Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q1 2020 Earnings Presentation
26 slides from Voya Financial's earnings presentation, May 6, 2020
Slide 1: Voya Financial First Quarter 2020 Investor Presentation
Voya Financial First Quarter 2020 Investor Presentation May 6, 2020
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. The company does not assume any obligation to revise or update these statements to reflect new information, subsequent events or changes in strategy. Forward-looking stat
Slide 3: Agenda
Agenda 1. Key Themes and Strategic Priorities ■ Rod Martin, Chairman and Chief Executive Officer 2. Business Segment Performance and Financial Highlights ■ Mike Smith, Chief Financial Officer 3
Slide 4: Voya's Firm-Wide Response to COVID-19
Voya’s Firm-Wide Response to COVID-19 Employees Customers Communities Activated Business Continuity Plan, First retirement plan provider to Providing free online resources and with over 95% of employees announce our implementation of phone access to financial advisors working remotely defined
Slide 5: Key Themes
Key Themes ■ Normalized 1Q’20 adjusted operating earnings of $1.10 per share1, excluding: ■ $0.04 of prepayment and alternative income above our long-term expectations Delivering EPS ■ $(0.09) of DAC/VOBA and other intangibles unlocking Growth in 1Q’20 ■ $(0.21) of stranded costs2 from the sale of I
Slide 6: Recent Enterprise Accomplishments
Recent Enterprise Accomplishments Named one of the World’s Most Named to Fortune’s list of the 2020 Ethical Companies for the seventh World’s Most Admired Companies consecutive year 2020 100 Most Sustainable Companies List Ranked No. 3 overall; Highest-ranked Member of the 2020 Bloomberg financial s
Slide 7: Agenda
Agenda 1. Key Themes and Strategic Priorities ■ Rod Martin, Chairman and Chief Executive Officer 2. Business Segment Performance and Financial Highlights ■ Mike Smith, Chief Financial Officer 7
Slide 8: First Quarter 2020 Results – Financial Highlights
First Quarter 2020 Results – Financial Highlights After-tax Adjusted Operating Net Income (Loss) Available to Earnings Per Share¹ (Normalized) Common Shareholders 1Q’20 1Q’20 $1.10 $(98) per diluted share million Excludes 1Q’20 Includes 1Q’20 ■ Prepayment fees and alternative income above 0.04 ■ Adj
Slide 9: Retirement – Industry Leading Provider of Retirement Solutions
Retirement – Industry Leading Provider of Retirement Solutions across all Plan Sizes and Markets Adjusted Operating Earnings1 ($ millions) Full Service Client Assets ($ billions) Current Quarter TTM Spread-based Fee-based $144 $130 $125 $677 $633 $112 $99 $93 Includes Prepayments and $31 $31 $32 $12
Slide 10: Investment Management – Delivering Strong Investment Performance and Net Flows
Investment Management – Delivering Strong Investment Performance and Net Flows Adjusted Operating Earnings1 ($ millions) Assets Under Management ($ billions) Current Quarter TTM General Account External Clients $186 $223 $178 $210 $211 $154 $167 $154 Includes Prepayments and $40 $56 $57 $57 $34 Alte
Slide 11: Employee Benefits – Growing while Maintaining Underwriting and Expense Discipline
Employee Benefits – Growing while Maintaining Underwriting and Expense Discipline Adjusted Operating Earnings1 ($ millions) Annualized In-Force Premiums ($ millions) Current Quarter TTM Group Life & Disability Stop Loss Voluntary $2,163 $2,138 $2,271 $390 $390 $483 $222 $166 $1,053 $1,038 $1,084 Inc
Slide 12: Adjusted Operating EPS Considerations
Adjusted Operating EPS Considerations 1Q’20 Financial Results Reported 1Q’20 Adjusted Operating EPS1 $0.83 Includes: ■ Prepayment fees and alternative income above long-term expectations 0.04 ■ DAC/VOBA and other intangibles unlocking (0.09) ■ Stranded costs from Individual Life transaction (0.21) N
Slide 13: Macro Sensitivities and COVID-19 Financial Impacts
Macro Sensitivities and COVID-19 Financial Impacts Equity Impacts1 COVID-19 Business Impacts $4 – 5 million annual, pre-tax operating earnings impact for every Challenged visibility into future unemployment and 1% move in the S&P500, calculated on a daily average change economic recovery levels
