The Principal Financial Well-Being Index^sm Executive Summary - Fourth Quarter 2004

Summary of Survey Findings

Value Found in Wellness Benefits:

• The majority of employees (57%) feel wellness benefits are successful in reducing healthcare costs. Employees feel their families benefit most financially from reduced healthcare costs from wellness benefits (48%), followed by employers (19%) and insurance providers (18%).
• Better overall physical health (57%), lower personal healthcare costs (46%), and a greater chance of living a longer, healthier life (40%) are benefits that would encourage employees to participate in wellness programs.
• Roughly half of employees surveyed said wellness programs would both encourage them to work harder / perform better (50%) and to stay with their current employer situation (54%).

Benefits of Health Screenings:

Health screenings are still widely unavailable to employees at growing companies, although participation is high among those with access. The health screenings bring about changes in activities or lifestyles in 75% of employees. Three in four employees that have not been offered a health screening said they would be likely to participate in the future if the health screenings were available to them.

• One in four employees (24%) have health screenings available to them - the majority of those who have them available are participating (84%). Employers (35%) and hospitals/clinics (25%) are the most frequently mentioned sponsors of these health screenings, but a quarter (24%) of employees said they paid for the health screening themselves.
• Eating healthier (47%), exercising more (45%), and thinking about healthier options (42%) are the most frequently mentioned lifestyle changes due to health screenings. One in four employees (25%) said their lifestyles did not change because of the screening.
• Seventy-eight percent of employees that have not been offered a health screening said if offered, they would be very/somewhat likely to participate.

Getting Healthy at the Workplace:

Growing businesses have started offering wellness benefits to employees, although the incidence is still relatively low. From a list of 18 possible wellness benefits, the one with the highest incidence overall was "educational tools and resources," at 19%. Fitness was definitely at the top of benefits that employees would like their employers to add to the mix (31%).

• Educational tools (19%), educational seminars (14%), and fitness center discounts (14%) are the top wellness benefits offered to employees.
• Educational tools (84%), onsite health screenings (79%), blood pressure checks (71%), cholesterol screening (70%), and consultations on health screenings (70%) were the wellness benefits with the highest usage.
• The top three wellness benefits desired by employees are fitness facilities (31%), fitness center discounts (30%), and weight management programs (19%).

Wellness Program Success
"How successful do you believe wellness benefits offered by your employer can be in reducing healthcare costs?"

Very Successful	Somewhat Successful	Neither	Somewhat Unsuccessful	Very Unsuccessful
14%	43%	24%	9%	11%

Benefits From Wellness Benefits
"In your opinion, who benefits most financially from the reduced healthcare costs associated with wellness benefit programs? Please rank list in order with "1" receiving the highest financial benefit and "6" receiving the lowest financial benefit."

	% Ranked #1	Average Ranking
My Family and Me	48%	2.4
My Employer	19%	2.6
My Insurance Provider	18%	3.0
Society	9%	4.0
Health Care Providers	3%	4.2
Government	3%	4.8

Employee Motivation
"Please tell us how much you agree or disagree with the following statement. Having a wellness program offered by my employer would / does encourage me to work harder and perform better."
N=1736

Strongly Agree	Somewhat Agree	Neither	Somewhat Disagree	Strongly Disagree
13%	37%	35%	8%	6%

Employee Retention
"Please tell us how much you agree or disagree with the following statement. Having a wellness program offered by my employer would/does encourage me to stay in my current employment situation."
N=1736

Strongly Agree	Somewhat Agree	Neither	Somewhat Disagree	Strongly Disagree
15%	39%	33%	7%	6%

Wellness Benefits
"Which of the following wellness benefits does your employer currently offer?"

