Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q4 2013 Earnings Presentation
30 slides from Voya Financial's earnings presentation, Feb 12, 2014
Slide 1: ING U.S. Fourth Quarter 2013 Investor Presentation
ING U.S. Fourth Quarter 2013 Investor Presentation February 12, 2014 RETIREMENT • INVESTMENTS • INSURANCE
Slide 2: Forward-Looking and Other Cautionary Statements
Forward-Looking and Other Cautionary Statements This presentation and the remarks made orally contain forward-looking statements. Forward-looking statements include statements relating to future developments in our business or expectations for our future financial performance and any statement not i
Slide 3: Agenda
Agenda 1. Key Highlights Rod Martin, Chairman and Chief Executive Officer 2. Executing Our Return on Equity (ROE) / Return on Capital (ROC) Improvement Plan Alain Karaoglan, Chief Operating Officer 3. Business Operating and Balance Sheet Metrics Ewout Steenbergen, Chief Financial Officer Retir
Slide 4: Year in Review: 2013 Achievements
Year in Review: 2013 Achievements Priced our IPO on May 1, 2013 and Trading Commenced at the NYSE on May Initial Public 2, 2013 Offering ING Group’s secondary offering on October 23, 2013 reduced its ownership Secondary stake to approximately 57% Offering Stock price increase of 80% (from May
Slide 5: Fourth Quarter and Full Year 2013 Financial Highlights
Fourth Quarter and Full Year 2013 Financial Highlights Fourth Quarter 2013 Full Year 2013 After-tax Operating $198 million, or $0.75 per diluted share $825 million, or $3.27 per diluted share Earnings1 $548 million driven by strong Ongoing $601 million driven by strong Ongoing Net Income Available t
Slide 6: Premier Franchise with Diverse Earnings
Premier Franchise with Diverse Earnings FY’13 Ongoing Business Adjusted Operating Earnings Before Income Taxes1: $1,212 million Investment 74% from Retirement Solutions and Investment Management Management Inv. Mgmt. Prominent multi-channel, multi- platform active asset manager for 14% institutions
Slide 7: Ongoing Business Adjusted Operating Return on Equity on Track to Meet Target
Ongoing Business Adjusted Operating Return on Equity on Track to Meet Target Ongoing Business Adjusted Operating ROE1 12.0-13.0% 10.3% 8.3% 7.6% FY'11 FY'12 FY'13 2016 Target 1. Ongoing Business includes Retirement, Annuities, Investment Management, Individual Life, and Employee Benefits segments; O
Slide 8: Agenda
Agenda 1. Key Highlights Rod Martin, Chairman and Chief Executive Officer 2. Executing Our Return on Equity (ROE) / Return on Capital (ROC) Improvement Plan Alain Karaoglan, Chief Operating Officer 3. Business Operating and Balance Sheet Metrics Ewout Steenbergen, Chief Financial Officer Retir
Slide 9: Ongoing Business Adjusted Operating Return on Capital Improved 140 bps in FY'13
Ongoing Business Adjusted Operating Return on Capital Improved 140 bps in FY’13 Adjusted Operating ROC Key Drivers of FY’13 ROC Improvement Retirement, Annuities, Investment Management, 10.0-11.0% Individual Life, and Employee Benefits all contributed to ROC improvement 8.6% Higher fee based mar
Slide 10: Margin Initiatives were the Biggest Driver of ROC Improvement
Margin Initiatives were the Biggest Driver of ROC Improvement, Followed by Growth and Capital Initiatives Ongoing Business Adjusted Operating ROC1 40 bps Interest 39 bps X% Capital Rates 8.6% X% 112 bps Growth X% X% (44) bps X% Margin 42 bps X% 30+ Strategic Initiatives 7.2% X% Monitored and Tracked
Slide 11: Retirement – Leading Franchise Driving Long-Term Growth and Returns
Retirement – Leading Franchise Driving Long-Term Growth and Returns Adjusted Operating ROC ROC Initiatives Adjusting crediting rates in response to changes in the external rate environment 10.0-11.0% Margin Increasing returns on Full Service 8.9% business Managing costs actively 7.2% 8.5% Co
Slide 12: Annuities – Selective Growth while Running Off Less Profitable Business
Annuities – Selective Growth while Running Off Less Profitable Business Adjusted Operating ROC ROC Initiatives Running off Annual Reset / Multi-Year 7.0-9.0% Guarantee Annuities (products with high 7.3% Margin fixed rate crediting levels) Ongoing management of crediting rates 5.9% 6.8% Growing
Slide 13: Investment Management – Scalable Platform Leveraging Strong Investment Performance
Investment Management – Scalable Platform Leveraging Strong Investment Performance Operating Margin1 Initiatives Improving sales force productivity Margin Reducing retail outflows 30.0-34.0% 27.7%* Increasing third-party business Growing in higher-fee asset classes 24.6% Growth Increasing
Slide 14: Individual Life – Repositioning Toward More Capital Efficient Products
Individual Life – Repositioning Toward More Capital Efficient Products Adjusted Operating ROC ROC Initiatives Reducing expense and commission structures Margin Adjusting crediting rates in response to 7.9% 6.0-8.0% changes in the external rate environment Shifting sales focus to indexed Capita
Slide 15: Employee Benefits – Higher Return and Capital Generation
Employee Benefits – Higher Return and Capital Generation with Less Interest Rate Sensitivity Adjusted Operating ROC ROC Initiatives Improving loss ratio for Stop Loss Margin policies 18.0-22.0% 18.8% Increasing persistency and sales in the Group business 16.9% Growth 18.1% Expanding the Volunt
