Voya Financial Fourth Quarter 2022 Investor Presentation February 8, 2023 - Seeking Alpha
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Voya Financial Fourth Quarter 2022 Investor Presentation February 8, 2023
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 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) the frequency and severity of insured loss events, (iv) the effects of natural or man-made disasters, including pandemic
events and specifically the current COVID-19 pandemic event, (v) mortality and morbidity levels, (vi) persistency and lapse levels, (vii)
interest rates, (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 January 4, 2021, including the transition services on the expected timeline and economic terms, and (xiii) our ability to realize the
expected benefits from various acquisitions, including the transactions with Allianz Global Investors U.S. LLC (“AllianzGI”) and
Benefitfocus Inc. 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 (“MD&A”) – Trends
and Uncertainties” in our Annual Report on Form 10-K for the year ended December 31, 2022, which the company expects to file with
the Securities and Exchange Commission (“SEC”) on or before March 1, 2023.
This presentation and the remarks made orally contain certain non-GAAP financial measures. Non-GAAP measures include Adjusted
Operating Earnings, Adjusted Operating Earnings Per Share, Adjusted Operating Margin, and Financial Leverage. Information regarding
these and other non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, is
provided in our quarterly earnings press releases and in our quarterly investor supplements, all of which are available at the Investor
Relations section of Voya Financial’s website at investors.voya.com.
2
Agenda
1. Opening Remarks
■ Heather Lavallee, Chief Executive Officer
■ Rod Martin, Executive Chairman
2. Key Themes & Executing on our Strategy
■ Heather Lavallee, Chief Executive Officer
3. Business Segment Performance and
Financial Highlights
■ Don Templin, Chief Financial Officer
3
Completed CEO Transition, Focused on Execution of Strategy
and Building on a Track Record of Success
2013 - 2022 2023 +
▪ Divested capital-intensive businesses, focused on profitable growth
across Workplace Solutions and Investment Management
▪ High free cash flow generation positions Voya well to build on track
record of capital return to shareholders
▪ Transformative M&A in 2022 consistent with the Investor Day strategy;
focus is on integration, execution, and delivery
▪ Experienced management team with track record of navigating
challenges and achieving results
4Agenda
1. Opening Remarks
■ Heather Lavallee, Chief Executive Officer
■ Rod Martin, Executive Chairman
2. Key Themes & Executing on our Strategy
■ Heather Lavallee, Chief Executive Officer
3. Business Segment Performance and
Financial Highlights
■ Don Templin, Chief Financial Officer
5Key Themes
■ 4Q’22 adjusted operating earnings per share of $2.18
2022 EPS Growth ■ 4Q’22 adjusted operating earnings per share, ex notables1, of $2.05, representing 31%
Of 24% Exceeded growth on 4Q’21
Full Year Target of ■ Full Year adjusted operating earnings per share of $7.58
12-17% ■ Full Year adjusted operating earnings per share, ex notables1, of $7.41, representing 24%
growth on 2021
■ Wealth Solutions generated positive Full-Service net flows of $952 million in 4Q’22, and record
net flows of $3.0 billion in Full Year 2022
Commercial ■ Full Service recurring deposits grew 10.3% year-over-year, to $13.3 billion
Momentum Across All ■ Health Solutions’ annualized in-force premiums grew 10.8% year-over-year to $2.8 billion
■ Investment Management generated positive net flows of $147 million in 4Q’22, contributing to
Business Lines
net flows of $1.1 billion in Full Year 2022, representing 0.5% of positive organic growth
■ Seven consecutive years of overall positive net flows
■ $1.2 billion of capital deployed2 in 2022, across:
■ $750 million of shares repurchased
■ $360 million of debt extinguished
Disciplined and
■ $80 million of dividends paid
Balanced Capital ■ Organically generated over $600 million of excess capital in 2022, within our 90 – 100% free
Management cash flow conversion target3
■ Excess capital4 of $0.9 billion as of 12/31/22
■ Resuming share repurchase activity in 2Q’23 assuming market conditions remain constructive
1. Adjusted Operating Earnings as presented is a non-GAAP measure. Information regarding this non-GAAP financial measure, and a reconciliation to most comparable U.S. GAAP measure, is provided in the “Reconciliations”
section of the Quarterly Investor Supplement. Excludes notable items and AllianzGI Non-Controlling Interest, see Appendix pages 22 and 23 for reconciliation.