Wellness Benefits	Overall	Employer Firm Size
		10 to 500 Employees	501 to 1,000 Employees
Educational Tools or Resources	19%	18%	25%
Educational Wellness Seminars	14%	11%	28%*
Fitness Center Discounts	14%	12%	22%*
Blood Pressure Checks	12%	10%	23%*
Fitness Facilities	11%	10%	18%*
On-Site Health Screenings	9%	7%	19% *
Cholesterol Screening	8%	7%	15% *
Access to Experts (Nutritionists, etc)	8%	7%	10%
Intervention Programs	7%	6%	12%*
Smoking Cessation Programs	6%	5%	12% *
Blood Sugar Screening	6%	5%	11%*
Maternity Management	6%	5%	8%
Weight Management Programs	5%	4%	9%*
Consultant Review of Health Screen	4%	3%	9% *
Weight Mgmt Program Discounts	4%	3%	8%*
Personalized Action Plan for High Risk Conditions	4%	3%	6%
Online Health Screenings	2%	2%	3%
Fitness Equipment Discounts	2%	1%	4%*
Other	3%	3%	3%
	N=1736	N=1454	N=282

* Significant at the 95% confidence level

Usage of Wellness Benefits
"How often do you use each of the following wellness benefits offered by your employer?"

Wellness Benefits	Have Used	Use Frequency			Have Used	Have Used
		Weekly	Monthly	Yearly
Educational Tools or Resources	84%	12%	57%	16%	16%	380
On-Site Health Screenings	79%	-	3%	76%	21%	162
Blood Pressure Checks	71%	7%	19%	45%	29%	210
Cholesterol Screening	70%	-	-	70%	30%	163
Consultant Review of Health Screen	70%	1%	5%	64%	30%	73
Education Wellness Seminars	69%	-	18%	50%	31%	244
Online Health Screenings	66%	1%	16%	19%	34%	35
Blood Sugar Screening	65%	2%	3%	61%	35%	109
Fitness Equipment Discounts	64%	3%	14%	47%	36%	35
Access to Experts	60%	9%	17%	35%	40%	140
Fitness Facilities	54%	35%	14%	6%	46%	213
Personalized Action Plan for High Risk Conditions	49%	1%	12%	35%	51%	70
Intervention Programs	40%	3%	12%	26%	60%	130
Fitness Center Discounts	38%	16%	14%	8%	62%	237
Weight Mgmt Programs	35%	8%	11%	14%	65%	84
Weight Mgmt Program Discounts	17%	2%	5%	10%	83%	76
Maternity Management	12%	-	7%	5%	88%	81
Smoking Cessation Programs	10%	-	3%	6%	90%	150

Wellness Benefits Desired
"Below are the wellness benefits you indicated your employer does not offer. Which of the following are the top three benefits that you would like to see your employer offer?"

Wellness Benefits	Top Wellness Benefits Desired
Fitness Facilities	31%
Fitness Center Discounts	30%
Weight Management Programs	19%
Access to Experts (Nutritionists, etc)	19%
>On-Site Health Screenings	16%
Fitness Equipment Discounts	15%
Weight Management Program Discounts	13%
Cholesterol Screening	11%
Educational Wellness Seminars	9%
Smoking Cessation Programs	9%
Educational Tools or Resources	8%
Blood Pressure Checks	7%
Consultant Review of Health Screening	7%
Personalized Action Plan for High Risk Conditions	7%
Intervention Programs	6%
Blood Sugar Screening	5%
Maternity Management	5%
Online Health Screenings	2%
None of these	19%
	N=1736

Encourage to Participate
"Of the items listed below, which 3 would encourage you to participate in a wellness benefit program?"

	4 Q 2004
Better overall physical health	57%
Reduced personal health care costs	46%
Greater chance of living a longer, healthier life	40%
Greater chance of living a longer, healthier life	31%
Employer provides opportunity to participate	30%
Recommendation by doctor or health care provider	20%
More positive mental outlook	18%
Reduce impact of current condition or illness	18%
Encouragement from friends or family	9%
Encouragement from employer	6%

Sponsor of Health Screening
"Who sponsored this screening opportunity?"

	4 Q 2004
Employer	35%
Clinic or Hospital	25%
Sponsored it myself	24%
Local Organization (church, community center)	11%
Association (AARP, trade association)	4%
Insurance Company	2%
Local Pharmacy	1%
Other	5%
Not Sure	5%
	N=442

Encourage to Participate by Age Group
"Of the items listed below, which three would encourage you to participate in a wellness benefit program?"