Slide 16: Agenda
Agenda 1. Key Highlights Rod Martin, Chairman and Chief Executive Officer 2. Executing Our Return on Equity (ROE) / Return on Capital (ROC) Improvement Plan Alain Karaoglan, Chief Operating Officer 3. Business Operating and Balance Sheet Metrics Ewout Steenbergen, Chief Financial Officer Retir
Slide 17: Reconciliation of 4Q'13 Ongoing Business Adjusted Operating Earnings to Net Income
Reconciliation of 4Q’13 Ongoing Business Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) $209 $548 $263 ($44) $210 $19 $229 $198 ($29) ($2) $69 ($147) Ongoing Net gain from Ongoing Corporate Closed Block Operating Closed Block Net Realized Net Actuarial Other3 Other
Slide 18: Pension and Postretirement Benefit Plans Actuarial Gains in 2013
Pension and Postretirement Benefit Plans Actuarial Gains in 2013 Pension and other postretirement benefits annual re-measurement conducted in 4Q’13 resulted in actuarial pre-tax gains of $405 million Approximate 90 basis point increase in the discount rate used to value the liabilities Strong in
Slide 19: Diversified Drivers of Operating Revenues
Diversified Drivers of Operating Revenues Ongoing Business Sources of Revenues Net Primarily consists of ($ million) Underwriting difference between premiums Gain (Loss) and or fees charged for insurance Other Revenue risks and incurred benefits 1 $915 $929 $913 1 $947 $887 FY 2012 $204 $181 $222 $1
Slide 20: Improvement in Year-Over-Year Ongoing Business Adjusted Operating Earnings
Improvement in Year-Over-Year Ongoing Business Adjusted Operating Earnings, Managing Administrative Expenses to Flat Ongoing Business Adjusted Operating Earnings Before Income Taxes1 ($ million) +17% $324 $303 $307 $278 $278 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 Ongoing Business Administrative Expenses ($ m
Slide 21: Retirement Net Flows Accretive to ROC
Retirement Net Flows Accretive to ROC Retirement Net Flows1 ($ million) $1,781 $1,419 $1,285 $481 $508 $442 $938 $363 $240 $234 $191 $496 $148 $268 $251 $319 $215 ($85) 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 Net Flows excl. Stable Value Stable Value Net Flows 1. Excludes recordkeeping Retirement • Inve
Slide 22: Annuities Growing in Focused Areas, Running Off Less Profitable Business
Annuities Growing in Focused Areas, Running Off Less Profitable Business Annuities Net Flows1 ($ million) $169 $153 $106 $107 $140 $137 $8 $31 ($59) ($56) ($43) ($46) ($26) ($73) ($62) ($88) ($76) ($82) ($330) ($242) ($332) ($284) ($359) ($593) ($220) ($172) ($244) ($261) ($396) ($607) 3Q'12 4Q'12 1
Slide 23: Investment Management Net Flows Remain Solid
Investment Management Net Flows Remain Solid Investment Management Third-Party Net Flows1 ($ billion) $1.2 $0.6 $3.3 $3.1 $2.4 $0.9 $1.3 $0.2 $0.7 $0.3 $2.4 $0.6 $0.6 $0.5 $0.9 $0.0 ($0.5) ($0.6) ($0.5) ($0.6) ($0.6) ($0.7) Total $2.5 $4.5 $3.2 $3.1 $1.8 $0.6 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 Inve
Slide 24: Individual Life Sales and Expenses Reflecting Business Repositioning
Individual Life Sales and Expenses Reflecting Business Repositioning Individual Life Sales Individual Life Administrative ($ million) Expenses ($ million) $254 $307 $267 $100 FY'12 FY'13 FY'12 FY'13 Retirement • Investments • Insurance 24
Slide 25: Employee Benefits had Favorable Loss Ratios for Group Life and Stop Loss
Employee Benefits had Favorable Loss Ratios for Group Life and Stop Loss Sales1 Loss Ratios ($ million) (%) 85.4% $144 82.1% $10 78.7% 78.4% 77.5% 75.4% 76.9% 77.0% 72.0% $90 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 FY'11 FY'12 FY'13 82.9% $49 77.6% 78.4% $4 75.3% $30 $29 72.8% 72.9% $4 $18 $38 72.1% $44
Slide 26: Active Hedge Program in Closed Block Variable Annuity
Active Hedge Program in Closed Block Variable Annuity Change in Statutory Reserves Relative to Hedge 4Q’13 Results ($ billion) Equity impacts (increase) decrease in stat reserve liability Estimated available Equity impacts increase (decrease) in hedge assets resources of $4.1 billion $1.5 Estima
Slide 27: Combined Estimated RBC Ratio Strengthened, While Leverage Ratio is In-Line with Plan
Combined Estimated RBC Ratio1 Strengthened, While Leverage Ratio is In-Line with Plan Statutory Total Adjusted Capital ($ billion) and Combined Debt to Total Capital Ratio ex. Minority Interest and Estimated RBC Ratio1 AOCI3 $7.9 Target 27.2% 26.2% $7.0 $7.1 25% Debt 24.5% 23.5% 2 to Capital $6.7 $6
Slide 28: America's Retirement Company: Premier Franchise with Leading Positions
America’s Retirement CompanyTM 1 Premier Franchise with Leading Positions in Attractive Markets Experienced Management Team With a Goal of 400-500 bps ROE 2 Improvement from 2012 to 2016 3 Solid Foundation Based on a Re-Capitalized and De-Risked Balance Sheet Retirement • Investments • Insurance 28
Slide 29: Appendix
Appendix Retirement • Investments • Insurance 29
Slide 30: Seasonality of Financial Items
Seasonality of Financial Items 1Q 2Q 3Q 4Q Full Service Corporate Education Tax Exempt Full Service Corporate Retirement Markets typically sees Markets typically sees Markets typically sees highest recurring lowest recurring highest transfer / single deposits deposits deposits Management Per