Principal Financial Group reported a record number of life insurance applications in 2020.
The COVID-19 pandemic is motivating large numbers of people to seek life insurance coverage for their families. Faster underwriting and direct-to-consumer channels also helped Principal boost its life insurance count, CEO Dan Houston said during a fourth-quarter earnings call this morning.
The number of digital applications tripled and "nearly all" policies were delivered electronically during 2020, he added. Principal's willingness to act swiftly helped its business units remain nimble and profitable, Houston explained.
For example, the insurer announced Thursday that it is exiting its retail investment retirement business in India. While results had been improving, the scale was not there to deliver long-term value, he said.
"Additionally, in individual life, we recently discontinued new sales of our lifetime guaranteed universal life products, a small portion of our overall block and the most interest rate sensitive," Houston said. "Both these actions are examples of our strategic focus and discipline."
Principal reported fourth-quarter profit of $472.6 million in a surprisingly strong quarter. The Des Moines, Iowa-based company said it had profit of $1.70 per share. Earnings, adjusted for investment gains, were $1.48 per share.
The results beat Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of $1.43 per share.
The financial services company posted revenue of $3.77 billion in the period. Its adjusted revenue was $3.68 billion. For the year, the company reported profit of $1.4 billion, or $5.05 per share. Revenue was reported as $14.58 billion.
Term Life Success
Full-year individual life sales were $219.8 million, with record term sales of nearly $100 million. Amy Friedrich, president, U.S. insurance solutions, credited an "accelerated initial investment" in term life straight-through processing.
"What that enabled us to do with was really keep up with the demand," Friedrich explained. "Some of the things we're doing with that straight-through processing are the things you would would imagine. We're trying to make sure it's really easy, that much of it can be done through some sort of an accelerated or simplified underwriting process, and that you can handle it all digitally."
The straight-through processing capabilities were made available to distributors as well, she added, so they get to take advantage all the way through to the digital e-delivery of policies.
PFG has bounced back strong from the depths of the pandemic. Shares have increased about 21% in six months and are up 6% since the start of the 2021.
“We’re in one of the best financial positions in our company’s history," Houston said. "Our balance sheet and underlying investments are high quality and performed exceptionally well in 2020’s stressed and volatile markets."
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.
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