigation does from differ the to reflect The changes Commission. Act. forward-looking update materially this conference the not implied of subsequent Exchange on call actual or expressed Form cause by in

made to measures Reconciliations conference may of this call and our the some be the found most refer to the comments of GAAP directly Dan? financial comparable in may financial Additionally, slide supplement release, U.S. measures. measures during non-GAAP financial earnings non-GAAP presentation. financial

welcome the morning, will from and and our Deanna focus call. on results key results our everyone Humphrey, strong I for to highlights to will as customers position. details the shareholders. milestones strategy This and we and quarter with additional discipline Thanks, discuss first follow continue and our on our execute capital and with deliver

to and XXXX long-term while our We management. to for shareholders. outlook on returning balancing innovation $X.XX share, XX% remain as was capital of excess over disciplined we million growth non-GAAP our year Principal. financial XXXX. EPS well expense focus our targets. continue positioned well $XXX deliver for the quarter diluted first of of the an enterprise, businesses on XXXX or earnings Across We to and in The good for a Investing in quarter to start first increase growth as operating reported per

including We aligned of dividend returned repurchases. the to ratio. contributed raised capital market quarter, XX% We with $XXX million million favorable total quarter the managed first fourth and to AUM stock company targeted sales of $XXX of our $XXX more quarter. payout share dividend consecutive common than Strong at of performance for the the shareholders billion in our end

as recent continued company We after institutional cash total Management, adjusting saw positive generated to PGI investments. $X.X estate the Principal generated flow for Asset in positive AUM investors, redemption on fixed real nearly flow and demand attract of calls. billion PGI for private that we net income we In cash net discussed specialty renewed

In strong addition, the flows quarter. account in also were general

PGI than offset ended market quarter Chile. fund the billion, across currency our X mutual flow first wins net flow driven sales U.S. in was strong cash best were AUM. performance positive were and in sales. equities quarter by in the sales by International XXXX, in including primarily of was by foreign billion and a It net for strongest more reported fund total sales quarter, Brazil. quarter the mutual securities. Principal driven years with in Favorable robust $XXX cash preferred headwinds, strong rebound International $X Principal since

into from investors our based will While could that cutting low assets to higher-yielding on duration persistently the near conversations optimistic continue and and customers partners. with remain unemployment keep longer term, high inflation Fed engagements money in and we and rates distribution the move

investing Margins revenue the Turning generation we and first the retirement, earnings future high continue and of remained quarter. growth growth. on to U.S. in RIS for revenue end generated as to our while stable at strong guidance, focus

matches. remain of deposits, employer participant as well as in increases strong healthy fundamentals with deferrals retirement the retention and Importantly, our recurring business contract

pipeline XXXX across the a industry of sales LIMRA PRT $X.X and retirement $XXX over sales a first Total grew on ago XXXX on released PRT of This #X building risk and of XX X% rankings included the sales year million quarter, based transfer billion contracts. more than in remains number and quarter, in pension strong. premium contracts. ranked Principal for for were #X in recently the

our for are We in benefit attractive the top provider and PRT only the leadership supported business. metrics, this market position X solidifying our both in defined by market-leading

history optimistic with leverage to seeing our momentum we're retirement position rule full industry This related and same and favorable with regulatory fiduciary revised a we its under adapting continue to we'll Labor We of continuing this finding meet Department investment week, a customer and regulatory the change and platforms. the across market has final exemptions. retirement rule. effectively latest while are Principal to in solutions, of do on advice suite of ERISA needs, to published our the responding

the and work We sponsors we intermediaries with to with, plan are it means analyzing and participants. final rule what our along

protected plans we concerned within and access of retirement financial financial meaningful creating firms. tools importance costs workplace that, consumer positive that on to education language remain the support encouraged educational savers for are affirming with will We to unintended compliance have behaviors. an limiting retirement of the of DOL said Having confirmed and that significant it enforces advice top the savings consequence

than our the Protection, an and business to XXXX. net market. first demonstrating and sales, increase over by on drove employment business, of of wage the net growth and premium competitive growth, small specialty fees benefits advantage unserved X% Benefits midsized record is focusing new half from More quarter this In in with along

grow with to continue relationships industry the We partners and customers. by deepening distribution than faster with our key

increase first the business XXXX, the market. premium insurance including over XX% for block in total life a of the quarter and X% increased The fees

value continue drive and about the with partnerships More sales SMBs a that than market I'm create driving growth across and portfolio plan. remain on our quarter and half of enterprise. solutions distribution Principal markets, Our the on are focus to combined retirement focus product our our confident important higher-growth total excited part business nonqualified opportunities across of first growth. were integrated and will

