Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q2 2022 Earnings Presentation
27 slides from Voya Financial's earnings presentation, Aug 3, 2022
Slide 1: Voya Financial Second Quarter 2022 Investor Presentation
Voya Financial Second Quarter 2022 Investor Presentation August 3, 2022
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 ■ Heather Lavallee, President and CEO-elect 2. Business Segment Performance and Financial Highlights ■ Mike Smith, Vice Chairman and Chief Financial Officer 3
Slide 4: Key Themes
Key Themes ■ 2Q'22 adjusted operating earnings of $1.67 per share1 ■ Supported by pre-tax adjusted operating earnings of $223 million Strong EPS Growth ■ 2Q’22 adjusted operating earnings excluding notable items of $1.75 per share, up 18% compared with 2Q’21 ■ Wealth Solutions generated positive Ful
Slide 5: Advancing our Brand and Culture
Advancing our Brand and Culture Earned recognition as a “Best Place to Work for Voya employees volunteered more than 10,000 Disability Inclusion,” with a score of 100% on the total hours – to numerous nonprofits across the Disability Equality Index – for the fifth country consecutive year Recognized
Slide 6: Leadership-Succession Plan Announced
Leadership-Succession Plan Announced Rod Martin, Heather Lavallee, Chairman and CEO President and CEO-elect “Rod’s leadership and vision have enabled a significant transformation of the Voya enterprise during the past decade to a highly focused and well-capitalized group of health, wealth, and inves
Slide 7: Agenda
Agenda 1. Key Themes and Strategic Priorities ■ Rod Martin, Chairman and Chief Executive Officer ■ Heather Lavallee, President and CEO-elect 2. Business Segment Performance and Financial Highlights ■ Mike Smith, Vice Chairman and Chief Financial Officer 7
Slide 8: Second Quarter 2022 Results – Financial Highlights
Second Quarter 2022 Results – Financial Highlights After-tax Adjusted Operating Net Income (Loss) Available to Earnings Per Share¹ Common Shareholders 2Q’22 2Q’22 $1.67 $64 per diluted share million Notable Items 2Q’22 Includes 2Q’22 ■ Alternative investment income and prepayment ■ Adjusted operatin
Slide 9: Wealth Solutions – Strong Operating Margins from Diverse Revenue Streams and Markets
Wealth Solutions – Strong Operating Margins from Diverse Revenue Streams and Markets Adjusted Operating Earnings1 ($ millions) Full Service Client Assets ($ billions) Current Quarter TTM Spread-based Fee-based $951 $181 $178 $833 $159 Full Service Net Cash Flows $148 $145 of +$1.0 Billion in the qua
Slide 10: Health Solutions – Continuing Diverse Growth in Revenue and Premiums
Health Solutions – Continuing Diverse Growth in Revenue and Premiums while Maintaining Strong Pricing Discipline Adjusted Operating Earnings1 ($ millions) Annualized In-Force Premiums ($ millions) Voluntary Stop Loss Group Life & Disability Current Quarter TTM $206 $2,705 $2,722 $2,490 $173 $807 $81
Slide 11: Investment Management – Privates and Alts led the Differentiated Growth
Investment Management – Privates and Alts led the Differentiated Growth within the quarter Adjusted Operating Earnings1 ($ millions) Assets Under Management ($ billions) Current Quarter TTM Privates and Alternatives Equity Fixed Income - Public & Other 3 $330 $255 $201 AllianzGI assets of $93 billio
Slide 12: Disciplined and Opportunistic Capital Management
Disciplined and Opportunistic Capital Management Year-to-Date Capital Deployed Debt Extinguishment $0.6 billion $1.0 billion Excess Capital1 as of 6/30/22 $1.7 billion TTM Capital Deployed Dividends $0.7 billion $82 million ❑ 36.9% Financial Leverage Ratio2 Share Repurchases ❑ 426% Estimated Combine
Slide 13: Voya is a Leading Wealth, Health, and Investment Company
Voya is a Leading Wealth, Health, and Investment Company 1 Continue to Drive Strong EPS Growth 2 Momentum across Diverse Revenue Streams and Markets 3 Disciplined and Opportunistic Capital Management 13
Slide 14: Appendix
PLAN | INVEST | PROTECT 14 FINANCIAL
Slide 15: Emphasis on ESG and Leading ESG Practices
Emphasis on ESG and Leading ESG Practices Environmental Social Governance Encouraging Aligned social purpose Robust, independent sustainable practices and empowering oversight aligning at home and the individuals business with workplace shareholder interests • Energy use down • Socially responsible
Slide 16: Seasonality of Financial Items
