Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q1 2024 Earnings Presentation
29 slides from Voya Financial's earnings presentation, May 1, 2024
Slide 1: Voya Financial First Quarter 2024 Investor Presentation
Voya Financial First Quarter 2024 Investor Presentation May 1, 2024
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: Key Themes & Executing our Strategy
Key Themes & Executing our Strategy Heather Lavallee, Chief Executive Officer
Slide 4: First Quarter 2024 Financial Highlights
First Quarter 2024 Financial Highlights On Track to Achieve Full Year 2024 Targets Adjusted Excess Net Revenue Adj. Operating Adj. Operating Operating Capital Growth Margin ROE EPS1 Generation (TTM)2,3 (TTM)2,3 (TTM)2,3 $1.77 $0.2B 9% 32% 14.8% up 23% Y-o-Y FY’24 Target2,4: FY’24 Target4: $0.8B FY’2
Slide 5: Strategic Execution in Workplace Solutions Driving Growth
Strategic Execution in Workplace Solutions Driving Growth Strategic Priorities Examples of Execution Competitive Advantages ✓ Strengthen mid-market presence in retirement: Enhanced service model and increased mid-market sales team; known ✓ Leading market Land mid-market sales up 300% vs. same time l
Slide 6: Strategic Execution in Investment Management Driving Growth
Strategic Execution in Investment Management Driving Growth Strategic Priorities Examples of Execution Competitive Advantages Deliver ✓ Strong investment performance: 83% of public assets ✓ Industry leader with scale outperformed peers/benchmarks over 1 year, and 80% over in Private Fixed Income Exc
Slide 7: Voya Culture – Living our Purpose and Vision
Voya Culture – Living our Purpose and Vision Delivering for Our Giving Back to Our Supporting Our Customers Communities Colleagues Access to Guidance Advanced Financial Literacy Completed Integration of Voya India Evolving participant access to guidance to Through supporting high school financial We
Slide 8: Business Segment Performance & Financial Highlights
Business Segment Performance & Financial Highlights Don Templin, Chief Financial Officer
Slide 9: First Quarter 2024 Financial Results
First Quarter 2024 Financial Results (Millions, except EPS and capital generation) 1Q’23 1Q’24 DRIVERS Adjusted Operating EPS 1Q’24 adjusted operating EPS is 23% higher year- Per Diluted Share $1.44 $1.77 over-year: • Growth in fee-based revenues across Wealth, Investment Management and Health favor
Slide 10: Wealth Solutions: Participant base growth supporting asset growth
Wealth Solutions Consistent participant base growth has supported asset growth over time Defined Contribution (DC) Client Assets Full Service – Client Assets and Participant Account Growth1 (Billions) 620 Client Assets (billions) Participant Accounts (millions) 11 Spread-Based Fee-Based $512 520 $48
Slide 11: Wealth Solutions: Diversified revenue streams and strong margins
Wealth Solutions Diversified revenue streams and strong operating margins (Millions) Adjusted Operating Earnings Key Earnings Drivers ▪ 1Q’24 adjusted operating earnings of $186 million is higher year-over year, which includes more favorable alternative investment income over this time ▪ 1Q'24 net r
Slide 12: Health Solutions: In-force premium growth with pricing discipline
Health Solutions Strong in-force premium growth while maintaining pricing discipline Annualized In-Force Premium & Fees Aggregate Loss Ratio1 Target 7-10% Growth 1Q’24: 1Q’24 QTD Aggregate Loss Ratio of 74% +17% YoY FY’24 expected to be at high-end of range $3.9B 13.2% 69 - 72% 73% CAGR $3.3B $989 7
Slide 13: Health Solutions: Normalizing underwriting results
Health Solutions Normalizing underwriting results after record favorability in 2023 (Millions) Adjusted Operating Earnings Key Earnings Drivers ▪ 1Q’24 adjusted operating earnings of $59 million is lower year- over-year primarily reflecting aggregate loss ratios normalizing after favorable results i
Slide 14: Investment Management: Diversified asset manager
Investment Management Diversified asset manager with significant breadth across strategies, channels and clients access Assets Under Management $331B Diversified Asset Manager (Billions) (% of AUM) $322 $331 $321 Public $264 Fixed $246 Retail $223 45% Income 41% US 74% Equity 31% Institutional 45% P
Slide 15: Investment Management: Revenue growth driven by sales
Investment Management Revenue growth driven by strong sales in intermediary and insurance markets (Millions) Adjusted Operating Earnings Key Earnings Drivers Excludes Allianz noncontrolling interest ▪ 1Q’24 adjusted operating earnings of $42 million is higher year- over-year, and includes slightly l
Slide 16: Strong Cash Flow Generation and Disciplined Capital Return
