NU Online News Service, Nov. 2, 2004, 4:34 p.m. EST

Strong employee retirement plan contributions helped pump up third-quarter profits at a large Midwestern insurer.[@@]

Principal Financial Group Inc., Des Moines, Iowa, is reporting $299 million in net income for the latest quarter on $2.1 billion in revenue, up from $184 million in net income on $2 billion in revenue for the third quarter of 2003.

Principal drew about $85 million of the increase in profits from a mortgage banking unit it sold to Citigroup Inc., New York. Net income at the operations Principal still owns rose to $195 million, from $169 million.

Operating earnings rose to $72 million, from $53 million, at the life and health insurance unit and to $123 million, from $108 million, at the U.S. asset management unit.

The strength of U.S. asset management results was due partly to a 24% increase in retirement plan deposits, according to Principal Chairman J. Barry Griswell. Total U.S. retirement plan deposits should total about $8 billion this year.

“Continued strong growth reflects the power of payroll deduction,” Griswell says in a statement about Principal’s third-quarter earnings.

The growth also reflects Principal’s efforts to encourage employees to participate in retirement plans and increase deferral levels, Griswell says.

In other earnings news:

- Protective Life Corp., Birmingham, Ala., is reporting $66 million in net income for the third quarter on $519 million in revenue, up from $52 million in net income on $480 million in revenue for the third quarter of 2003. Thanks to an increase in interest rates on fixed annuities, an increase in annuity sales offset a drop in life insurance sales. The launch of an inflation-adjusted note program helped increase stable-value product sales to $776 million, from $124 million.

- FBL Financial Group Inc., West Des Moines, Iowa, is reporting $14 million in net income for the third quarter on $158 million in revenue, compared with $15 million in net income on $157 million in revenue for the third quarter of 2004.