Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q2 2021 Earnings Presentation
24 slides from Voya Financial's earnings presentation, Aug 6, 2021
Slide 1: Voya Financial Second Quarter 2021 Investor Presentation
Voya Financial Second Quarter 2021 Investor Presentation August 6, 2021
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, Vice Chairman and Chief Financial Officer 3
Slide 4: Key Themes
Key Themes ■ 2Q’21 adjusted operating earnings of $2.20 per share1 ■ Notable items for 2Q’21 are: Delivered Record EPS ■ $0.77 of prepayment and alternative income above our long-term expectations2 in 2Q’21 ■ $0.11 of DAC/VOBA and other intangibles unlocking ■ $(0.08) of Covid-19 related claims impa
Slide 5: Culture and Brand as a Differentiator
Culture and Brand as a Differentiator As an original signatory of CEO Action for Voya employees volunteered Diversity & Inclusion, Voya recently held a approximately 10,000 total hours – Day of Understanding. to numerous nonprofits across the country. Voya’s 2021 inclusive advertising campaign Earne
Slide 6: Agenda
Agenda 1. Key Themes and Strategic Priorities ■ Rod Martin, Chairman and Chief Executive Officer 2. Business Segment Performance and Financial Highlights ■ Mike Smith, Vice Chairman and Chief Financial Officer 6
Slide 7: Second Quarter 2021 Results – Financial Highlights
Second Quarter 2021 Results – Financial Highlights After-tax Adjusted Operating Net Income (Loss) Available to Earnings Per Share¹ Common Shareholders 2Q’21 2Q’21 $2.20 $459 per diluted share million Notable Items 2Q’21 Includes 2Q’21 ■ Prepayment fees and alternative income above $0.77 ■ Adjusted o
Slide 8: Wealth Solutions – Industry Leading Provider of Outcome-Oriented Solutions
Wealth Solutions – Industry Leading Provider of Outcome-Oriented Solutions and Capabilities across all Plan Sizes and Markets Adjusted Operating Earnings1 ($ millions) Full Service Client Assets ($ billions) Current Quarter TTM Spread-based Fee-based $181 $171 $833 $142 $138 $148 $440 $110 Includes:
Slide 9: Investment Management – Delivering Strong Investment Performance and Net Flows
Investment Management – Delivering Strong Investment Performance and Net Flows Adjusted Operating Earnings1 ($ millions) Assets Under Management ($ billions) Current Quarter TTM General Account External Clients $255 $249 $253 $230 $165 $173 $210 $215 Includes Prepayments and $66 $57 $20 $39 $38 Alte
Slide 10: Health Solutions – Growing while Maintaining Underwriting and Expense Discipline
Health Solutions – Growing while Maintaining Underwriting and Expense Discipline Adjusted Operating Earnings1 ($ millions) Annualized In-Force Premiums ($ millions) Current Quarter TTM Group Life & Disability Stop Loss Voluntary $2,466 $2,490 $2,268 $554 $550 $209 $206 $477 $1,075 $1,182 $1,191 Incl
Slide 11: Adjusted Operating EPS Considerations
Adjusted Operating EPS Considerations 3Q’21 Considerations1 Reported 2Q’21 Adjusted Operating EPS2 $2.20 Potential Offsetting Items: ■ Prepayment fees and alternative income returning to more normal levels (0.77) ■ Favorable DAC/VOBA and other intangibles unlocking not recurring in 3Q (0.11) ■ Prefe
Slide 12: Robust Capital Position with Strong Free Cash Flow Generation
Robust Capital Position with Strong Free Cash Flow Generation Capital Returned to Shareholders Excess Capital ($ millions) ($ billions)1 $1,131 $1,140 $1,031 $8 $6 $44 Paused repurchases in 2Q’20 to be prudent during COVID-19. Resumed repurchases in 4Q’20. $793 $1.5 $40 $602 $1,125 $1,096 $76 Projec
Slide 13: Helping Americans Get Ready to Retire Better
Helping Americans Get Ready to Retire Better 1 Delivered Record EPS in 2Q’21 2 Continued Momentum Across All Businesses 3 Strong Shareholder Return 13
Slide 14: Appendix
PLAN | INVEST | PROTECT 14 FINANCIAL
Slide 15: 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 16: Analyst Modeling Considerations
Analyst Modeling Considerations Prepayment Income ■ Long-term prepayment income quarterly expectation in 2021 (pre-tax, pre-DAC): $8 million for Wealth Solutions and Alternative Income ■ Approximately 9% annual long-term expected returns (pre-tax, pre-DAC) for alternative income ■ Reduction in asset
Slide 17: 2Q'21 and 2Q'20 Notable Items Impacts
2Q’21 and 2Q’20 Notable Items Impacts Prepays and DAC/VOBA Covid-19 Adjusted Alt Income and Other Related Other Operating 2Q’21 Above/(Below) Intangibles Claims Notables4 Earnings1 Expectations2 Unlocking Impact3 Wealth Solutions $295 $96 $18 – – Investment Management 66 20 – – (3) Health Solutions
Slide 18: 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 92 89 93 89 84 72 67 65 38 28 18 Equity Multi-Asset Fixed Voya IM Income Total 3 Year 5 Year 10 Year 1. Voya Investment Management calculations as of June 30, 2021. Metrics presented are bas
Slide 19: Emphasis on ESG and Leading ESG Practices
Emphasis on ESG and Leading ESG Practices Governance Social Environmental Robust, independent Aligned social purpose Encouraging oversight aligning and empowering sustainable practices business with individuals at home and the shareholder interests workplace • Board Gender parity • Socially responsi
Slide 20: Investment Portfolio COVID-19 Exposure and Stress Tests
Investment Portfolio COVID-19 Exposure and Stress Tests COVID-19 Sector Exposure1 Investment Portfolio Stress Test1 Potential Impact to Excess Capital Remainin from Rating Migration and Impairments in 2H’21 g GA 89% Stress case: ~$100 million Potential impact assumes no active management Negativ
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 $40 Billion General Account Investment Portfolio1 Munis LP/Equity 2% 5% Short Term / Treasury 6% 2% 44% Public Corporate CML 14% 33% 50% Securitized 24% 2 Private Fixed Maturity Ratings Credit 20% NAIC 1 NAIC 2
Slide 22: 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. No material exposure to real estate e
Slide 23: Spotlight: BBB Exposure
Spotlight: BBB Exposure Key Message: ~$14.7 billion NAIC 2 portfolio1,2 is approximately 65%/35% split between Public and Private. Private exposure provides combination of structural protections and attractive value. Minimal below investment grade allocation is opportunistic. % of Fixed Maturity Ass
Slide 24: Reconciliation of 2Q'21 Adjusted Operating Earnings to Net Income
Reconciliation of 2Q’21 Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) 2Q’21 195 (35) 459 23 (6) (4) 287 Adjusted Operating Net Investment Income (Loss) from Net Guaranteed Income (Loss) Other Net Income (Loss) Earnings 1 Gains (Losses) Discontinued Benefit Hedging