Voya Financial, Inc. (NYSE: VOYA), a leading health, wealth and
investment company, announced today its third-quarter 2023
financial results:
- Net income available to common shareholders of $2.29 per
diluted share.
- After-tax adjusted operating earnings1 of $1.74 per diluted
share (EPS), which reflects the continued benefit of Voya's
diversified revenue streams and strong margins.
- Strong cash generation and balanced excess capital return:
- Approximately $0.3 billion in excess capital deployed in
third-quarter 2023, including $140 million in debt redemption;
approximately $50 million to acquire interest in India joint
venture; and $96 million in share repurchases and common stock
dividends.
- Approximately $0.8 billion of excess capital generated during
the trailing 12 months (TTM) ended Sept. 30, 2023.
- As of Sept. 30, 2023, Voya had approximately $0.4 billion of
excess capital, reflecting capital generation of over 90% of
after-tax adjusted operating earnings in third-quarter 2023 and for
the TTM ended Sept. 30, 2023.
"In the third quarter of 2023, we continued to execute on our
strategic priorities and delivered $1.74 per diluted share of
after-tax adjusted operating EPS, which reflects the benefit of our
diversified revenue streams and prudent expense management," said
Heather Lavallee, chief executive officer, Voya Financial. "During
the quarter, we drove further commercial momentum in each of our
businesses; we maintained a strong focus on margins; and we
deployed further excess capital generated by our high
free-cash-flow businesses. Despite macroeconomic headwinds, we
continue to execute on our strategy and — as a result of our strong
client relationships and engagement — we are confident in our
ability to continue to drive commercial momentum, while also
closely managing spending and prudently deploying capital. These
elements give us confidence in our Investor Day target of 12% to
17% EPS growth through the three-year period ending in 2024.
"Underpinning our accomplishments are our purpose and vision,
which we activate by serving the needs of our clients, as well as
supporting our colleagues and our communities. For example, in the
third quarter, we expanded our critical illness and accident
insurance products to offer new benefits and coverage that focus on
mental health; we earned further recognition as a best place to
work; and Voya employees positively impacted our communities by
raising more than $1.5 million for 1,900 charitable causes through
our annual Employee Giving Campaign," added Lavallee.
________________________
1 This press release includes certain
non-GAAP financial measures, including adjusted operating earnings.
More information on notable items in the company’s financial
results, non-GAAP measures, and reconciliations to the most
comparable U.S. GAAP measures can be found in the reconciliation
tables at the end of this press release and in the “Non-GAAP
Financial Measures” section of the company’s Quarterly Investor
Supplement, which is available at investors.voya.com.
Consolidated Results
Third-quarter 2023 net income available to common shareholders
was $248 million, or $2.29 per diluted share, compared with $166
million, or $1.57 per diluted share, in third-quarter 2022. The
increase was primarily due to gains within businesses exited, net
investment gains and lower acquisition and integration costs,
partially offset by lower after-tax adjusted operating
earnings.
Third-quarter 2023 after-tax adjusted operating earnings were
$189 million, or $1.74 per diluted share, compared with $210
million, or $1.97 per diluted share, in third-quarter 2022. The
decrease was largely due to lower net underwriting results,
partially offset by higher fee income.
Business Segment Results
Wealth Solutions
Wealth Solutions third-quarter 2023 pre-tax adjusted operating
earnings were $179 million, up from $128 million in the prior-year
period. The increase was primarily due to higher alternative
investment income as well as favorable equity market impacts to
fee-based margins — all partially offset by lower investment
spreads.
For the TTM ended Sept. 30, 2023, full-service recurring
deposits grew 10.2% to $14.4 billion compared with the prior-year
period, largely due to growth in Corporate markets. Total client
assets as of Sept. 30, 2023, were $510 billion, up 12% compared
with Sept. 30, 2022, due to growth in the business and higher
equity market levels year over year.
Excluding notables, net revenues for the TTM ended Sept. 30,
2023, grew 1.4% compared with the prior-year period as an increase
in spread-based revenues more than offset a decline in fee-based
margins. Adjusted operating margin for the TTM ended Sept. 30,
2023, excluding notables, was 37.8%, compared with 37.9% in the
prior-year period.