growth small it approach our ensuring highlight Before like I'd to commitments, sustainability supporting taken we've such progress Deanna, as of leadership the made strategy. and sustainability, matter Deanna? anniversary, over while trusted once continues for our of stakeholders is our time XXth this importance building by record of the turning that Building to against progress world's our since is relationships on recognition to XXXth accelerating named on XXXX. Approaching to the strong into across the promises companies recognizing business Principal future. a employees, a the And meaningful all strong growth a of in most business and our was again governance, goals. ethical We've ethical corporate businesses, track bedrock launched practices. Ethisphere keeping driving the always communities. execution This our one issues businesses to in recognized measured customers, our it be we've of diverse of list

key morning on financial as share morning, This our capital to details the contributors to everyone for Thanks, call. performance the quarter position. I'll the Good Dan. our well as of

reported was quarter income million. First $XXX net

business, was $XXX of minimal net income exited losses million credit $XX with Excluding million.

over quarter for growth We're expected on in and currency Excluding earnings line X% top full translation market to increased deliver ability confident pressured significant operating nearly our heading variances, XX% the XXXX than EPS and impacts. first $X.XX diluted targeted year. by to aided first into outperformance our growth was despite quarter. or quarter foreign we were of per This million the non-GAAP share. EPS the stronger $XXX XX%

from adjustment Slide impacts earnings variances than net $XX more on after million detailed per share. and variable a GAAP-only was tax regulatory by Life. impacted negative block in performance As significant pretax, dividend by offset $X.XX income a XX, non-GAAP encaje diluted million closed $XX and operating Favorable investment

macroeconomics equities fixed generally S&P performed and as the cap well as first at income favorable alternatives. the better in international while markets mid-cap, XXX quarter, than Looking and small were board, across the

XXX exposure you XX% to REITs. gauge that it a of While XX% market mid-cap, for international is down S&P exposure of and small portion S&P When equity is performance, PGI is our the AUM, the XX% equity XX% more note and XXX, our break approximately conventional is important diversified.

a fourth XX-month on exchange XXXX, headwind first both tailwind Foreign were trailing and a to a quarter of basis. rates but relative quarter remained the

revenue elevated seasonal of America the business, immaterial investment growth in remain be slightly some was deferred quarter-to-quarter. to well quarter's borrower headwinds had businesses, which more call Asia. Specialty $XX underwriting XXXX, redemptions and payroll performance XXXX, we business first offset margin XXXX. strong growth out as driven increased pretax the by by the be the as expected of following strong in than impacts remained discussed delivering by quarter business tax full million pattern RIS fees operating typical transaction exclude volatile exchange guidance the by which operating increased fees. The higher Benefits the financial the significant impact from first life, quarter higher the last on in macroeconomic in results NPI the end and net partially performance X% operating market the market on compensation first benefit at surrenders, seasonality the quarter first over operating comments approximately that long-term claims, income from Latin anticipated. well higher were PGI of in year. In quarter nonqualified confident of we the to targets. recent to was the The performance earnings pretax and margin half unfavorable increased the as dental and favorable X% favorable taxes, year, our in Turning of and earnings reflect by as and variances. and higher of first impact as foreign lower seasonality of XX% played first our range. our the first the we impacted earnings driven tend earnings muted XXXX, as growth high quarter underwriting of for can and experience. performance. units. PGI in higher of anchored Across over The pretax quarter guided of

Turning to capital liquidity. and

and billion our targeted a at are subsidiaries. with including million above billion position in our excess strong approximately capital the available and $X.X company, $XXX $XXX of in million $X.X is which level holding approximately We

RBC in capital approximately risk-based ratio was Our XXX%, target. with line our

to X, than including million $XXX As first million of $XXX $XXX we shown stock on common million share Slide the of more quarter, and in shareholders repurchases dividends. returned

free to We continue XX% full capital flow to for to year. on targeted XX% the expect deliver our

generation first last timing and capital on to is free capital the the always increases call, the discussed lightest of throughout As year. due flow in quarter quarter's

billion returning line the flow to for capital The to committed million announced throughout we to in the the an the first $X.X second stock our Last year our over in XX% are the paid ratio including a repurchases continue confidence XXXX million increase $X.X free capital common performance. $X.XX will dividend. This pace and excess growth quarter, night, dividend year, expect is second as $XXX the in to repurchases. full shareholders quarter share dividend to increase in overall demonstrates capital a $X.X We million increases. with share payable from and of of increase of $X.XX XX% targeted payout and deployment and continued dividend quarter

capital approach to dividends, to enhance in our be company our capital balanced and with remain to growth XX% the disciplined businesses, support share XX% will commitment targets business, a our and We the to both capital organic to disciplined significant maintaining common is exited and to our returned holding a income, stock strategic to target repurchases on and while long-term company to to continue XX% allowing capital XX% management focused capital net of XX% to and excluding Our and enterprise strategy life organic deployment. Based XX% we to on at to growth M&A liquidity to amount aligned deliver growth. shareholders. up support capabilities

power first last it paid and results, of in proud higher portfolio, The off the for high the call, a higher in office closing, of our aligned economic was scheduled one remains are had with in remainder loan the remains portfolio well conditions. relatively Discussed return mortgage variety our of quality, portfolio and demonstrating portfolio. positioned office January. quarter unchanged capital-efficient loan underlying our first liability metrics our the quarter profile last portfolio more growth, investment quarter. In healthy. and maturity from The Our am I of on commercial we and our