2. Includes capital deployed in consideration of Czech Asset Management, which closed on 11/1/2022
3. Free cash flow conversion defined as capital generated as a % of Adjusted Operating Earnings after tax excluding impacts from the company’s annual assumption update, DAC unlocking, and fourth-quarter tax adjustments,
in each case, which are non-cash in nature.
4. Excess Capital is defined as Statutory Total Adjusted Capital (TAC) in excess of 375% RBC level, net of any outstanding loans, and Holding Company Liquidity in excess of required liquidity. Holding Company Liquidity
includes cash, cash equivalents, short term investments, and short term loans with non-insurance subsidiaries, held at Voya Financial Inc. and Voya Holdings Inc., and Voya Investment Management tangible net capital in
excess of target. Includes capital of $0.6 billion marked for Benefitfocus transaction.
6AllianzGI Acquisition and International Distribution
Partnership Outperforming Expectations
Expands Distribution, Diversifies Revenues, Increases
Capabilities in Key Asset Classes, & Enhances Earnings Growth
■ Significantly diversified our asset management business, transforming Voya into a
Strategic global provider of attractive, sought-after asset classes to institutional and retail clients
Rationale
■ Distribution partnership allows Voya to capitalize on AllianzGI’s extensive international
footprint
■ Rapid and effective execution in demanding circumstances allowed us to deliver
Execution & a highly attractive transaction
Delivery
■ Achieved 95% client asset retention while increasing Voya’s AUM by $90 billion1
■ Revenue and earnings performance exceeding expectations
Financial
■ Positive flows of $1.4 billion2 in 2022
Highlights
■ Added significant long-term value to Voya IM
1. AUM as September 30, 2022
2. YTD 2022 since transaction closed in July 2022
7Benefitfocus Accelerates Voya’s Workplace Strategy
Capabilities to Connect Workplace Health & Wealth and
Deliver Best-in-Class User Experience
■ Benefits administration capabilities that will allow Voya to deliver a market-leading
workplace benefits and savings solution
Strategic ■ Through innovative technology and access to data, enables Voya to provide an easier
Rationale and more effective process for selecting benefits
■ Longer-term, opens access to attractive market opportunities connected to workplace
health
■ Added more than 1,000 Benefitfocus employees to the Voya family, including
dedicated distribution, client service, and technology teams
Execution &
Delivery ■ Both organizations are mobilized and executing on a detailed integration plan
designed to fully capitalize on strategic and financial opportunities
■ Voya’s technology resources, digital capabilities, and operational expertise expected
Financial to drive considerable synergies
Highlights ■ Expected to generate approximately $50 million of EBITDA1 in 2023, including
expense synergies
1. EBITDA is a Non-GAAP financial measure and reflects income before net interest, taxes, and depreciation and amortization expense, adjusted to eliminate certain stock-based compensation; transaction and
acquisition-related costs expensed; and restructuring costs.
8Our Culture and the Character of Our Brand Are a
Differentiator
Recognized by Newsweek as one Named to the 2022 Dow Jones Recognized by Bloomberg’s
of “America’s Greatest Sustainability Index – earning Gender Equality Index for the 8th
Workplaces 2023 for Diversity” recognition for the consecutive year
7th consecutive year
Voya Investment Management named Earned Corporate Secretary’s Earned Mansfield Rule:
to P&I Magazine’s “2022 Best Places to 2022 Corporate Governance Legal Department Edition:
Work in Money Management” list for Award for Best Proxy Statement 2.0 Certification
the 8th consecutive year (mid-cap category)
9Agenda
1. Opening Remarks
■ Heather Lavallee, Chief Executive Officer
■ Rod Martin, Executive Chairman
2. Key Themes & Executing on our Strategy
■ Heather Lavallee, Chief Executive Officer
3. Business Segment Performance and
Financial Highlights
■ Don Templin, Chief Financial Officer
10Fourth Quarter and Full Year 2022 Financial Results
After-tax Adjusted Operating Net Income (Loss) Available to
Earnings Per Share¹ Common Shareholders
4Q’22 FY’22 4Q’22 FY’22
$2.18 $7.58 $190 $474
per diluted share per diluted share million million
4Q’22 Notable Items FY’22 4Q’22 Includes FY’22
■ Net alternative investment income
(0.47) and prepayment fees below our long- (0.76) $233M ■ Adjusted operating earnings $835M
term expectations2
■ DAC/VOBA and other intangibles ■ Losses related to businesses
0.10 unlocking 0.32 (24) exited5 (111)
0.50 ■ Other Notable Items4 0.62 (20) ■ Other3 (250)
1. Adjusted Operating Earnings as presented is a non-GAAP measure. Information regarding this non-GAAP financial measure, and a reconciliation to most comparable U.S. GAAP measure, is provided in the
“Reconciliations” section of the Quarterly Investor Supplement.