Slide 14: Well-Diversified Investment Portfolio Built for Through-The-Cycle Risk Adjusted Returns
Well-Diversified Investment Portfolio Built for Through-The- Cycle Risk Adjusted Returns $59 Billion $38 Billion (Post Life Estimate) General Account Investment Portfolio1 General Account Investment Portfolio2 Munis LP/Equity 3% Short 3% Term/Treasury Munis LP/Equity Short 3% 2% 4% Term/Treasury 5%
Slide 15: Investment Portfolio COVID-19 Exposure and Stress Tests
Investment Portfolio COVID-19 Exposure and Stress Tests COVID-19 Sector Exposure1 Investment Portfolio Stress Test1 Impact to Excess Capital Remaining GA from Rating Migration and Impairments 88% Stress Case One Stress Case Two ~$300 million ~$600 million COVID-19 Impacted Scenarios project potent
Slide 16: Strong Capital Position
Strong Capital Position Estimated Combined Excess Capital Debt-to-Capital Ratio3 Adjusted RBC Ratio¹ ($ millions)2 455% $612 32.1% Target: Target: 400% 30% Shares repurchased in Deployable capital expected in Per share dividend $406M 1Q’20: $1.3 billion TTM $1.5B 3Q’20 at close of Individual $0.15 m
Slide 17: Helping Americans Get Ready to Retire Better
Helping Americans Get Ready to Retire Better 1 Delivering EPS Growth in 1Q’20 2 Generating Organic Growth Across All Businesses 3 On Track to Close Individual Life Transaction by 3Q’20 4 Capital Position Remains Strong 17
Slide 18: Appendix
PLAN | INVEST | PROTECT 18 FINANCIAL
Slide 19: Reconciliation of 1Q'20 Adjusted Operating Earnings to Net Income
Reconciliation of 1Q’20 Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) 1Q’20 115 (6) (128) (70) 7 (16) (98) Adjusted Operating Net Investment Gains Net Gains (Losses) Net Guaranteed Income Related to Other Net Income (Loss) Earnings 1 (Losses) from Discontinued Bene
Slide 20: Spotlight: Commercial Mortgage Loans
Spotlight: Commercial Mortgage Loans Key Message: ~$5.6 billion allocation1 with weighted average debt service coverage ratio (DSCR) of 2.3x and weighted average loan-to-value (LTV) ratio of 46%2. Retail focus on need driven properties, such as grocery anchored. Diversified Portfolio Exposure $6,000
Slide 21: Spotlight: Collateralized Loan Obligations
Spotlight: Collateralized Loan Obligations Key Message: ~$1.2 billion allocation1,2 with significant Credit Enhancement (CE)3 to mitigate the risk of par losses. 97% rated NAIC 1 / 2 with all NAIC 2 and below holdings in Voya-issued transactions. Generic CLO Structure4 • Collateral losses are alloca
Slide 22: Spotlight: Energy Exposure
Spotlight: Energy Exposure Key Message: ~$2.1 billion portfolio1 is 86% rated NAIC 1 / 2. Exposure has been steadily declining as a percentage of fixed maturity assets, estimated post Life to be 6.6%. 65%/35% split between Public and Private Credit. Energy Exposure Concentrated in Midstream 11.6% 9.
Slide 23: Spotlight: BBB Exposure
Spotlight: BBB Exposure Key Message: ~$13 billion NAIC 2 portfolio1,2 is approximately 55%/45% split between Public and Private. Private exposure provides combination of structural protections and attractive value. Minimal BIG allocation is opportunistic. % of Fixed Maturity Assets4 11.6% 6.4% 15.5%
Slide 24: Seasonality of Financial Items
Seasonality of Financial Items 1Q 2Q 3Q 4Q ■ Corporate Markets tends to have ■ Education Tax-Exempt ■ Corporate Markets typically see the highest recurring deposits Markets typically see lowest highest transfer / single deposits Retirement recurring deposits ■ Withdrawals also tend to ■ Withdrawals
Slide 25: Analyst Modeling Considerations
Analyst Modeling Considerations Prepayment Income ■ Long-term prepayment income quarterly expectation in 2020 (pre-tax, pre-DAC): $8 million for Retirement and Alternative ■ Approximately 9% annual long-term expected returns (pre-tax, pre-DAC) for alternative income; 2Q’20 performance expected Incom
Slide 26: Reliable Long-Term Investment Performance Critical to Future Success
Reliable Long-Term Investment Performance Critical to Future Success % AUM Above Benchmark or Peer Median1 98 81 76 67 60 62 57 52 45 48 32 32 Equity Multi-Asset Fixed Voya IM Income Total 3 Year 5 Year 10 Year 1. Voya Investment Management calculations as of March 31, 2020. Metrics presented are ba