We X% free to are share, well flow and in to growth are equity earnings a XX% XX% per deliver and position including on return positioned in on strong XXXX increasing targets, capital conversion. our to XX% financial enterprise

to drive asset We and and a focused value. the are retirement, protection remarks. This Operator, executing of management drivers grounded strategy and call please our continuing shareholder open in for prepared our on questions. benefits on growth long-term concludes

[Operator Instructions].

The comes from first Krueger KBW. question Ryan of

allocations conversations you can forward? going discussed in flows. continued remarks in for on particular, first having yield My you're more products And the was color the you question I on improvement the optimism provide and guess, some to of PGI prepared in kind

the Kamal after us to and with Thanks for now call. vet. Halter. certainly with years He's here getting well-grounded X Ryan. replace joining Bhatia Yes. And is for an been industry Pat us having

So I'll you. ask to with that, directly to Kamal respond

question. for question a will your reiterate something Dan give data your thank from sentiment you points perspective. regarding Dan. Thanks, you I'll Ryan, see we Ryan, said additional with help you what that and just

very saw, you As on our good in sales mentioned, in years. also, real quarter had Dan side estate the had best we fixed as X fund as income. quarter with we a flow and institutional particularly we -- And mutual

I'll data So give X perspective. you from a global points

predict, retail. to as More but our expanding gatekeepers, client We particularly saw, have is our sophisticated retail higher with retail. seeing And equity base a strategies. across with turnaround are momentum see right interest one different you we flows signs we are fundamental difficult The interestingly, revenue in encouraging first now. of

come these significantly the will of sized that space, a the but some retail mandates they would base. trickle advisory from unlike continue are higher in be big That the And is change lumpy. to

you I with signs are other early is seeing point our real business. data would The estate to we

billion As funds the in call XX roughly know, These of which strategies accounts. capital separate over you next predominantly closed-end months. to real $X are we estate XX in project we commitments our to and institutional have unfunded

basis we as call value do emerge. are will that of selective on seeing capital in opportunities so signs a We market early these to have emerging but to

a of things sellers investors of as and that's would question our business, Latin strong for see last a thing particularly higher to plateau the are rest the in this that quarter reconciling Mexico the positive in for funds then to a year, rates momentum for where as business environment business space. And particularly in the creating very Management, and our our One highlight Global we is we anticipate you your Asset was finally Brazil and for America, I well. better with international on us in pension

help? So overall, continuing does from international see and client encouraging scale to our Ryan, base signs that in up. to continue interest institutional retail, segment more we is our

was going Yes, fee quarter. on was rate, in that And then great. points are on some the follow-up rate fee just in the expectations the basis XX What a PGI forward? year-over-year, down your

it within to and where At XX comments be range any here? to you'd like is would additional falls Yes. maybe XX said we and make that it Kamal

well, Sure. points of I'll give data maybe you a couple X data on that, Ryan, as points.

managing points. we As Dan our XX comfortable XX in to said, remain to data

market So our product just revenue. to impacted with the respect mix, which shift XQ, conditions did

if flows at As the were beginning in outflow communicated our positive. you heard earlier, our the you large exclude previously of XQ, comments

at in fixed of when the reviews think had other institutional flows based change late estate revenue quarter, -- also and real fourth point mutual The forward, income revenue the valuations the was the for would in flows. price look strong I U.S. additional XQ annual and which some on on I to moving funds effect. I some rate rate, real our estate the

investment funds. I and a higher credit go which see Our happen you it continuing fixed ours, good flows that where for traditionally our flows. particular, performance very would record are are retirement this And the also drives revenue to drives as would performance also highlight improved, margin mutual in of is and you improvement last in our substantial income in very, rate. keen fee quarter. also sales high-yield strength to attention had future reiterate higher In a for in pay management such to multi-asset I for space continuing which management strategies to the We track growth we rate. equity obviously that flows area and products fee retail because clients but generally is strong

So by, we the see year the goes performance as shift private towards help improving the well. which assets, should over as rate with

Suneet from of Kamath is question coming next Jefferies. The

guess the I fee. RIS to high we're that going all going longer a environment. on of for rate question in sort a Just be assumption we're on

way So years? other? level the maybe versus level seeing can any having the little on talk prior currently you're bit just a about impact participant at if one curious And if withdrawals what or participant the that's you maybe

