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Applying world leadership to Chile’s savings market

Article - September 7, 2011
With a wealth of experience, the Chilean division of Principal Financial Group has risen to the top of the industry, offering its clients savvy savings instruments and trust
When people think of insurance, they usually think of policies, premiums and savings. Yet there is a lot more to it, and one could even say that insurance companies form an important pillar of a country’s economic growth. These institutions have a great deal of savings accumulated and must invest this somehow – often providing financing alternatives for local businesses.

In Chile, private companies such as Principal Financial Group are, in addition to mandatory social security plans, offering complementary savings tools, which in turn represent more possibilities for greater savings and more comfortable futures for retirees.

“The funds that people are saving allow for a significant development in the market,” explains Pedro Atria Alonso, Principal Chile’s country head. “This generates a chain reaction for all of the economy, from companies that can easily find financing, either through bonds or other financing instruments – which results in the creation of a very large market of institutional investors – all the way to insurance and mutual fund companies.”

He adds, “Chile’s investment rate has risen considerably and with time, this investment improves the unemployment rate, salaries and the country’s development.”
 ‘In Chile, Principal was chosen bes t APV Fund Manager in 2009 and 2010, and best international stocks manager in the 2007-2008 period’

Education has played an important part in this, says Mr. Atria, as saving and investing are not concepts with which many Chileans are familiar. There is still a long way to go, however, as only 8.5% of the working population have opened an APV account (a voluntary retirement savings account with tax benefits).

Principal, the Chilean arm of the U.S.-based global financial services company of the same name, is one of Chile’s leading insurance providers. With more than 130 years of experience, Principal offers its customers in Chile the ultimate investment tools and strategies to ensure return on investment, all under the company’s solid and trusted name. Principal conducts four main business lines: mutual funds, pension plans, payout annuities, and asset management.

The group has racked up a list of awards and recognitions, including being named one of the World’s Most Ethical Companies in four opportunities by Ethisphere magazine, top record keeper in the number of defined contribution plans, profit sharing plans, SEP and SIMPLE plans (PLANSPONSOR magazine’s Recordkeeping Survey, June 2010), and ranked third on Barron’s annual ranking of top mutual fund companies (February 2011).

Present in Chile since 1995, Principal won Best APV Fund Manager in 2009 and 2010 at the Fund Pro Platinum Performance Awards, and was #1 in the risk-adjusted performance awards for mutual funds, not only in number of funds but also in percentage of funds awarded (April 2011).

“In this business, trust is fundamental,” says Mr. Atria, “because we’re asking people to hand over their money. For this reason, we have to be extremely trustworthy and assure our clients that their money is safe.”