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Life Health > Health Insurance

Rising Rates Pinch Principal Mortgage Unit

By Staff Writer

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NU Online News Service, Feb. 2, 2004, 8:50 p.m. EST – The stock market rebound helped offset the effects of rising interest rates at Principal Financial Group Inc. in the fourth quarter of 2003.[@@]

The Des Moines, Iowa, insurer is reporting $203.9 million in net income for the latest quarter on $2.5 billion in revenue, compared with $215.4 million in net income on $2.3 billion in revenue for the fourth quarter of 2002.

Higher disability insurance sales led to modest growth in life and health insurance revenue and helped increase insurance operating profits to $66.4 million, from $61.4 million.

U.S. asset management operating profits increased to $117.6 million, from $83.7 million, thanks, in part, to a 25% jump in pension profits.

But rising interest rates caused Principal’s large mortgage banking unit to post a $42.8 million loss. The unit generated $29.1 million in profits in the comparable quarter in 2002.

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