2. Net of Variable Compensation
3. Other primarily includes Investment gains (losses), Allianz related transaction and integration costs and other restructuring costs; refer to Adjusted Operating Earnings reconciliation on page 24 in Appendix for a full
breakdown.
4. Other Notable Items include DAC unlocking in Wealth, 1Q Covid impacts in Health, 3Q reserve release in Health, and 4Q tax adjustment primarily related to foreign tax credits.
5. Losses related to businesses exited includes amortization of intangibles, DAC unlocking driven by interest rates, a 2Q legal accrual, and CECL adjustments on the reinsurance recoverable.
11Wealth Solutions – Diverse business mix and revenue
streams have driven results in various business cycles
Adjusted Operating Earnings1 ($ millions) Full Service Client Assets ($ billions)
Current Quarter TTM Spread-based Fee-based
$188
$1,110 $163
$153
$707
$155
Record Full-Service $119 $129
Net Flows in FY’22
Includes Alternative Income $241 $148 $33 $34 $34
and Prepayments
Above/(Below) Expectations2 4Q'21 4Q'22 Full Service ($ m) 4Q'21 3Q’22 4Q'22
Current Quarter $82 $(50) Recurring Deposits, TTM $12,056 $13,042 $13,294
TTM 406 (76)
Net Flows, TTM 576 1,117 2,953
DAC/VOBA and Other
Intangibles Unlocking Client Assets ($ b)
Current Quarter $1 $14 Total Client Assets 536 451 474
TTM 29 44
4Q’22 Adjusted Operating Margin YoY TTM Net Revenue Growth, YoY TTM Full Service Recurring
37.5% TTM, ex-notables3
2.8% ex-notables3
10.3% Deposits Growth, to $13 billion
2022 Target: 34 – 36% 2022 Target: 2 – 4% 2022 Target: 10 – 12%
1. Adjusted Operating Earnings as presented is a non-GAAP measure. Information regarding this non-GAAP financial measure, and a reconciliation to most comparable U.S. GAAP measure, is provided in the “Reconciliations”
section of the Quarterly Investor Supplement. Includes other notable items, refer to pages 22 & 23 of this presentation for more detail.
2. Alternative income and prepayments above/(below) expectations are pre-tax and pre-DAC.
3. Excludes notable items (excess alts/prepays, DAC unlocking) listed on pages 22 & 23 of this presentation.
12Health Solutions – Continuing diverse growth in revenue and
premiums while maintaining strong pricing discipline
Adjusted Operating Earnings1 ($ millions) Annualized In-Force Premiums ($ millions)
Voluntary Stop Loss Group Life & Disability
Current Quarter TTM
$291 $2,760 $2,780
$2,510
$817 $833
$204 $752
$1,259 $1,258
$1,181
Includes Alternative Income $74 $576 $684 $689
$33
and Prepayments
Above/(Below) Expectations2 4Q'21 4Q'22 Loss Ratios 4Q'21 3Q’22 4Q'22
Current Quarter $9 $(5) Total Aggregate, TTM3 72.5% 71.1% 69.4%
TTM 41 (7)
YoY Annualized In-Force
Includes Reserve Release4 Premium Growth
Total 10.0% 9.7% 10.8%
TTM $16 $59
4Q’22 Adjusted Operating Margin YoY TTM Net Revenue Growth, 230bps YoY Annualized In-Force
31.9% TTM, ex-notables5
12.8% 10.8% Premium Growth
ex-notables5
2022 Target: 27 – 33% 2022 Target: 7 – 10% 2022 Target: 7 – 10%
1. Adjusted Operating Earnings as presented is a non-GAAP measure. Information regarding this non-GAAP financial measure, and a reconciliation to most comparable U.S. GAAP measure, is provided in the “Reconciliations”
section of the Quarterly Investor Supplement. Includes other notable items, refer to pages 22 & 23 of this presentation for more detail.
