Principal Cuts Staff for Fifth Year as CEO Exits Health Business

Feb. 13 (Bloomberg) -- Principal Financial Group Inc., the insurer that expanded in Chile this month, said it cut 154 employees in 2012 as it scaled back from health coverage, marking the fifth-straight year the workforce contracted.

Principal had 13,373 workers as of Dec. 31, compared with 13,527 a year earlier, according to the insurer’s annual report today. The figure was 16,585 at the end of 2007.

Chief Executive Officer Larry Zimpleman began exiting health insurance in 2010, and job cuts are tied to the wind-down of that unit, said Susan Houser, a company spokeswoman. The Des Moines, Iowa-based insurer is turning to fee revenue from managing assets as low interest rates on bonds pressure profits. Principal acquired Chilean pension manager AFP Cuprum SA this month for about $1.5 billion as it expands in emerging markets.

“We actually had job growth if you factor in the planned three-year exit of our health business,” Houser wrote in an e- mail. “We placed more employees in other businesses than was originally estimated.”

Principal shares gained about 22 percent in the past 12 months including dividends, beating the 20 percent return of the 22-company Standard & Poor’s 500 Insurance Index.

--Editors: Dan Kraut, Steve Dickson