|
Principal Financial’s use of AI is deeply embedded into the company’s broader strategy, according to Strable, a company veteran who took over as CEO in January 2025.
The investment management and insurance company is evolving from its business-to-business model to incorporate business-to-consumer efforts as well, according to Strable. “Ultimately, how you interact from a technology perspective is very different. You have to think about 24/7 versus interacting during the day. Personalization becomes much more important. And so one of our big strategic initiatives is continuing to build that piece out,” Strable said. That’s where AI plays a significant role.
AI? What AI? Principal’s AI applications range from predictive machine learning used by asset managers to generative AI tools for administrative relief. For example, Principal developers utilize GitHub Copilot, while the broader workforce relies on tools like Microsoft Copilot and internal platforms. The company uses Moveworks to power an internal AI assistant named Penny, which handles a range of HR and IT questions.
AI has dramatically improved workflows in call centers and benefits departments by instantly summarizing dense policy documents, saving human agents from the need to manually sort through disparate, older systems. The company can build platforms internally on top of Amazon Bedrock, according to Kay. The company tends to be an AWS shop, Kay said.
A self-funding model. Implementing enterprise-wide AI is notoriously expensive, according to Strable, who said she leans heavily on her background as a former CFO to manage those costs effectively. In 2025, the company invested between $20 million and $25 million directly into AI tools, seat licenses, training, and staff expertise, without going to Wall Street to report higher expenses or to lower earnings forecasts, she said.
The company saved and reinvested money by utilizing internal AI rather than hiring external vendors, she said. Some savings fell straight to the bottom line, some were funneled into new business initiatives, and some paid for the $25 million AI expansion, according to Strable.
Today, at least half of Principal’s tech portfolio has an AI component, making AI a part of the standard operational budget, according to Kay.
Use it or lose it. Principal expects employees to use the tools at hand, and it won’t let expensive AI investments go to waste. “If you haven't used a model in 30 days, we'll take the license. You can then easily get it back,” Kay said. “So, there is an expectation that you use the tools that you've been trained with to be more productive.”
The company also tracks who its biggest AI users are, as well as the volume of code written by AI.
“We have some goals that would not be achievable if you're not using AI,” Kay said. In some instances, those who don’t use AI will “definitely stand out as being not as productive as others,” she said.
Strable said her primary goal is to maintain Principal as a growing company. By making the existing workforce massively more productive through AI, Principal can service a growing customer base and increase revenue without needing to expand headcount at the same rate,” she said. While some high-turnover areas like call centers might see "right-sizing" through attrition, the main goal is increasing throughput.
“It’s getting us to think differently about change management, and how you design jobs or put jobs together,” Strable said.
The profile of the ideal job candidate is evolving along with AI, according to Kay. Pure technical prowess is no longer the sole metric for success. The company increasingly hires for creativity and adaptability, candidates who may not be "super engineers" in a traditional sense, but who are highly creative when it comes to leveraging AI tools to write code and solve problems.
|