Chris, please?

for little participant of Yes, question, basis, withdrawals. a Thanks we seeing in an Yes. the Suneet. retirement are participant a on uptick the bit

an going again, to account equity really So impact. increases the and actually that that's the both strong then take be when withdrawals of impacted has by markets, which values they

first the So participant in the balance and we withdrawals in the we'll are monitoring seeing be activity of some those elevated withdrawals year. elevated quarter, through

sorry. -- then, Chris go I'm ahead. Go sorry, Got it. And ahead.

comments to with might that and going higher make that through to benefiting way perhaps rate I fees first of see we any play in environment regards its that. how was capture just the terms

And Well, we we're extent the on accounts, in capture higher capture definitely definitely from getting some either rollover we bank are in interest that we are well. RIS. benefit the IRA seeing benefit in as those accounts we or benefit interest rates seeing SAFO, an as certainly, rates those of some to terms participant rollover higher

do that some withdrawals. of product, up do see we within benefit well. We on retirement they some we end withdrawals as capture the rollover those and our see extent So from to bank

you Sorry go ahead. to interrupt, can

was next. to where go going actually That's I

that sort when there And overall in a you I past, any a you know stat to actually can just on So the Dan, if retain? stat there? on you have you sense used industry? give is guys you a the assets us would the percentage to have how event, of that what think, don't curious if that, I us benefit like give of compare

don't generally that. competitors that on I Suneet, think disclose Yes. one,

this so point. that And at we disclose don't

with benefit that's the a to another choice direct of identify be in for brokers and of It's them many trying changers, part give the product whether the number that helps. our retained share Principal for used purchasing leaving the partnering on event, benefit that stay and Principal Correct measure measurements is of or the money long we value cases, best event it's really But able industry. through there's participants business me, years money it again, a to that area is our to basis, because in prospects to that's plan, job anyway, but real us onetime ago brought will significant Hopefully, a the our don't and either to that's -- it's for it or, creation mix a there sort that -- plan. the that of how to we hard in know within there's a out retirees.

The next question Autonomous of is from coming Research. Carmichael Wes

for targeting I pipeline moment, sales to with and is the you those what deploy might stick the maybe and one there wanted be just PRT year? to a remained for Can help us pipeline in want but what you RIS out you terms of you you like of size maybe with mentioned strong, called the areas. or capital looks that of

is additional was plan do those momentum them the the Wes, this And and the actually, -- add positive. go One And educated, our the better a IRT congratulations advisory and embracing, institution Chris, Autonomous. are with specifics. call. point team We customers into at our on respond want client on going positive. in on question. providing and seeing ahead really their just to behind I'm be thing being to really West institutional directly other well us the to his we're services was I terms strong We Chris sentiment jumps open sponsors. I and helping you before counsel Chris our Coast with together, you client very just to to joining participants integration quite the and feedback group time. appreciate in of frankly, the

Yes. Sure.

PRT think momentum I mean, and what year in certainly we your had I was was the question for sales saw first and that We the quarter. the to a the PRT start million. momentum, the that first benefit carryover quarter and expect fourth from with to about quarter year? fourth in quarter. we the close carried certainly PRT $XXX saw We good a into strong at

that above returns. our we targeted most and so continue did that we advantage And importantly, to of take

As overall we've between business get the talked tried in and right gross we really about bill, balance growth our returns. past, PRT to and in the net

sales. toward is $XX PRT look balance total the strong year, we As in the at to expecting another the about year billion industry billion $XX of in industry

come for end we the and in they people we the targeting neighborhood are We look and -- benefit billion liabilities the most targeting bit $X at call, to head defined in their as year out said somewhere on of the as to little expect that sales pension close full that in the billion quarter year, first we're and the later $X.X now year of into 'XX. of PRT a

generally of and activity So quarters, fourth PRT a to ramp-up sales sort expect we we third and the seasonality do continue. of that see the in in late

Labor, innings on compliance you know just of increased early with increased associated in what might with And the analyzing you way be I can But sizing bit on a very us of think know terms help And you're expense what of costs. based Department you still Is mentioned today? you that? the any little that a there in big document.

going of way decision as Labor. with on It's digest to is the this My recent most back to the been to the XXXX. Yes. X involved XX that's be months Department all something we sorted out continue next to over I've guess

education the place. on we've of take on disclosure. more to and the compliance these licensing overseeing the will that find this except of all in of matters provides don't of the pieces positive. got that I training and regulation staying transparency and good we the work it on appropriate related working will There's personnel. news part came internal site, out, oversight to and out at that guidance need of reps registered some clarity that advice more just say is which And that One and course, of of require to our But think bit sort very a in

the of next view X you the we've months something we impacting is to Bottom business. it's course keep figure something of that's quantifying yet. to not our So as we'll how on and out cost apprised a line the manageable sort it is over XX put

The next from coming Hurwitz is of question Dowling. Joel

I on fee wanted to rates. start RIS

the it the and the forward? where quarter 'XX. down expectations rate X business rate just you the fee? how fee in the moving around terms compression looked Can ran on saw fee So some of from to provide you basis color in be sort points of also account participant versus based then And the of revenue value has of much that's per off business, in fee

Great up, questions, Chris that and have I'll just pick one Joel.

