We also had lower variable investment income in the first half of 2012 compared to the prior year period, which Terry will comment on. Despite these macroeconomic headwinds, the fundamentals of our business remain strong and we continue to see sales pipelines grow. We ended the quarter with record assets under management of $367 billion. Second quarter net cash flows were $7.3 billion, which are more than double second quarter 2011 net cash flows. And so far in 2012, we have over $15 billion in net cash flows.
The sequential improvement in operating earnings demonstrates that we remained focused on execution as we strike the right balance between growth and profitability in this challenging environment. Our competitive position remains strong due to our innovative solutions, such as Total Retirement Suite for our retirement clients, voluntary benefit choices for our Specialty Benefits customers and outcome-oriented investment solutions for our mutual fund and institutional asset management clients.
We also continue to deepen and strengthen our relationships with key distribution partners. Key growth metrics from the quarter include Full Service Accumulation sales of $2.3 billion, up 34% compared to second quarter 2011. Net cash flows of $1.9 billion were nearly double that of the year ago quarter and reflect not only great sales momentum but also excellent client retention and growth in recurring deposits. Principal Funds had sales of $3.4 billion, our second highest on record contributing to our second highest quarterly net cash flow on record at $1.1 billion. Principal Global Investors ended the quarter with unaffiliated assets under management of $92.3 billion, a 16% increase over the year ago quarter and unaffiliated net cash flows of $2.1 billion, a strong improvement over second quarter 2011. Reported record assets under management for Principal International were $60.3 billion, up 14% over the year ago quarter and net cash flows of $2.3 billion are up 28% over the same time last year despite foreign currency exchange rate pressures and lower inflation in the second quarter in Latin America which reduces investment income. In U.S. Insurance Solutions, Individual Life sales of $45 million were up 6% over second quarter 2011. Specialty benefits premium and fees grew 5% over the year ago quarter to $361 million.