2. Alternative income and prepayments above/(below) expectations are pre-tax and pre-DAC.
3. Includes Stop Loss, Group Life & Disability, and Voluntary. Excludes the impact of the 3Q’22 reserve release; including the impact, Total 3Q’22 Agg. Loss Ratio, TTM = 68.6%; Total 4Q’22 Agg. Loss Ratio, TTM = 67%,
4. Change in reserves primarily driven by the annual assumption update which is not expected to repeat
5. Excludes notable items (COVID-19 impact, excess alts/prepays, DAC unlocking, and reserve release) listed on pages 22 & 23 of this presentation.
13Investment Management – Scaled and diverse platform
across geographies, asset classes, and client mix
Adjusted Operating Earnings1 ($ millions) Assets Under Management ($ billions)
Current Quarter TTM Privates and Alternatives Equity Fixed Income - Public & Other 2
$317 $321
$239
$264
$158 $140 $138
$121
$80 $83
$63
$59 $80 $97 $100
Includes Alternative Income $42
and Prepayments
Above/(Below) Expectations3 4Q'21 4Q'22 Net Flows, TTM4 ($b) 4Q'21 3Q’22 4Q'22
Current Quarter $12 $(9) Institutional4 $9.1 $12.8 $3.7
TTM 75 (29) Retail (1.3) (2.9) (2.6)
Excludes AllianzGI Non- Total Net Flows $7.8 $9.9 $1.1
Controlling Interest
Organic Growth, TTM4,5
Current Quarter - $14
Total 4.2% 4.6% 0.5%
TTM - 27
4Q’22 Adjusted Operating Margin YoY TTM Net Revenue Growth, 4Q’22 Organic Growth,
26.8% TTM, ex-notables6 11.0% ex-notables6 0.5% TTM4,5
1%+ Margin Expansion per year 2022 Target: 5 – 7% Target: 2 – 4%
1. Adjusted Operating Earnings as presented is a non-GAAP measure. Information regarding this non-GAAP financial measure, and a reconciliation to most comparable U.S. GAAP measure, is provided in the “Reconciliations”
section of the Quarterly Investor Supplement. Includes other notable items, refer to pages 22 & 23 of this presentation for more detail.
2. Includes Money Market: $2.0 billion in 4Q'21, $2.1 billion in 3Q’22 and $2.5 billion in 4Q'22
3. Alternative income and prepayments above/(below) expectations are pre-tax and pre-variable compensation.
4. Excludes net flows from divested businesses and sub-advisor replacement.
5. AUM Organic Growth represents Net Flows as a % of Beginning Period Commercial AUM (includes net flows related to Allianz transaction as of July 25, 2022, excludes General Account and Market Appreciation).
6. Excludes notable items (excess alts/prepays and other items) listed on pages 22 & 23 of this presentation.
14Balanced and Disciplined Capital Return
Debt Extinguishment
Estimated Excess Capital1 as of 12/31/22
$360 million
$0.9 billion
Estimated Combined Adjusted
RBC Ratio2 $1.2 billion
FY’22 Capital Deployed
488% Dividends
Target 375%
$80 million
Financial Leverage Ratio
New: Financial
Leverage Ratio
29.9% Share Repurchases
Target 25 – 30% $750 million
ex AOCI3
1. Excess Capital is defined as Statutory Total Adjusted Capital (TAC) in excess of 375% RBC level, net of any outstanding loans, and Holding Company Liquidity in excess of required liquidity. Holding Company Liquidity
includes cash, cash equivalents, short term investments, and short term loans with non-insurance subsidiaries, held at Voya Financial Inc. and Voya Holdings Inc., and Voya Investment Management tangible net capital
in excess of target. Includes capital of $.6 billion marked for Benefitfocus transaction.
2. Estimated combined adjusted RBC ratio primarily for our principal U.S. insurance subsidiaries, net of any outstanding loans. Subject to change based on our final Statutory financial statements that will be available at the
end of February.
3. Financial Leverage Ratio is defined as total financial obligations (short and long term debt, leases, and after-tax net pension liabilities) plus preferred stock divided by the sum of total financial obligations and Total
Shareholders’ Equity (including NCI) excluding AOCI; see page 13 of the fourth quarter investor supplement for further details.
