Voya Financial, Inc. · NYSE:VOYA

Voya Financial — ING U.S. — Q3 2013 Earnings Presentation

26 slides from Voya Financial's earnings presentation, Nov 6, 2013

  1. Slide 1: ING U.S. Third Quarter 2013 Investor Presentation

    ING U.S. Third Quarter 2013 Investor Presentation November 6, 2013 RETIREMENT • INVESTMENTS • INSURANCE

  2. 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

  3. 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

  4. Slide 4: Third Quarter 2013 Highlights

    Third Quarter 2013 Highlights  After-tax operating earnings1 of $283 million, or $1.08 per diluted share  Net income available to common shareholders of $347 million driven by strong Ongoing Business operating earnings as well as the benefit of favorable DAC unlocking and net partnership income, n

  5. Slide 5: Premier Franchise with Diverse Earnings

    Premier Franchise with Diverse Earnings 9M’13 Ongoing Business Adjusted Operating Earnings Before Income Taxes1: $888 million 74% from Retirement Investment Solutions and Investment Management: 13% Management Inv. Mgmt. 13% Top 20 manager of institutional tax exempt assets2 Retirement Retirement Sol

  6. Slide 6: Ongoing Business Annualized Adjusted Operating Return on Equity on Track to Meet Target

    Ongoing Business Annualized Adjusted Operating Return on Equity on Track to Meet Target Ongoing Business Adjusted Operating ROE1 12.0-13.0% 9.9% 8.3% 7.6% FY'11 FY'12 9M'13 2016 Target 1. Ongoing Business includes Retirement, Annuities, Investment Management, Individual Life, and Employee Benefits s

  7. Slide 7: 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

  8. Slide 8: Ongoing Business Return on Capital Improved 110 bps in 9M'13

    Ongoing Business Return on Capital Improved 110 bps in 9M’13 Adjusted Operating ROC Key Drivers of 9M’13 ROC Improvement 10.0-11.0%  Retirement, Annuities, Investment Management, Individual Life, and Employee Benefits all contributed to ROC improvement 8.3%  Benefited from higher fee-based margin

  9. Slide 9: 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 business 8.9%  Managing costs actively 7.2%  Continu

  10. Slide 10: 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 Margin fixed rate crediting levels) 6.8%  Ongoing management of crediting rates 5.9%  Growing high

  11. Slide 11: Investment Management – Scalable Platform Leveraging Strong Investment Performance

    Investment Management – Scalable Platform Leveraging Strong Investment Performance Operating Margin1 Initiatives  Improving sales force productivity 30.0-34.0% Margin  Reducing retail outflows 26.5%*  Increasing third-party business 24.6%  Growing in higher-fee asset classes 24.1% Growth  Incre

  12. Slide 12: 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 6.0-8.0%  Adjusting crediting rates in response to 7.9% changes in the external rate environment  Shifting toward less capital intensive

  13. Slide 13: 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%  Increasing persistency and sales in the Growth Group business 16.9% 17.4%  Expanding the Voluntary bu

  14. Slide 14: 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

  15. Slide 15: Reconciliation of 3Q'13 Ongoing Business Adjusted Operating Earnings to Net Income

    Reconciliation of 3Q’13 Ongoing Business Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) $139 $347 $116 $315 $9 $283 ($41) $42 $199 ($8) ($109) Ongoing Net gain from Ongoing Corporate Closed Block Operating Closed Block Net Realized Other 1 Other Net Income 2 Busines

  16. Slide 16: Diversified Drivers of Operating Revenues

    Diversified Drivers of Operating Revenues Net Primarily consists of Ongoing Business Sources of Revenues ($ mn) Underwriting difference between premiums Gain (Loss) and or fees charged for insurance Other Revenue risks and incurred benefits 1 $922 $915 FY 2012 $929 $887 $913 Investment Primarily con

  17. Slide 17: ING U.S. Assumptions Review Update

    ING U.S. Assumptions Review Update  Annual review of assumptions and projection model inputs completed during 3Q’13  Total company impact is a pre-tax loss of $91 million on a GAAP basis and a decrease in statutory reserves of $367 million1 Effects of Assumptions and Model Updates ($ million) CBVA