Strong Cash Flow Generation and Disciplined Capital Return Expect to generate and return $800 million of excess capital to shareholders in FY’24 1Q’24 capital generation in-line with 90%+ target Highlights (Billions) ▪ Strong balance sheet 90%+ o Excess capital1 of $0.4 billion Free Cash Flow o Leve
Slide 17: Executing our Strategy and Achieving our Financial Targets
Executing our Strategy and Achieving our Financial Targets On Track To Achieve ■ On track to deliver $8.25 - $8.45 adjusted operating EPS for FY’24 Full Year Targets for ■ Profitable growth, strong margins and high free cash flow generation drive EPS growth 2024 ■ Robust pipelines across all three b
Slide 18: Appendix
Appendix
Slide 19: 1Q'24 Adjusted Operating to Net Income Walk
1Q’24 Adjusted Operating to Net Income Walk (Millions) Primarily Primarily Primarily Primarily Non-Cash Non-Cash Cash Non-Cash 3 4 5 1 2 1. Net investment gains primarily includes non-cash revaluation adjustments. 2. Income from businesses exited includes a non-cash tax benefit of $38 million relate
Slide 20: Analyst Modeling Considerations
Analyst Modeling Considerations Note: Teal font denotes change from 4Q’23 Alt. Income & ■ Annual alternative investments long-term expected return of 9% and general account prepayment fee long-term expected return of 10 basis points annual Prepayment contribution to yield, which for 2024 is approxim
Slide 21: Seasonality
Seasonality Note: Teal font denotes change from 4Q’23 Wealth Health IM Corporate & Other All Segments ▪ Admin expenses tend to be the ▪ Corporate tends to have the highest ▪ Group Life loss highest recurring deposits ratio tends to be highest ▪ Seasonally higher ▪ Payroll taxes and long-term 1Q ▪ Wi
Slide 22: 1Q'24 Notable Items Impacts
1Q’24 Notable Items Impacts Note: Totals may not sum due to rounding Alternative Income Above/(Below) Adjusted Operating Earnings (ex. Adjusted Operating Earnings1 1Q’24 (Millions) Expectations1,2 Notables) Wealth Solutions $186 $(14) $200 Health Solutions 59 - 60 Investment Management 53 (1) 54 Cor
Slide 23: Investment Management Delivering Strong Investment Performance for our Clients
Investment Management Delivering Strong Investment Performance for our Clients 1Q 2024 % AUM Above Benchmark or Peer Median1 90 89 92 94 87 83 80 79 79 78 80 73 75 66 64 68 59 62 65 57 Equity Multi-Asset Fixed Income & Growth Voya IM Income Total 1 Year 3 Year 5 Year 10 Year Represents >64% 3rd Part
Slide 24: Stop Loss is a Significant Growth Area for Voya
Stop Loss is a Significant Growth Area for Voya Net Underwriting Gains (Millions) ❑ Stop Loss is a $32B1 market today and growing due to move by $375 companies to self-fund healthcare plans and medical inflation $339 $292 ▪ Voya is a top 10 provider with 5% market share $260 $216 $215 $233 ▪ Mid-siz
Slide 25: Alternatives Portfolio Has Delivered Favorable Investment Performance Over Time
Alternatives Portfolio Has Delivered Favorable Investment Performance Over Time GA Alt Portfolio of $1.7 Billion Calendar Year Net Returns1,2,3 (%) As of 3/31/24 Long-term Return Target: 9% Real Estate Equity, 3% Hedge Funds, 1% Credit, 5% 44% Strategic Equity, 7% Infrastructure, 9% Private Equity,
Slide 26: Well-Diversified Investment Portfolio Built for Through-the-Cycle Returns
Well-Diversified Investment Portfolio Built for Through-the- Cycle Risk Adjusted Returns $37 Billion General Account Investment Portfolio1 96%+ Investment Grade2 Fixed Maturity NAIC Rating Distribution Commercial Limited 1% Mortgage Partnerships Loans 4% 3% Private Credit 14% Municipals 1A (AAA) 21%
Slide 27: Well Diversified and High-Quality CML Portfolio
Well Diversified and High-Quality CML Portfolio 450 Discrete loans across property types, geographies, and vintages Highly Rated Portfolio Loan to Value (LTV) Voya Underwritten1 73% of Loans Rated CM1, Weighted Average Debt Service Coverage Ratio (DSCR) and Above Industry Average of 46% Updated LTVs
Slide 28: Near Term CML Office Maturity Amounts are Modest and Manageable
Near Term CML Office Maturity Amounts are Modest and Manageable Office exposure underweight to ACLI industry benchmark CML Office: Weighted Average Voya UW LTV of 72% and Office Loan Call/Maturity Schedule by Year1 DSCR of 2.1x2 $372 million have a maturity date or call option in the next 5-years De
Slide 29: CMBS Portfolio Highly Rated and Well Diversified
CMBS Portfolio Highly Rated and Well Diversified $4.0B1 11% of General Account Credit Book CMBS Enhancement2 Value % NAIC 1B-G CMBS Government 34% Remaining 19% Agency Guaranteed General Account CMBS IO Limited Credit Risk 3% Agency or IO 4% 89% Conduit/CRE CLO 3% NAIC 1A NAIC 2 SASB 3% (AAA 13% SAS