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Meeting the moment

Transforming for customers

We strive to put the customer at the center of everything we do. In 2021, we found new ways to enrich these relationships, through innovations to help meet emerging needs, enhanced customer experiences, and access to financial resources. We’re proud of our continued commitment to those who have put their trust in us. It's a privilege to help them enjoy the freedom that comes with feeling financially secure.

Innovations and new offerings

Making it easier for small employers to offer retirement benefits

Only 55% of workers employed by small businesses (1–99 workers) have access to retirement benefits.1 The Setting Every Community Up for Retirement Enhancement (SECURE) Act has helped pave the way for unrelated United States employers to participate in a single, pooled employer plan (PEP).

In support of this legislation, Principal® teamed up with other key service leaders to launch Principal® EASE, a uniquely designed PEP that combines integrated retirement plan administration, customer service, and investment fiduciary services capabilities. Principal has taken responsibility as the Pooled Plan Provider (PPP), overseeing the operation of the plan, helping to ensure it meets ERISA regulatory requirements and helps reduce administrative work and fiduciary risk for employers. This move enables us to remain focused on increasing access to retirement plans for all American workers.

We have seen strong interest in Principal® EASE, signing on over 150 businesses into the solution, with more in the pipeline. We continue to see PEPs as a key business area in 2022 as more financial professionals become familiar with this new option and their employer clients seek ways to retain and hire employees in tight labor markets.

Providing new model portfolios

As the asset management industry evolves and client needs change, we've responded. In June, we launched a new model portfolio offering, Principal Wilshire Diversified Portfolios, in partnership with Wilshire, a leading global financial services firm, and BlackRock, a leader in passive investment strategies. These model portfolios combine active assets from Principal with passive assets from BlackRock, offering a “hybrid” model portfolio that seeks risk-adjusted returns at an attractive price.

The new offering provides advisors access to multi-managed portfolios that have greater diversification and relative resilience across market cycles, using complementary strategies to maximize returns at varying levels of risk. This frees up time for advisors to spend with their clients. At year-end 2021, customers had invested more than $67 million through the Principal Wilshire model portfolios.

Adding digital platforms

Digital platforms help us meet new and existing customers where they are, on their terms. In Malaysia, we launched our Principal e-Cash Fund, which is available on Touch ‘n Go’s eWallet. This first-in-the-market eWallet solution helps customers grow their eWallet cash balances—providing them with liquidity and income they can use toward everyday purchases. It's currently helping 2 million individuals reach their financial goals.

Expanding mental health resources

What employees are looking for in a benefits offering is shifting. Our 2021 research found that nearly half (47%) of business owners have seen an increase in questions about mental health and well-being resources available to employees, with another 45% seeing an increase in the use of these offerings. To support this growing need, beginning in July we made an emotional health support line available to all group benefit clients at no additional charge. Employees covered by any of our group benefits now have access to a toll-free, confidential support line 24 hours a day, seven days a week to reach licensed behavioral health clinicians who provide emotional support, tips for healthy coping, and referrals to local resources.

Innovation targeting new saving solutions

We are constantly searching for new and better solutions to make financial security accessible to more people. In Mexico and Chile we’ve launched xPlora, an internal and open innovation program to help us continue transforming our culture and better connect with the startup ecosystem in the region. We’re hosting innovation challenges focused on generating ideas and solutions that solve specific customer pain points or business problems. Our goal is to link the knowledge and experience of Principal employees with external teams from the startup ecosystem to deliver innovative and valuable solutions for clients.

In 2021 we received nearly 600 ideas for our internal challenges, incubated 15 of them, and chose five to implement in 2022. This program has positioned our companies in Mexico and Chile to innovate, which is reflected in several innovation recognitions including Most Innovative Companies in Chile in 2021.

Enhanced experience

Delivering improved outcomes in emerging markets

After nearly two years of planning and collaboration, we revamped the Global Emerging Markets Fund (PIEIX) to directly include research insights from our asset management team members on the ground around the world. This revised structure deepens our research and aligns local country/regional expertise with global sector perspectives, to harness our very best stock selection ideas and risk management insights in the portfolio. Early results have been encouraging, with the Fund outperforming its benchmark for 2021.