Yes. Great. question. Thank the for you, Joel,

expectations out, of based. the rate. So you performed think versus non-asset proportion rate fee asset equity based, around X previously one is bps when based markets. The revenue per about our of fee quarter. compression markets of about largely that guided big is member in think or asset-based impact transaction And in expect we and strong or of in factors point fee flat I'd that's normal XX% with that X line the to couple this We've either we revenue revenue neighborhood XX%

So you revenue as significant when than the result, to a denominator as be markets tends more equity performance, can it see the fee numerator. rate impact equity market a sensitive to

rate demand for at steady fees, it basis. fee whether look of long-term at expenses XX-month from fluctuation quarter seasonal as to In the market And fee better it's at rate reminder the to quite a on fee revenue period. other revenue and it's fees trailing strong period year, of through due services. there's about or to last And And seasonality when held in revenue a the bps. that result, revenue because some or the consulting billable collection period, XX was that addition, fourth quarter-to-quarter, from you fluctuates of look

fee that's So I'd on that help Did rev give rate? you the Joel? comment

That helps. then Benefits. gears to switching Specialty And

of sales, given were some terms I terms in that guess, it and drove in disability just sales on in disability. from sort I sequential to what strong disability And So saw provide decline the premiums of was the very group though disability you group color sales? group where anything line QX then of fees? the group strong, top surprised particularly you Could down in it overall, see in was

Principal another we do it's business. in SMB place vibrant of marketplace see focuses where SMB still example think we in growth that I where And a on which strong,

Amy? to So cover go ahead do you that, and want

Yes, sure. question. the Thanks for

So a couple kind sequentially. both of going what's then look comes back on, the actually of to on the and kind of of there, sort answer of those questions And let's at line same embedded questions in to that it product.

So one newer products going we disability, in the medical family disability mind, group when we're short-term of group and that long-term keep disability, line. and on leave have to at paid that in is to going look be that

One of medical family the products. that of is leave things we've paid up markets opening state-by-state kind have been seen happen with and

you of open flowing when coverage. When state-driven a markets products those of mandate time. There's we private state. sales is same in helps So through a one results up in we meet It's marketplace. that at front seeing you're Connecticut, that improved for the in product. that plan and say, come then have product kind and state in, that when the participate participate that Massachusetts, all we Oregon, basically and put carrier you're an of Colorado, things and grouping, you those of the new part They've qualified meeting the

growing moving expect So larger line those those disability, quarter. quarter. look in PFML up a was why opened in year have quarter. you're that we even came are one year bit that first been saw lumpier. for seeing you're the grow. in bit explainer in that to long-term quarter that that I at last up. When what little them on was first Actually, fourth a short-term But little fourth last states in came the quarter disability of then item the And good than that's it's ways and in we a seeing one again What for that

X% that in more of Does seeing growth of some that? to in terms some we're color like to X%, X% So X% products sales. those give help to new that

That Thank helpful. you. very does. It is

Piper is Barnidge The John question from coming Sandler. of next

Can you family quarter. strong stick from maybe pricing there's employee Maybe like strong just seems if outside benefit versus of count? specialty the pretty the paid that expansion. in talk growth could we about growth with It sales leave

talk Yes. Yes. that. I about

the what's seeing. track we're make we things of that But we're line. to at from growth that One XX% is would because benefits look really we the business. what growth. consider coming new net that with premium one And and of versus of of about the that quarter, that pleased wage growth or We across what's we're what's our seeing we want the this getting what's specialty net in then rates consistently divide new again, coming always growth things from up sure employment with coming our keep we we our like we're happened actions. When from growth business rate

in far, biggest that by there the new is net So business. number

So going is of employment growth from on, any business that employment Within good That to the growth. that strongest then lapses and we employment we minus brought XXX rate that has is employment new still growth been be be seeing is seen market action. of smaller happened. well. combination XXX still still the wage -- XX% be to there XXX mid-market, you're growth employment of growth. would going the bigger the Under to -- consider and to under going The as be if a driver have we driver are that's picture, that's from XX% that folks, employer growth happening. that's what an growth

where growth is of that growth in moderating. XXX terms is over Our place block employment the really lives

helps John? Hopefully, that

It's does. question. it helpful. My very follow-up Yes,

capital M&A to in attempt You strategic the have allocation presentation.

