Principal Financial Group Inc. has created a “narrow economic moat” that allows it to score better than most life insurance companies with Morningstar Inc., the Chicago-based investment research firm.

In a March 28 report, Morningstar said it is maintaining a BBB credit rating for Principal, citing a “superior business model” in which more than half of its profits come from retirement products and asset management.

“The scale advantages and customer stickiness inherent to these businesses set Principal apart from other life insurers,” Morningstar said. “Principal can cross-sell its insurance products to the executives of firms that use them more as a retirement plan or for business protection than traditional life insurance.”

Principal also carries below-average debt for a life insurance company, Morningstar said, with a debt-to-capital ratio of 0.15 at the end of 2010.

On March 25, Zacks Equity Research said, “Principal’s strong franchise within the pension sector, aided by its diversification in both products and geography, positions it to benefit from the gradual recovery of the credit market.”

The only downside Zacks reported in maintaining a “neutral” rating for Principal was the company’s exposure to commercial real estate in its investment portfolio.