15Executing Above Expectations - Adjusted EPS ex notables
Trending Higher than Targets
2023
10%+ Expected Adjusted EPS
Growth
With a path to 12-17% EPS
growth including Benefitfocus
2022
24% Adjusted EPS1
Growth $7.41
12 – 17%
Annual Adjusted EPS1 Growth
$5.991 2021 Investor Day
2021A 2022A 2023 2024
1. Adjusted Operating Earnings per share ex notables, ex AllianzGI non-controlling interest
16Voya Focused on Execution of Strategy and Building on a
Track Record of Success
1 2022 EPS Growth of 24% exceeded target of 12-17%
2 Commercial Momentum Across All Business
Lines
3 Disciplined and Balanced Capital Management
17Appendix
18Achieving Investor Day Targets in 2022
Investor Day 2022
Metric1 Result
Target Actual
Annual EPS growth 12-17% 23.7% ✓
Consolidated
Free cash flow conversion 90-100% 90%+2 ✓
Net revenue growth 2-4% 2.8% ✓
Wealth Solutions Adjusted operating margin 34-36% 37.5% ✓
Full Service recurring deposits growth 10-12% 10.3% ✓
Net revenue growth 7-10% 12.8% ✓
Health Solutions Adjusted operating margin 27-33% 31.9% ✓
In-force premium growth 7-10% 10.8% ✓
Net revenue growth 5-7% 11.0% ✓
Investment 1% growth per year
Adjusted operating margin 26.8%
Management to 29% in 2024
Organic net flow growth3 2-4% 0.5%
1. Excluding notable items (refer to pages 22 and 23 of this presentation for more detail)
2. Excludes one-time non-cash items; DAC Unlocking, Health reserve release in 3Q’22, and Notable tax impact in 4Q
3. Net Flows as % of Beginning of Period External Client AUM, excludes General Account and Market Appreciation
19Seasonality of Financial Items Note: Teal font denotes change from 3Q’22.
1Q 2Q 3Q 4Q
■ Corporate Markets tends to have ■ 91 fee and crediting interest ■ Education Tax-Exempt Markets ■ Corporate Markets typically see
Wealth Solutions
the highest recurring deposits days in quarter typically see lowest recurring highest transfer / single deposits
deposits
■ Withdrawals also tend to increase ■ Withdrawals also tend to increase
■ 92 fee and crediting interest
■ 90 fee and crediting interest days ■ Recurring deposits in Corporate
days in quarter
in quarter (91 in leap years, e.g. Markets tend to be lower
2020)
■ 92 fee and crediting interest days
in quarter
■ Group Life loss ratio tends to be ■ Sales tend to be second highest
Solutions
Health
highest
■ Sales tend to be the highest
■ Performance fees tend to be
Management
Investment
highest
■ Seasonally higher preferred ■ Seasonally lower preferred ■ Seasonally higher preferred ■ Seasonally lower preferred
Corporate
dividend dividend dividend dividend
■ Admin expenses tend to be the ■ Admin Expenses tend to be
highest: elevated relative to 2Q and 3Q
All Segments
due to seasonal brand spend
▪ Payroll taxes and long-term
incentive awards tend to be
highest and steadily decline
over remaining quarters
▪ Other annual expenses are
concentrated in 1Q
20Analyst Modeling Considerations Note: Teal font denotes change from 3Q’22.
Prepayment & ■ Long-term prepayment and other investment fee income, quarterly expectation in 2023 (pre-tax, pre-DAC): $9 million for Wealth Solutions
Alt. Income ■ Approximately 9% annual long-term expected returns (pre-tax, pre-DAC) for alternative income
■ 2023 adjusted operating margin target of 34 – 36% (ex-notables)
Wealth ■ 1Q’23 Investment spread and other investment income, excluding alts/prepays
■ 2023 net revenue growth target, ex-notables of 2 – 4%
Solutions above /below expectations, expected to be in-line with 4Q’22
■ 2023 Full Service recurring deposits growth target of 10 – 12%
■ 2023 adjusted operating margin target of 27 – 33% (ex-notables)
Health ■ Total aggregate loss ratio on a trailing twelve-month basis underwritten to an
■ 2023 net revenue growth target, ex-notables of 7 – 10%
Solutions annual range of 70 – 73%1
■ 2023 in-force premium growth target of 7 – 10%
Investment ■ 2023 net revenue growth target, ex-notables of 5 – 7%
Management ■ 2023 AUM organic growth rate target of 2 – 4%2
■ Beginning 1Q’23, the Company plans to update its definition of adjusted operating
■ Estimated $(65) – (75) million operating loss in 1Q’23
earnings to exclude amortization of acquisition-related intangible assets, which is a
Corporate ■ Non-cash impacts of $5-$10 million higher pension expense
non-cash item, and will be reported in non-operating. See details in Other below.