Simplifying enrollment

We continue to make it easier for new clients to initiate benefits with us. Two examples of note:

We simplified the application experience for our individual disability income employee customers. The system combines an employee's responses to simple, intuitive questions with data provided by the employer to prefill digital disability insurance applications, complete with electronic signature. This change enables us to issue policies much faster, sometimes within 48 hours, compared to the traditional week-long paper process. Through end of the year 2021, we received 1,128 submitted applications.

We debuted an online benefit enrollment experience in June for employers to use with new hires or newly eligible employees. It transforms a manual, paper-based process into an electronic experience, ensuring greater accuracy and ease for the customer. We rolled this solution out to all group benefits products in October. In 2021 (with the broad range of products not being available until third quarter), we saw a total of 7,520 employer/advisor initiations and 1,653 employee enrollment completions using the online enrollment experience.

Improving our “best new app” in Chile

Our AFP Cuprum app earned best new app accolades when it launched, and in 2021 we continued to improve our mobile experience. We added new functionalities, prioritizing transparency with investment returns on voluntary pension accounts and ease of accessing information via a new notification center. Our 97,000 unique app users average seven visits per month per user—making it the channel our customers use most frequently. Relatedly, across our digital offerings (web, app, chatbot), we improved self-service experiences and saw their use grow by 5 percentage points, from a strong 79 percent of total customer interactions to an impressive 84 percent.

Principal® Hola Futuro: Completing build-out of our Principal® app in Spanish

Over the past several years we've dedicated resources to improving and building upon the numerous Spanish-language resources available to plan participants. In 2021, we completed a phased build-out of our Principal® app in Spanish, providing in-language, on-the-go retirement savings account access. Users can check their balance, make contribution updates, and complete other transactions. We're happy to add this app experience to our overall Principal® Hola Futuro offering.

Self-serve options

We continue to add more self-serve functionality on our website. For instance, life insurance customers can now change their beneficiaries online without our assistance—simplifying one of our highest volume customer requests. Since implementing this option in December 2021, it's been used more than 3,500 times, accounting for more than one-third of beneficiary change requests.

Digging deep on customer insights to aid retention

In Mexico we launched a concerted effort to inspire customers to continue investing and show them how we can help. We used ethnographic research and quantitative insights to understand customer needs and preferences. Based on this, we've started a series of activations including testing targeted communications to help people in various stages of their lives and a pilot program that pairs financial advisors with targeted clients. Initial results show email open rates that are 13 percentage points higher than the industry benchmark and a significantly improved net promoter score (which gauges customer loyalty).

Financial education, tools, and resources

Providing unique opportunities to gain insights

In September 2021, we continued our annual asset management client series, hosting the event virtually for the second year. These summits connect our clients and prospects from Asia and Europe with relevant and reputable investment leaders to discuss risk, resilience, and recovery in our global markets. In addition to our own experts, the summits featured several well-known speakers, including Dr. Ben Bernanke (Chair of the U.S. Federal Reserve, 2006-2014), Dr. Condoleezza Rice (U.S. Secretary of State, 2005-2009, and National Security Advisor), Anthony Tan (CEO of Grab), and Tan Sri Abdul Wahid Omar (Chairman of Bursa Malaysia).

Attendees represented more than 30 countries across all our client groups. In total, the sessions had more than 2,000 views—offering expert insights and analysis our customers value.

Offering insights and resources for business owners

We're leveraging our small and midsize business insights to help business owners and employers address topical business challenges. We host podcasts and webinars, send timely insights and resources, and provide a Navigating Business Now webpage to help SMBs navigate their current business needs. The webpage gives them the opportunity to connect with financial professionals, run a Principal® Business Needs Assessment, and compare benefits to companies of similar size within their industry and region. In 2021, this content generated nearly 150,000 engaged sessions on our site—including interactions with videos, articles, resources, and tools.

Exploring new channels for financial education

In Mexico we launched a financial education program on YouTube. Our goal was to share with customers and the general public the importance and benefits of saving money for retirement, as well as some general financial education. The initial program, including 12 segments, provides an overview of financial security basics—everything from “what is an Afore” to information about the stock market and the Mexican financial system. The videos have been viewed more than 36,000 times so far.

A reason to feel secure

Across Principal—including all 18,600 employees around the globe—we're working to deliver on our promise to give customers a reason to feel secure. We do this by meeting their needs, adding value in new and innovative ways, and simplifying experiences. We're proud of the results we delivered in 2021 and are excited to do even more in 2022.