Health Solutions
Health Solutions third-quarter 2023 pre-tax adjusted operating
earnings were $53 million, down from $154 million in the prior-year
period. The decline was largely attributable to the prior-year
period benefiting from exceptionally strong underwriting results
and a favorable reserve adjustment.
Health Solutions third-quarter 2023 annualized in-force premiums
and fees grew 21.1% to $3.3 billion compared with the prior-year
period. The increase reflects growth across all product lines,
favorable retention and the positive impact of the Benefitfocus
acquisition, which closed in January 2023. Excluding Benefitfocus,
annualized in-force premiums and fees grew 14.7% compared with the
prior-year period.
Excluding notables, net revenues for the TTM ended Sept. 30,
2023, grew 35.8% compared with the prior-year period due to the
Benefitfocus acquisition, premium growth across all product lines
and a favorable aggregate loss ratio. (Excluding Benefitfocus, net
revenues, excluding notables, grew 17.7%.) Adjusted operating
margin for the TTM ended Sept. 30, 2023, excluding notables, was
32.2%, compared with 31.2% in the prior-year period.
Investment Management
Investment Management third-quarter 2023 pre-tax adjusted
operating earnings, excluding Allianz's noncontrolling interest,
were $49 million, up from $38 million in the prior-year period. The
increase was largely due to higher fee revenues resulting from the
Allianz Global Investors (AllianzGI) transaction, which closed in
July 2022, and positive investment capital returns.
Investment Management had net outflows (excluding divested
businesses) of $8.4 billion during the TTM ended Sept. 30, 2023 —
positive Retail net flows and momentum resulting from the company's
international distribution through AllianzGI were more than offset
by macroeconomic headwinds impacting the industry and the unwinding
of the company's former international distribution partnership.
Excluding notables, net revenues for the TTM ended Sept. 30,
2023, grew 21.8% as additional revenues from the AllianzGI
transaction more than offset the impact of macroeconomic headwinds
on both equity and fixed income fees, particularly in Retail.
Adjusted operating margin for the TTM ended Sept. 30, 2023,
excluding notables, was 25.5%, compared with 26.0% in the
prior-year period.
Additional Financial Information and Earnings Call
More detailed financial information can be found in the
company’s quarterly investor supplement, which is available on
Voya’s investor relations website, investors.voya.com. In addition,
Voya will host a conference call on Wednesday, Nov. 1, 2023, at 10
a.m. ET, to discuss the company’s third-quarter 2023 results. The
call and slide presentation can be accessed via the company’s
investor relations website at investors.voya.com. A replay of the
call will be available on the company’s investor relations website,
investors.voya.com starting at 1 p.m. ET on Nov. 1, 2023.
About Voya Financial
Voya Financial, Inc. (NYSE: VOYA), is a leading health, wealth
and investment company with approximately 9,000 employees who are
focused on achieving Voya’s aspirational vision: Clearing your path
to financial confidence and a more fulfilling life. Through
products, solutions and technologies, Voya helps its 14.7 million
individual, workplace and institutional clients become well
planned, well invested and well protected. Benefitfocus, a Voya
company, extends the reach of Voya’s workplace benefits and savings
offerings by providing benefits administration capabilities to 16.5
million individual subscription employees across employer and
health plan clients. Certified as a “Great Place to Work” by the
Great Place to Work® Institute, Voya is purpose-driven and
committed to conducting business in a way that is economically,
ethically, socially and environmentally responsible. Voya has
earned recognition as: one of the World’s Most Ethical Companies®
by Ethisphere; a member of the Bloomberg Gender-Equality Index; and
a “Best Place to Work for Disability Inclusion” on the Disability
Equality Index. For more information, visit voya.com. Follow Voya
Financial on Facebook, LinkedIn and Instagram.
