Car Insurance

Principal Global Investors, LLC, a leading global asset manager and a member of the Principal Financial Group([R]) (NYSE:PFG) today announced a definitive agreement to acquire Morley Financial Services, Inc. (”Morley Financial”), a distinguished stable value asset manager with over $14.0 billion in institutional assets under management, from Columbus, Ohio-based Nationwide Mutual Insurance Company.

“The acquisition of Morley Financial represents a strong strategic fit for Principal Global Investors as we continue to strengthen our portfolio of offerings suitable for retirement investing and other long-term investment strategies,” said Jim McCaughan, CEO of Principal Global Investors. “Stable value, at more than 10 percent of the 401(k) market assets, is an important capability - one we believe baby boomers will increasingly demand as they move toward retirement and seek investment options to preserve their capital and generate income. In addition, this acquisition will enhance our ability to offer outcome-based solutions, such as absolute return strategies, which will help us further penetrate the institutional market.” Outcome-based investing, which focuses on achieving a specific return over a cash rate, has begun to displace traditional benchmark-oriented investing.

Commenting on the successful acquisition history of Principal Global Investors, McCaughan added: “We are pleased with the progress of our multi-boutique approach to managing acquisitions. Since acquiring Spectrum Asset Management in 2001, Post Advisory Group in 2003 and Columbus Circle Investors in 2004, assets under management at these firms collectively have tripled. By allowing our affiliated firms autonomy over their investment processes, while providing the marketing, distribution and technology resources they need to grow, we have formulated an approach that has greatly contributed to 150% growth in assets under management for Principal Global Investors in the last five years.”

Morley Financial will continue to be led by Jill Cuniff, who has been Morley’s Managing Director and Chief Investment Officer for the past six years. It will also retain its investment philosophy and process, as well as the company name, organizational structure and headquarters in Portland, Ore.

“The Morley transaction enables us to focus on becoming a more comprehensive leader of financial solutions as we transition to a sub-advised platform,” said John H. Grady, president and chief executive officer of Nationwide Funds Group(SM). “We have enjoyed our successful relationship with Morley Financial Services and look forward to future successes as the firm becomes a sub-adviser to Nationwide Funds.”

Financial Impact

Principal Global Investors is acquiring Morley for approximately $75 million. The transaction is expected to be neutral to 2007 GAAP earnings per diluted share (EPS) and marginally accretive to EPS in 2008.

Forward looking and cautionary statements

This press release contains forward-looking statements, including, without limitation, statements as to sales targets, sales and earnings trends, and management’s beliefs, expectations, goals and opinions. The company does not undertake to update these statements, which are based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their effects on the company may not be those anticipated, and actual results may differ materially from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute to such material differences are discussed in the company’s annual report on Form 10-K for the year ended December 31, 2006, filed by the company with the Securities and Exchange Commission. These risks and uncertainties include, without limitation: competitive factors; volatility of financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales representatives; international business risks; foreign currency exchange rate fluctuations; a pandemic, terrorist attack or other catastrophic event; default of the company’s re-insurers; and investment portfolio risks.

About Principal Global Investors

Principal Global Investors is a diversified asset management organization and a member of the Principal Financial Group([R]), with expertise in equities, fixed income and real estate investments, as well as specialized overlay and advisory services. Principal Global Investors manages $213.6 billion in assets primarily for retirement plans and other institutional clients.1

Morley Financial is a leader in the stable value industry. Founded in 1982, today Morley Financial oversees more than $14.0 billion in assets for a diverse group of clients, including leading banks, corporations, Taft-Hartley Funds and investment counselors across the United States.

This report provides an overview of the creditor, pet, travel and motorcycle insurance markets in the UK.

Hightlights of this report Include:

–The ratio of annual to single trip cover has been growing in recent years. This has been driven by consumers taking shorter breaks more frequently, travel insurers greater promotion of annual cover and increasing consumer sophistication.

–The penetration rate of pet insurance is growing due to increasing accessibility and affordability. This has been driven primarily by the development of capped policies and growing availability of the product through retail distribution channels.

Changes to the “Rule of 78″ mean that switching is likely to increase and more customers are likely to settle their loans early. Therefore, creditor insurers are going to experience a higher incidence of consumers switching or canceling their PPI policies.

–This overview provides unique market share data, discussions of the key issues that are currently affecting each market and forecasts for the future size and growth of each market up to and including 2008.

Progressive Insurance will be allowed to raise its rates for motorcycle insurance by 15 percent this year, but the firm will have to file with the Oklahoma State Board for Property and Casualty Rates again next year to get another increase.

Progressive had voluntarily capped the requested increase so that no individual insured would have their rates raised by more than 15 percent this year. However, the company had asked to be allowed to keep increasing the rates for certain insureds by 15 percent every year for several years into the future.

The company’s filing included a revised rate structure, which would cause the cost of its policies overall to increase by 5 percent. Some insureds would wind up paying nearly 75 percent less under the revised rates, while others would pay more - up to 576 percent more, in one instance.

It would take several years for Progressive to gain a 576 percent increase by raising rates just 15 percent each year - longer than several of the current board members are likely to serve. The board allowed Progressive to raise rates by no more than 15 percent increase this year. But in order to obtain future increases, the company will have to go through the filing process again.

How to buy insurance when you’re the trapeze-flying, bull-riding, self-employed parent of a 16-year-old driver.

Bello Nock has performed on a trapeze attached to a helicopter flying 500 feet above the ground, walked across a high wire 300 feet up, and donned an inflatable suit to let himself be stepped on by an 8,000-pound elephant. But even Nock, a daredevil clown with the Big Apple Circus, has life and disability insurance.

“You have to shop around and get someone to listen to your story,” says Nock, a father of three. His insurance broker, Rich Brooks of River Forest, Ill., has worked with Nock’s family for years and knows the risks and safety measures involved with the stunts.

Not every insurer is receptive. But AIG, CNA, Lloyds of London and Transamerica have all insured the Nerveless Nocks (there are eight members of the troupe), though Bello pays about three to five times as much as he would if he didn’t have a high-risk job, says Brooks.

If they search hard enough, motorcycle racers, race-car drivers, oil-rig firefighters and even people who are already in poor health can find life and disability insurance. A few auto-insurance companies accept almost anyone–including your teenage son and people convicted of driving under the influence. One life insurance company even covers people with HIV. But “it’s not unusual for one company to charge triple what another would charge for the same person, or to decline the case entirely,” says Byron Udell, president of AccuQuote, an insurance-quote service.

Although EPLI is generally thought of in terms of limited liability companies and corporations, a sole proprietor can be a candidate as well. Overall, the EPLI market is in a level pricing mode with fewer markets, more selective underwriting, and markets unwilling to “give” away enhancements.

Rich Robin, executive vice president at NAS Insurance Services, states that throughout the 1990s EPLI was considered the sexiest coverage, creating the greatest opportunity for new premium. As a universal exposure, EPLI applied to any employer. On the other hand, all who were in the market through that period learned that EPLI was-and it still is-a volatile coverage with high frequency and severity of claims.

By the beginning of 2002, according to Robin, rate increases became standard and well understood. Most carriers tightened their wording to give them more control in handling claims, including adding full or partial hammer clauses and eliminating the ability for insureds to select defense counsel. The number of available markets decreased significantly during this period.

Robin says that the current marketplace has seen very few new entrants. Markets that are presently underwriting coverage are the same ones that weathered the soft market. EPLI underwriters have tinkered with rate, form and distribution in order to better focus on underwriting profit.