laws, noncompete and does the that approach how you With impact in change asset recruitment management? maybe how

employment allows we've don't asset talent Yes. us that agreements paying like here think Within management, the use retain culture Principal. Great question. competitive we we're built frankly, And and of organization. to the I'd attract for to lot a at fees.

of we've lot a have a We turnover. frankly had flexibility, lot of not and

So in alter of the retain ability don't Principal's anticipate grand really I that's or scheme that, going things, to attract talent. to

strong clients, opportunity, health plans, to from go relates specialty terms the benefits. it of out retirement there, the employee we that know matter, studies As care, our in benefits

want of So strength employment to the think making and sure environment of part be plays that with we that. healthy actually it is people the

player proper and in Having big anything those anything a one as and locking plan which all areas deferred of where designing we're the Kamal the is relates see ways management. know, well talent about compensation nonqualified very you that, within you employers space, with as We of thing, of in think having a is other another retain asset it talent. if lot to do to said designs. has work I'll The

well. John, No. very add Dan it just covered on, to

around top-down is the don't a view obviously really We have and culture an tier best their view. which a can top do that remember structure division. culture for. investment investors I it. for of big the encourages have And we best growth, independent year-over-year reasons independent the the what always are legal thinking get those work in Asset being or you'll investment And you work in talent can create without Investment our And the looks environment management. to to those continues that X reward for is reasons Management we one the firms that created our one of that money Management places think are is having of where

And additional so point. that point data the as would I just to

Burdis coming question of Wilma Raymond from The next James. is

Benefits ratio. the the about Just it Could should talk bit despite XXXX? some throughout appeared to expect we It the and repricing little loss Specialty to of a continue talking you about impact. seasonal favorable be

Amy?

Yes.

So long-term range. -- What lower say to it that, have range is continue would end reiterate the is we that favorable. that we're probably towards we looking is be going of I that to

bit What repricing. say one is, well in would have do We direction. market though, the our of seen not definitely as little I that's been portfolio as a consistent

we've had the pricing rate little bit a we increase some some of action, of do were has things seeing that disability did dental we've of in to in we realign down. meant are means with things of seeing that taken the our experience that to we emerging some the our So block

to in sit that what that mean we're towards think So we're taking, the to rate is environment, going see is environment lower going of that we're range. end we the rate competitive we sum still the total, actions that the seeing

about PRT PRT those about Okay. small talk some you a the small talk And as of end Can talk at the well, you the the talk -- a okay. market? sourcing just the just please? then could deals And little can little of you about competitors -- of

Chris?

Yes. Thanks for question. Yes. the

years, new couple seen of last of the have over market. So we lot certainly, PRT the a into entrants

good us we think well. as that to they the know them secure extremely liability, defined solution that and allows able what to a advantage competitive on and outcome is a a to result, services We've we distinguishes for it. defease fact us in benefit that them gives the when our them. it. And consulting we're customers us know look We that for solutions involved I business provide to been talk provide

overall business Principal. we existing from the customers, think we existing about and get we the quarter, in about about our XX% XX% business get, of of customers if came business the first type So of

in a part And of market. different so the play just we

that pipeline favorable as of close we very about quarter, because onboarding others. have strong the thing is capabilities also, fourth of talked little a in PRT times be lets pipeline bit the tends when the take onboarding to market advantage can very the We us for that

space. different So to we're the risk of competitive from lots PRT of existing diversity believe lot then of also in a doing us to the and gives able really a again, which, advantage of contracts, used which Principal, source gives them us customers a

is The next Thanks. of Evercore Gallagher Tom ISI. question from coming

seeing that aggressive were another life pricing which bit I widest, they've they're lost some On think a extreme, business. then they mentioned competition, seen earnings -- that they they suggesting and the but call, and it, group ever price is sounded

you you are your it? you're share so, results how know seeing group what from curious if underwriting pretty specifically were -- good in would perspective. you this Just that And view? quarter I life. responding an to Are there

hear Good to you, Tom. from Amy?