	Age Groups
	18-34	35-44	45-54	55+
Better overall physical health	53%	62%	60%	54%
Reduced personal health care costs	48%	42%	44%	49%
Greater chance of living a longer, healthier life	33%	34%	48%	52%*
Receive an incentive or reward to participate	37%	32%	>28%	18%
Employer provides opportunity to participate	30%	31%	33%	21%
Recommendation by doctor or health care provider	18%	22%	19%	25%
More positive mental outlook	19%	18%	18%	15%
Reduce impact of current condition or illness	16%	15%	16%	27%*
Encouragement from friends or family	11%	9%	8%	7%
Encouragement from employer	5%	9%	8%	3%
Advertisements	-	2%	-	-
None of these	5%	4%	2%	5%
	N=388	N=399	N=538	N=411

Offered Health Screening
"Have you ever been offered the opportunity to participate in a health screening that included a lifestyle questionnaire, blood tests and physical measurements to assess your state of health?"

A

		Age Group				Employer Size
	4 Qtr 2004	18-34	35-44	45-54	55+	10-500	501-1000
Yes	24%	18%	21%	29%	34%	23%	33%*
No	76%	82%	79%	71%	66%	77%*	67%
	N=1736	N=388	N=399	N=538	N=411	N=1452	N=284

Participated in Health Screening
"Did you participate in the health screening?"

		Age Group
	4 Qtr 2004	18-34	35-44	45-54	55+
Yes	84%	85%	86%	81%	87%
No	16%	15%	14%	19%	13%
	N=442	N=74	N=88	N=143	N=137

Sponsor of Health Screening
"Who sponsored this screening opportunity?"

	4 Q 2004
Employer	35%
Clinic or Hospital	25%
Sponsored it myself	24%
Local Organization (church, community center)	11%
Association (AARP, trade association)	4%
Insurance Company	2%
Local Pharmacy	1%
Other	5%
Not Sure	5%
	N=442

Resulting Lifestyle Changes
"Which of the following activities or change in your lifestyle did you do as a result of the health screening in which you participated?"

	4 Q 2004
Eat healthier	47%
Exercise more	45%
Think about healthier options more often	42%
Visited my personal physician	19%
Additional medical testing	15%
Additional medical treatment	12%
Selected a personal physician	5%
Something else	1%
No Changes to Lifestyle	25%
	N=369

Likelihood to Participate if Given Opportunity
"If given the opportunity, how likely would you be to participate in a health screening that included a lifestyle questionnaire, blood tests and physical measurements to assess your state of health?" N=1294

Very Likely	Somewhat Likely	Neither	Somewhat Unlikely	Very Unlikely
35%	43%	11%	6%	5%

Methodology - The Principal Financial Well-Being Index

Background - The Principal Financial Well-Being Index survey was conducted online by Harris Interactive^® between December 1-9, 2004 among 1,736 adult employees (aged 18+) of small and mid-sized U.S. businesses (firm size 10 - 1,000 employees). Data were weighted to be representative of the entire population of adult employees working for small to mid-sized U.S. businesses. Propensity score weighting was used to adjust for respondents' propensity to be online.

In theory, with a probability sample of this size, one can say with 95% certainty that the results for the overall sample have a sampling error of plus or minus 3 percentage points. This online sample was not a probability sample.

About the Principal Financial Group
The Principal Financial Group^® (The Principal^®)¹ is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $156.0 billion in assets under management² and serves some 14.7 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

About Harris Interactive^®
Harris Interactive Inc. (www.harrisinteractive.com), the 15th largest and fastest-growing market research firm in the world, is a Rochester, N.Y.-based global research company that blends premier strategic consulting with innovative and efficient methods of investigation, analysis and application. Known for The Harris Poll^® and for pioneering Internet-based research methods, Harris Interactive conducts proprietary and public research to help its clients achieve clear, material and enduring results.

Harris Interactive combines its intellectual capital, databases and technology to advance market leadership through U.S. offices and wholly owned subsidiaries: London-based HI Europe (www.hieurope.com), Paris-based Novatris (www.novatris.com), Tokyo-based Harris Interactive Japan, through newly acquired WirthlinWorldwide (www.wirthlinworldwide.com), a Reston, Virginia-based research and consultancy firm ranked 25th largest in the world, and through an independent global network of affiliate market research companies. EOE M/F/D/V

¹ "The Principal Financial Group^®" and "The Principal^®" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
² As of September 30, 2004.