Forward-Looking and Other Cautionary
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. 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 statements include
statements relating to future developments in our business or
expectations for our future financial performance and any statement
not involving a historical fact. Forward-looking statements use
words such as “anticipate,” “believe,” “estimate,” “expect,”
“intend,” “plan,” and other words and terms of similar meaning in
connection with a discussion of future operating or financial
performance. Actual results, performance or events may differ
materially from those projected in any forward-looking statement
due to, among other things, (i) general economic conditions,
particularly economic conditions in our core markets, (ii)
performance of financial markets, (iii) interest rates, (iv) the
frequency and severity of insured loss events, (v) the effects of
natural or man-made disasters, including pandemic events, (vi)
mortality and morbidity levels, (vii) persistency and lapse levels,
(viii) currency exchange rates, (ix) general competitive factors,
(x) changes in laws and regulations, such as those relating to
Federal taxation, state insurance regulations and NAIC regulations
and guidelines, (xi) changes in the policies of governments and/or
regulatory authorities, (xii) our ability to successfully manage
the separation of the Individual Life business that we sold to
Resolution Life US on Jan. 4, 2021, and (xiii) our ability to
realize the expected benefits from acquisitions, including the
transactions with AllianzGI and Benefitfocus. Factors that may
cause actual results to differ from those in any forward-looking
statement also include those described under “Risk Factors” and
“Management’s Discussion and Analysis of Results of Operations and
Financial Condition – Trends and Uncertainties” in our Annual
Report on Form 10-K for the year ended Dec. 31, 2022, as filed with
the Securities and Exchange Commission (“SEC”) on Feb. 24, 2023,
and in our Quarterly Report on Form 10-Q for the three months ended
Sept. 30, 2023, to be filed with the SEC on or before Nov. 9,
2023.
VOYA-IR VOYA-CF
Reconciliation of Net Income
(Loss) to Adjusted Operating Earnings and Earnings Per Share
(Diluted)
Three Months Ended
($ in millions, except per share)
9/30/2023
9/30/2022
After-tax (1)
Per share
After-tax (1)
Per share
Net Income (loss) available to Voya
Financial, Inc.'s common shareholders
$
248
$
2.29
$
166
$
1.57
Less:
Net investment gains (losses) (2)
43
0.40
(7
)
(0.06
)
Income (loss) related to businesses exited
or to be exited through reinsurance or divestment (3)
38
0.35
(11
)
(0.10
)
Other adjustments
(21
)
(0.19
)
(26
)
(0.24
)
Adjusted operating earnings
$
189
$
1.74
$
210
$
1.97
Less:
Alternative investment income and
prepayment fees above (below) long-term expectations net of
variable and incentive compensation
(23
)
(0.21
)
(74
)
(0.70
)
Other (4)
(13
)
(0.12
)
45
0.42
Adjusted operating earnings excluding
notable items
$
224
$
2.07
$
239
$
2.24
(1) For adjusted operating earnings, we
apply a 21% tax rate and adjust for the dividends received
deduction, tax credits, non-deductible compensation, and other tax
benefits and expenses that relate to adjusted operating earnings.
For net investment gains (losses), income (loss) related to
businesses exited, and other non-operating items, we apply a 21%
tax rate and adjust for related tax benefits and expenses,
including changes to tax valuation allowances and impacts related
to changes in tax law.
(2) Net investment gains include a $45
million revaluation gain on the Voya India investment for the three
months ended September 30, 2023. There was no tax expense
associated with this gain.
(3) Income related to businesses exited or
to be exited through reinsurance or divestment includes a one-time
tax benefit of $92 million related to a divested business for the
three months ended September 30, 2023.
(4) Includes changes in certain legal and
other reserves not expected to recur at the same level.