Yes.

on perspective is you to give in marketplace. in that small Keep squarely mind our mid-sized I'll be to my that portfolio that. going So

do work we on when of employers, want So in with they we the terms smaller populations, a of or terms as coverage typically is to of in, standards will what put and maximums underwritten their types the what a some sort to things maybe that we do stay box. smaller midsized the have fundamental of types closer the in we of of executive group. We to tend

that for to look standard, to are coverages either more -- many those any that do we things a tend are we kind getting as and bit the amounts of more populations. some at executive-type standard, have as So don't coverage there we out of have

guarantees. say the compete Principal, so X-year to that. We sometimes but is, underwriting We don't don't in And offer I and I and have to maximum, parameters guarantees. to what have yes, tend to understand would of have in beyond small consistently. X- sole single, to and to the some X- rate midsize We nearly don't don't X-year have to offer marketplace, on the tend the rate of on compete comment competitiveness, we in terms focus we our extend

really marketplace feel we're So I good the in. about

We group rarely life life alone. full with are in needs the for rational competition the employer. seeing we're write write We group marketplace meeting We of tend bundle, the a it in. to

rational that we based have into pretty that space. product. get small to in on market So don't a bundle, the we're it's just in single competition It's and a

great color. that's Yes,

small then in Is really like down So of the not larger it mid. the it's filtering to fair? to that that's market, sounds end

Correct. filter I down. seen have it not

guess, And on question XX%. Chris, I for Joel And my Great. think the you a asked proportion just, was I right. follow-up, then, Dan, fee earlier non-asset-based. said that's it All

the pool by participant or growing Just Is shrinking this per actually that how curious what business, growth much? and rate for that's price has been? fee a

in between call say has would anywhere that relatively I XX% Tom, to it, Yes. stable that, stayed XX%.

state a increase years not block, we're that which we're bit tended to we're when the IRT beyond big steady we be seeing a The little that acquisition. integrated a more big larger customer. X happened now increase. So But

staying I So relatively would say it's constant.

that different similar Like a shrinkage net but that from blocks overall -- growing? growth very does is or it that actually constant, or the organically? look relatively to is And is perspective having --

It looks the to similar pretty block. overall

question The JPMorgan. Jimmy from of is coming Bhullar next

life, So my the aberration of most answered, driven questions individual maybe extent of of were earnings the margins that or but on indicative an seasonality business? versus weak power were this to what quarter

Amy?

it than one-off, that. happy Yes, as you're a as see aberration to indicative. more an answer saying, more as I

of XXXX do We expect for guidance see bit to some earnings higher we communicated range. quarter kind claims. below seasonality of end think be continue going with in expectations would And I long-term we to XXXX. build in, business. especially is of We that margin first the expectation seasonality be that that What we to results, lower that than outlook are a just the say as

the in to to XX% of range expectation So we're seeing the year Life. be more of that XX% for for an bulk adjusted margin

the that Okay. like negative it but DOL And I the do seems initial fiduciaries principal agree know like that been carve-out a was are of guys, it somewhat for possibility don't have potentially you employers not, seems but considered that positive your any if then on or for a things there positive. there rule, or you could for Dan, -- based assessment? with other it on the within then being rule negative not

appreciate I Jimmy, the Yes, question.

right. exactly you're So

help participants, providing you account particular, financial rule. Because definition was can the many the One from were plan lower to adviser. the them our the concerns and wouldn't fall chosen of course help so if the the option smaller of employer underneath to, participants, us They them about have don't lot And right our of with for of ability fiduciary a looking a it, guidance a date they think then in are available plan deal. products of working those in effectively guide to out great with so direction. it normal these income, that the -- and in defaulting primary target education balances, really them and and are

providing not on some able insights hardship having take being withdrawal. out provide to to and whether on even or limitations or guidance were loans on we Before

who Principal Likewise, have without initial seems a read advice, the individuals Principal So the to now advice of course reg. in to affirmed it participant capability us inside the continue the necessary from business having for provide providing question, the has of guidance ability normal insights right is XX-year on asking are that to those the had for for the and of help the history place, the plan adviser instances off necessary back to the of have course, and we're so. And -- of is compliance. this proper were to do be all going day, then, sure the sold call that in all making call, End the plan around to as there scripts the maintaining where we products rules of original handing that are who earlier that originally. I said that on

through we'll think the we we've these manage I sort our Hopefully, had that it and have times line other way as the manage accordingly. this bottom is that regulatory opportunities So all helps. of

Citi. Ward The of next coming question Michael from is

a Maybe pretty I'm seems private little a area growth about Kamal, solid for and credit. like It has just industry curious bit the been. across

could you like in term? over near that the remind that could if us participating flows how Just bolster you're if maybe and wondering

Mike, Thank great for you asking. question.