Seasonality of Financial Items 1Q 2Q 3Q 4Q ■ Corporate Markets tends to have ■ 91 fee and crediting interest ■ Education Tax-Exempt ■ Corporate Markets typically see Wealth Solutions the highest recurring deposits days in quarter Markets typically see lowest highest transfer / single deposits recurr
Slide 17: Analyst Modeling Considerations
Analyst Modeling Considerations Prepayment Income and ■ Long-term prepayment income quarterly expectation in 2022 (pre-tax, pre-DAC): $9 million for Wealth Solutions Alternative ■ Approximately 9% annual long-term expected returns (pre-tax, pre-DAC) for alternative income Income ■ 2022 adjusted oper
Slide 18: 2Q'22 and 2Q'21 Notable Items Impacts
2Q'22 and 2Q'21 Notable Items Impacts Investment Income Net of Variable and Adjusted Operating Incentive Covid-19 Impacts3 Other Notables4 Earnings1 2Q'22 Compensation Above (Below) Expectations2 Wealth Solutions $186 $(7) – $(4) Health Solutions 47 (0) – – Investment Management 40 (2) – – Corporate
Slide 19: Reconciliation of 2Q'22 Adjusted Operating Earnings to Net Income
Reconciliation of 2Q'22 Adjusted Operating Earnings to Net Income ($ millions; all figures are after-tax) 3 1 2 1. The adjusted operating tax expense is based on the actual income tax expense for the current period related to Income (loss) from continuing operations, adjusted for estimated taxes on
Slide 20: Reliable Long-Term Investment Performance Critical to Future Success
Reliable Long-Term Investment Performance Critical to Future Success 2Q 2022 % AUM Above Benchmark or Peer Median1 98 91 89 80 77 77 70 65 50 53 19 19 Equity Multi-Asset Fixed Voya IM Income Total 3 Year 5 Year 10 Year 1. Voya Investment Management calculations as of June 30, 2022. Metrics presented
Slide 21: Well-Diversified Investment Portfolio Built for Through-The-Cycle Risk Adjusted Returns
Well-Diversified Investment Portfolio Built for Through-The- Cycle Risk Adjusted Returns General Account Investment Portfolio1 $41 Billion Munis LP/Equity 2% 6% 5% Short Term / Treasury 2% 44% Public CML 14% Corporate 32% 51% Securitized 25% Private Credit 19% Fixed Maturity Ratings 2 NAIC 1 NAIC 2
Slide 22: Well-Balanced, High-Quality Rating Mix
Well-Balanced, High-Quality Rating Mix ❑ 96% of fixed maturity assets are investment grade ❑ 45% of the fixed maturity assets3 in the investment portfolio are NAIC 21 ▪ Approximately 65% / 35% split between Public and Private ❑ Minimal allocation to below investment grade is opportunistic % of Fixed
Slide 23: Private Credit Provides Income, Diversification and Downside Protection
Private Credit Provides Income, Diversification and Downside Protection ❑ 19% allocation in the investment portfolio, of which 92% is Investment Grade ❑ Covenant structures in Private Credit provide more protections than Public Investment Grade Bonds ❑ Voya Investment Management is a Tier One invest
Slide 24: Low Leverage Commercial Mortgage Loan Portfolio
Low Leverage Commercial Mortgage Loan Portfolio ❑ 14% allocation in the investment portfolio, of which 80% is rated CM 1 ❑ Weighted average debt service coverage ratio (DSCR) of 2.0x ❑ Weighted average loan-to-value (LTV) ratio of 46%1 Diversified Portfolio Exposure Hotel, 2% Mixed Use, 2% Manufactu
Slide 25: CMBS is Tilted Toward Agency and Loss Remote Credit
CMBS is Tilted Toward Agency and Loss Remote Credit ❑ 10% allocation in the investment portfolio, of which 96% is NAIC 1 or 2 ❑ 35% of exposure is Agency with no credit risk ❑ 28% is to directly underwritten Single Asset Single Borrower (SASB) ❑ 36% is to Conduit/CRE CLO with meaningful structural c
Slide 26: CLO Portfolio is Modestly Sized and Highly Rated
CLO Portfolio is Modestly Sized and Highly Rated ❑ 3% allocation1 in the investment portfolio, of which 91% is rated NAIC 1 ▪ Below Investment Grade and Equity exposure exclusively in Voya issued transactions ❑ Significant Credit Enhancement (CE)2 mitigates the risk of loss Voya Portfolio Generic CL
Slide 27: Alternatives Portfolio Has Delivered Favorable Investment Performance Over Time
Alternatives Portfolio Has Delivered Favorable Investment Performance Over Time Key Characteristics of $1.8 Billion Calendar Year Net Returns1,2 (%) Alternatives Portfolio Profile2 (as of 06/30/22) Long-term Return Target: 9.0% ❑ Diversified across traditional Private Equity, Infrastructure, Real Es