  18. Slide 18: Improvement in Year-Over-Year Operating Earnings, Administrative Expenses Down

    Improvement in Year-Over-Year Operating Earnings, Administrative Expenses Down Ongoing Business Adjusted Operating Earnings Before Income Taxes1 ($ mn) +4% $303 $307 $296 $278 $278 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 Ongoing Business Administrative Expenses ($ mn) -2% 2 $411 $422 $413 $13 $416 $404 $400 3

  19. Slide 19: Retirement Positive Net Flows Helped by Stable Value

    Retirement Positive Net Flows Helped by Stable Value Retirement Net Flows1 ($ mn) $1,781 $1,419 $481 $1,285 $557 $508 $938 $442 $239 $240 $191 $234 $496 $318 $268 $251 $319 ($85) 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 Net Flows excl. Stable Value Stable Value Net Flows 1. Excludes recordkeeping Retirem

  20. Slide 20: Annuities Growing in Focused Areas, Running Off Less Profitable Business

    Annuities Growing in Focused Areas, Running Off Less Profitable Business Annuities Net Flows ($ mn) 1. Annual reset (AR) / Multi-year guarantee annuities (MYGA) are in run-off Retirement • Investments • Insurance 20

  21. Slide 21: Investment Management Net Flows Helped by Sub-Advisor Replacements

    Investment Management Net Flows Helped by Sub- Advisor Replacements Investment Management Third-Party Net Flows1 ($ bn) $1.2 $0.6 $3.3 $3.1 $2.4 $0.9 $0.2 $0.7 $0.3 ($0.4) - $2.4 $0.6 $0.6 $0.5 $0.9 ($0.5) ($0.5) ($0.6) ($0.5) ($0.6) ($0.6) Total ($0.8) $2.5 $4.5 $3.2 $3.1 $1.8 2Q'12 3Q'12 4Q'12 1Q'

  22. Slide 22: Individual Life Sales Reflect Shift to Less Capital Intensive Products and Pricing Actions

    Individual Life Sales Reflect Shift to Less Capital Intensive Products and Pricing Actions Universal Life and Variable Life Sales Term Sales ($ mn) ($ mn) $41 $1 $7 $35 $35 $2 $9 $7 $26 $28 $2 $8 $5 $28 $19 $14 $23 $15 $13 $14 $25 $12 $3 $12 $11 $2 $4 $3 $19 $18 $4 $3 $15 $14 $11 $8 $7 $8 $7 $6 $5 $

  23. Slide 23: Loss Ratio for Stop Loss Remained Strong; Group Life Hurt by Unfavorable Mortality

    Loss Ratio for Stop Loss Remained Strong; Group Life Hurt by Unfavorable Mortality Sales1 Loss Ratios ($ mn) (%) $144 85.4% 82.1% $10 77.0% 78.4% 75.4% 69.5% $90 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 $49 $4 77.6% 75.5% 72.8% $32 70.3% 72.1% $30 69.5% $5 $4 $38 $18 $44 $18 $19 $13 $8 $4 $13 $8 $12 $7 $

  24. Slide 24: Active Hedge Program in Closed Block Variable Annuity

    Active Hedge Program in Closed Block Variable Annuity Change in Statutory Reserves Relative to Hedge 3Q’13 Results ($ bn) Equity impacts (increase) decrease in stat reserve liability  Available Equity impacts increase (decrease) in hedge assets resources of $4.8bn $1.5 $1.0 $1.2 $1.0  Guaranteed L

  25. Slide 25: Combined Estimated RBC Ratio Strengthened, While Leverage Ratio is In-Line with Plan

    Combined Estimated RBC Ratio Strengthened, While Leverage Ratio is In-Line with Plan Statutory Total Adjusted Capital ($ bn) & Combined Debt to Total Capital Ratio ex. Minority Interest and Estimated RBC Ratio AOCI2 $7.8 $7.9 Target 27.2% 26.2% 25% Debt 24.5% $7.0 to Capital 1 $6.7 $6.7 Ratio 5.3% 5

  26. Slide 26: Premier Franchise with Leading Positions in Attractive Markets

    America’s Retirement CompanyTM 1 Premier Franchise with Leading Positions in Attractive Markets Experienced Management Team With a 400-500 bps ROE 2 Improvement Goal by 2016 3 Solid Foundation Based on a Re-Capitalized and De-Risked Balance Sheet Retirement • Investments • Insurance 26

ING U.S. — Q3 2013 Earnings Presentation on 6ix