Adjusted Operating Earnings
and Notable Items
Three Months Ended September
30, 2023
(in millions)
Amounts Including
Notable Items
Investment Income Net of
Variable and Incentive Compensation Above (Below) Expectations
(1)
Other (2)
Amounts Excluding
Notable Items
a
b
c
d = a - b - c
Adjusted operating earnings
Wealth Solutions
$
179
$
(24
)
$
—
$
202
Health Solutions
53
(2
)
(16
)
71
Investment Management
63
(3
)
—
66
Corporate
(52
)
—
—
(52
)
Adjusted operating earnings before
income taxes, including Allianz noncontrolling interest
242
(29
)
(16
)
287
Less: Earnings (loss) attributable to
Allianz noncontrolling interest
14
—
—
14
Adjusted operating earnings before
income taxes
229
(29
)
(16
)
273
Income taxes (3)
39
(6
)
(3
)
49
Adjusted operating earnings after
income taxes
$
189
$
(23
)
$
(13
)
$
224
Adjusted operating earnings per
share
1.74
(0.21
)
(0.12
)
2.07
(1) The amount by which Investment income
from alternative investments and prepayments exceeds or is less
than our long-term expectations, net of variable and incentive
compensation. Long-term expectation for alternative investments is
a 9% annual return and the long-term expectation for prepayment
fees is a 10 basis point annual contribution to yield, which is
roughly $9 million per quarter for Wealth Solutions.
(2) Includes changes in certain legal and
other reserves not expected to recur at the same level.
(3) For adjusted operating earnings, we
apply a 21% tax rate and adjust for the dividends received
deduction, tax credits, non-deductible compensation, and other tax
benefits and expenses that relate to adjusted operating
earnings.
Net Revenue, Adjusted
Operating Margin, and Notable Items
Twelve Months Ended September
30, 2023
(in millions)
Amounts Including Notable
Items
Investment Income Net of
Variable and Incentive Compensation Above (Below) Expectations
(1)
Other (2)
Amounts Excluding Notable
Items
a
b
c
d = a - b - c
Net revenue
Wealth Solutions
$
1,864
$
(121
)
$
—
$
1,985
Health Solutions
1,137
(9
)
(16
)
1,165
Investment Management
903
(9
)
—
912
Total net revenue
$
3,904
$
(139
)
$
(16
)
$
4,061
Adjusted operating margin
Wealth Solutions
33.8
%
(4.0
)%
—
37.8
%
Health Solutions
30.6
%
(0.6
)%
(1.0
)%
32.2
%
Investment Management
24.9
%
(0.6
)%
—
25.5
%
Adjusted operating margin, excluding
Corporate
30.8
%
(2.4
)%
(0.2
)%
33.4
%
(1) The amount by which Investment income
from alternative investments and prepayments exceeds or is less
than our long-term expectations. Long-term expectation for
alternative investments is a 9% annual return and the long-term
expectation for prepayment fees is a 10 basis point annual
contribution to yield, which is roughly $9 million per quarter for
Wealth Solutions.
(2) Includes changes in certain legal and
other reserves not expected to recur at the same level.
Net Revenue, Adjusted
Operating Margin, and Notable Items
Twelve Months Ended September
30, 2022
(in millions)
Amounts Including Notable
Items
Investment Income Net of
Variable and Incentive Compensation Above (Below) Expectations
(1)
COVID-19 Impacts
Other (2)
Amounts Excluding Notable
Items
a
b
c
d
e = a - b - c - d
Net revenue
Wealth Solutions
$
2,015
$
57
$
—
$
—
$
1,958
Health Solutions
848
7
(74
)
57
858
Investment Management
742
(8
)
—
—
749
Total net revenue
$
3,604
$
56
$
(74
)
$
57
$
3,565
Adjusted operating margin
Wealth Solutions
39.6
%
1.7
%
—
—
%
37.9
%
Health Solutions
30.3
%
0.5
%
(5.7
)%
4.3
%
31.2
%
Investment Management
25.5
%
(0.5
)%
—
—
26.0
%
Adjusted operating margin, excluding
Corporate
34.5
%
1.1
%
(1.4
)%
1.1
%
33.7
%
(1) The amount by which Investment income
from alternative investments and prepayments exceeds or is less
than our long-term expectations. Long-term expectation for
alternative investments is a 9% annual return and the long-term
expectation for prepayment fees is a 10 basis point annual
contribution to yield, which is roughly $9 million per quarter for
Wealth Solutions.
(2) Includes changes in certain other
reserves not expected to recur at the same level.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231031018956/en/
Media Contact: Christopher Breslin 212-309-8941
Christopher.Breslin@voya.com
Investor Contact: Michael Katz 212-309-8999
IR@voya.com
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