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AM Best Comments on Credit Ratings of Principal Financial Group, Inc. and Its Subsidiaries Following Acquisition Announcement

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AM Best has commented that the Credit Ratings (ratings) of
Principal Financial Group, Inc. (NASDAQ:PFG) (headquartered in Des
Moines, IA) and its insurance subsidiaries (Principal) remain unchanged
following the announcement that the company has signed a definitive
agreement to acquire Wells Fargo's Investment Retirement and Trust
business. Under the agreement, the purchase price is $1.2 billion in
cash, with up to an additional $150 million payable in two years based
on revenue retention.

The transaction increases Principal's U.S. retirement business' assets
under administration by approximately $820 billion from almost four
million plan participants across retirement and non-retirement trust and
custody, defined benefit and defined contribution accounts. AM Best
notes that the acquired business will be held outside Principal's
domestic insurance operations upon transaction close with the
expectation that this business will be transitioned through its domestic
insurance entities over time. As a result, the immediate impact on the
ratings of Principal's insurance operations are modest, but support
improving diversification, scale and profitability over the long-term.
The transaction is expected to close in the third quarter of 2019,
pending regulatory approval.

On Feb. 21, 2019, AM Best revised the outlook to positive from stable
for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the
Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term ICR
of "aa-"of Principal Life Insurance Company and Principal National Life
Insurance Company. The outlook of the FSR remains stable. The ratings
reflect Principal's balance sheet strength, which AM Best categorizes as
very strong, as well as its strong operating performance, favorable
business profile and appropriate enterprise risk management (ERM). The
positive outlook reflects the continued strength and evolution of the
organization's ERM capabilities.

This press release relates to Credit Ratings that have been published
on AM Best's website. For all rating information relating to the release
and pertinent disclosures, including details of the office responsible
for issuing each of the individual ratings referenced in this release,
please see AM Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and AM Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and AM Best Rating
Action Press Releases
.

AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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