Voya Financial (NYSE:VOYA) 2026 Conference Transcript

Summary of Voya Financial's Conference Call Company Overview - Company: Voya Financial - Industry: Life Insurance and Investment Management Key Messages and Financial Performance - Exceptional Year in 2025: Voya reported cash generation of $775 million, significantly up from the previous year, and achieved record commercial results in Retirement and Investment Management, with combined assets of $1 trillion in these sectors [2][3] - Growth Momentum: The company anticipates continued growth in cash generation into 2026, driven by commercial growth in retirement and investment management, alongside improvements in employee benefits margins [3][4] - Strong Balance Sheet: Voya maintains a robust balance sheet and cash-generative businesses, allowing flexibility in capital deployment, including $300 million allocated for share repurchases in the first half of the year [3][4] Retirement Business Highlights - Record Performance: The retirement business achieved a margin of close to 40%, exceeding the target range of 35%-39%, with record organic growth of $28 billion in flows, plus an additional $60 billion from the OneAmerica acquisition [6][9] - Participant Growth: Voya added nearly 2 million participants, bringing the total to approximately 10 million, indicating strong retention and scale in the retirement sector [6][9] - Investment in Wealth Management: Voya is focusing on expanding its wealth management capabilities to serve clients more holistically, leveraging its existing participant base [7][22] OneAmerica Acquisition Insights - Successful Integration: Voya exceeded revenue and earnings targets from the OneAmerica acquisition, achieving $200 million in revenue growth and $75 million in earnings, with strong client retention [11][12] - Market Positioning: Voya is positioned as a net consolidator in the retirement space, with opportunities for further acquisitions as the industry consolidates [12][13] Wealth Management Strategy - Established Business: Voya's wealth management business generates $200 million in existing revenues, representing about 10% of the overall business, with plans to grow this segment by adding advisors and enhancing digital tools [22][23] - Targeting Mass Affluent: The focus is on serving the mass affluent market, particularly millennials who lack access to financial advisors, by providing guidance and digital tools for retirement planning [28][29] Employee Benefits and Stop Loss Business - Claims Environment: The stop loss business is experiencing increased claims volatility, prompting Voya to adopt a more conservative approach to reserving [50][56] - Rate Increases: Voya successfully implemented a 21% rate increase for the January 2025 business and a 24% increase for January 2026, reflecting the broader market trend [53][54] - Market Demand: There is a growing demand for stop loss products as employers seek to manage healthcare costs, with RFPs for these products increasing significantly [55][62] Investment Management Performance - Organic Growth: Voya's investment management segment has outpaced industry growth, with a focus on expanding relationships in the insurance channel and increasing private and alternative investments [42][44] - Active ETFs Launch: The launch of active ETFs is part of Voya's strategy to enhance its investment management offerings and leverage its retirement and wealth management businesses [43][48] Capital Return Strategy - Consistent Capital Return: Voya is committed to returning capital to shareholders through share repurchases and dividends, while also pursuing bolt-on acquisitions [73][75] - High Return on Equity: The company is achieving a return on equity close to 19%, making it an attractive investment opportunity [73][75] Conclusion - Voya Financial is positioned for continued growth in 2026, driven by strong performance in its retirement and investment management businesses, strategic acquisitions, and a commitment to returning capital to shareholders. The company is actively engaging with younger generations to enhance financial planning and retirement savings, while navigating challenges in the stop loss market.