business we Principal. started private inside think organically credit a I

of We we couple proud have of today. with high-growth the management. I'll generated highlighted, the give you are And on past over results the it's investment years. a in one quite that the of business areas marketplace as X observations you asset

both gives end One edge, to terms of covered of direct us private the players. space. of performance, the be credit larger the designed smaller expertise around things was by we also personally our which less it middle generating the and to but in an was lending long-term

terms grown of has has in some many of less also credit of large only bigger large quality but become at operating where I the bigger and the end and private the underwriting pricing has are would the there of reduction you've operations As observe management marketplace, observed, industry stringent. in the slightly fees, been

but end remain in we And we our alpha, have also we from find that become also smaller on space. focused more risk where the I'll so more observe aware that seat,

through little to make has we management Mike? as question, high-yield our that's that risk IRRs legacy a about culture answers credit smarter sure been credit. the the into passing I from because much we this than generate market our around be deals a And we approach more we bit our We and private to get have full Principal, comes will cycle, to deals more hope want are on the expect. historically

that's Deanna, the freed No, or for Maybe the fourth Bermuda on Yes. I like in $XXX quarter. last that helpful. up think was just entity, million wondering quarter I

in XQ. PRT you some used of maybe Assuming for that life a kind bit, little

cash profile supporting there's it as maybe any just Just free curious that kind of of change. the if Should we is generation? as Or it bolstering stands? think

question the on asked record because having for CFO. the of you glad of a question you're never breaking verge the a I'm

response. So enthusiastic I think this Deanna is about very

up, the for woke Yes. I Mike, so now Thanks I actually question. just the can question. lot, answer and a

So there. a of things couple

look business, remember going you call, usage. at our is support to both really to of As really we the more as from side really allow term to life capital same new the on us last started It entity growth well that PRT. opportunities amount as for

about you Bermuda be whether to of actually that advantageous, it so we Bermuda to actually continue bit still utilized our little And sales term optimistic quarter, our doing was the understand to all as to basis grow those continue evaluate a think is for and we move that businesses seeded that But we'll there by in over just first for capital-efficient good that PRT the if of any entity new entity. is we're that a way. in different a more business on Bermuda. first us a quarter wasn't case-by-case

Mike? Does help, that

Yes. That's great.

Research. is The next Autonomous coming question of Wes Carmichael from

up. investment not transactions, in it maybe be it the variable quarter, woken the But which quite is that to Deanna keep think lower was income, let's to Maybe but was. on softer with estate real I expected probably magnitude

of in perspective your So quarters what just the hoping you could are share and there? expectations couple your maybe next

back coming Wes, Thanks, Yes. in. for

in quarter. different You're than income Actually, have variable what seen. a have the pressured investment drivers correct. did the some little we were We bit

in lower in half would similar have to more total, different. bit we continue drivers what of seen but some a to of of the than it prepays see second a bit the at 'XX year, half were the little it look first we Again, you quarter. little in was If the minimal the

would a in private we X the lower-than-expected activity also actually accounts, and equity where the within the that drivers real And of have the of in returns general million actually, which current see $XX estate mark-to-market that that alts particular, lower anticipate we rest some of the Where for quarter something do the caused We came within the which they the quarter. But underperformance repeating wouldn't expected in investment than International, -- on of other be the saw in and majority our in Principal bigger real the took we portfolio real place our lower holdings. positive did income variable their quarter. funds, then estate that, but year.

that. IP as actual normalize for I should continue expectations just year, our did more interest see expect our just mentioned, well as and alts portfolio. But rate I to quarterly as will environment as we think rest XXXX, look volatility some But predict, to again, that run the bond specifics as into we'll the so pressured prepays the lower it's And more understanding we came we I one of is the for rate prepays. of to harder likely relative that the

that size about is Just it even on saw in a little to and a X%. positive to run than return alts. PE quarter, bit more X% but to still X% helps. that X% was we In to lower our Hope X% the annualized and rate that return again, X%

especially did transaction. now now, growth with more Yes. market if a insurance area ] has And has one the seen higher the Thanks entity. business of consideration been maybe Bermuda guys industry I or curious I But But guess rates in so there's annuity your reentering know with any And question. that [ you you exited retail when higher-level retirement maybe where just fixed annuities. industry the LSG the much.

Chris?

Wes, that. for Yes. thanks

a nice that We other shows I'd spread launch, annuity and is based. continue index-linked seen as we midyear last a only we've is a annuity momentum year, did that variable business product That RILA out is in which its And to more point since our market. registered business. little in thing in bit nicely in participate the the launch up

you've annuity of the space growing following you RILA is largest the RILA If market. trends, the been the that portion know

a a do So provides like the that that's probably product. product, nice we We of nice risk but it's think it. profile extent

variable We at point. annuities. offerings the RILA fixed and new the are annuity this We're retail not focused launch looking to on

you. Thank

Q&A. comments, closing your please. Houston, our of end the reached have We Mr.

our the And I to course, we remain on sure which Well, want approach revenues. earlier. we year, like are good we of to our maintaining focus deployment, we make our laser delivering products. discussed including feel growth, start of and with the mindful to disciplined innovating XXXX that leveraging aligning profitable technology expenses always be want about outlook, capital of and We

look I company. And support to any day. of the so good a appreciate follow-up, I forward with and the that, visiting Have

call. concludes This conference today's you. Thank

may this your time, You at and you lines for disconnect we thank your participation.