Principal Financial CEO Lifts ROE Target, Highlights SMB Growth and AI Push

Deanna Strable reinforces strong 2025 performance and outlines strategic priorities for 2026

Published on Feb. 15, 2026

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Principal Financial Group NASDAQ: PFG President and CEO Deanna Strable used an appearance at Bank of America's U.S. Financial Services Conference to highlight the company's strong momentum, with 12% adjusted EPS growth in 2025 and a raised ROE target of 15-17%. Strable emphasized Principal's focus on small and midsize business (SMB) retirement and benefits, global asset management, and technology investments in artificial intelligence.

Why it matters

Principal Financial's performance and strategic priorities provide insights into the broader financial services industry, particularly the resilience of the SMB market and the growing role of AI in driving operational efficiencies and competitiveness.

The details

Strable said Principal's 2025 results were at the top end of the company's targeted range, with nearly 20% reported EPS growth and free cash flow at the high end. Looking ahead, the 2026 outlook is consistent, with 9-12% EPS growth and a raised ROE target of 15-17%. On SMB, Strable emphasized this as a core focus, with the retirement business skewing toward the 'M' side and the benefits business concentrated in smaller employers. She cited data showing SMB customers have been in business for 30 years on average and have been resilient through economic cycles. In global asset management, Strable described an international strategy focused on exporting U.S. strengths, with $3.5-$4 billion in positive flows in 2025 from real estate and other private markets. On AI, she said Principal has invested in proprietary and third-party tools, expanding access from 1,000 to 17,000 employees by the end of 2025, with use cases spanning meeting prep, code development, claims, and distribution targeting.

  • Principal Financial reported 12% adjusted EPS growth in 2025.
  • Principal raised its ROE target to 15-17% from 14-16% for 2026.

The players

Deanna Strable

President and CEO of Principal Financial Group.

Principal Financial Group

A global financial services company headquartered in Des Moines, Iowa, that provides a range of retirement, investment and insurance solutions.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

The takeaway

Principal Financial's strong performance, strategic focus on SMB and technology, and raised profitability targets suggest the company is well-positioned to navigate the evolving financial services landscape and capitalize on emerging trends like the growing role of AI.