net of lower intangible amortization compared to 4Q’22
■ Preferred stock dividends paid: $14 million in 1Q and 3Q, $4 million in 2Q and 4Q
■ 8% equity market total return ■ 6% annual separate account return (equity/fixed blended rate)
Assumptions
■ Interest rates follow forward curve ■ 90%+ Free Cash Flow Conversion for FY’23
■ Wealth pre-tax adjusted operating earnings: ■ Investment Management pre-tax adjusted operating earnings:
■ +/- $40 to 50 million per +/- 10% S&P move ■ +/- $10 to 20 million per +/- 10% S&P move
Annual ■ +/- $25 to 35 million per +/- 100bps move in ■ -/+ $5 to 15 million per +/- 100bps move in yields/spreads
Sensitivities3 yields/spreads ■ Investment Management adjusted operating margin sensitivity
■ +/- 75bps per +/- 10% S&P move
■ -/+ 50bps per +/- 100bps move in yields/spreads
Tax Rate ■ 16 – 19% effective tax rate on adjusted operating earnings for 2023; assumes alternative income in-line with expectations at ~9%
■ Favorable 3-5% impact to Wealth Adjusted Operating Earnings from LDTI, due to lower expected DAC Amortization, compared to reported 2022
LDTI (excluding unlocking impacts, which are not applicable under LDTI)
■ As of September 30, 2022, estimated decline in Total Shareholders’ equity of $1.1 to 1.3 billion primarily through AOCI
■ With 1Q’23 earnings we plan to release a restated 4Q’22 financial supplement for LDTI impacts and two non-cash changes to our Non-GAAP definition of
Other adjusted operating earnings in our Corporate segment, related to amortization of acquisition-related intangible assets and pension expense. The net
impact of LDTI and these two non-GAAP changes to our 2022 adjusted operating EPS, excluding notables, is not expected to be material.
■ 26 million Warrants entitle holders to 27 million of underlying Voya shares, which can be exercised at $46.94 strike price4,5 and will automatically exercise
on 5/7/2023.
Warrants Sensitivity
Average Share Price Additional Shares Factoring into EPS (in Millions)5
Warrants 66.00 7.8
68.00 8.4
70.00 8.9
72.00 9.4
74.00 9.9
1. Inclusive of COVID-19 impact as shared. Any adverse deviations from our assumptions could lead to total aggregate loss ratios being outside of this range.
2. AUM Organic Growth represents Net Flows as a % of Beginning Period Commercial AUM (excludes General Account and Market Appreciation).
3. Wealth Management sensitivities are pre-tax, pre-DAC. Investment Management sensitivities is pre-tax, net of variable compensation
4. Exercise price of the warrants is subject to adjustment, including for stock dividends, and cash dividends in excess of $0.01 per share a quarter.
5. Exercise price of warrants adjusted on 12/30/2022, based on 4Q’22 cash dividend of $0.20 per share. Dilution effects include impact of adjusted strike price. Refer to the Quarterly Report on Form 10-Q for more information.
214Q'22 and 4Q'21 Notable Items Impacts
Prepays and Alt Income Adjusted Operating
Adjusted Operating Other
Above/(Below) Earnings (ex.
Earnings1 Notables3
4Q'22 Expectations2 notables)
Wealth Solutions $148 $(50) $14 $184
Health Solutions 74 (5) – 79
Investment Management 57 (7) – 64
Corporate (52) – – (52)
Adjusted Operating Earnings before income taxes, incl AllianzGI NCI $226 $(62) $14 $275
Less: AllianzGI NCI Earnings / (Loss) 13 – – 13
Adjusted Operating Earnings before income taxes $214 $(62) $14 $262
Income Taxes 33 (13) 3 44
Income Tax Credit4 (53) 53
Adjusted Operating Earnings after income taxes $233 $(50) $64 $219
Adjusted Operating Earnings Per Share (EPS) $2.18 $(0.47) $0.60 $2.05
4Q'21
Wealth Solutions $241 $82 $1 $158
Health Solutions 33 9 (34) 58
Investment Management 59 9 – 49
Corporate (54) (16) – (38)
Adjusted Operating Earnings before income taxes $279 $84 $(33) $227
Income Taxes 50 18 (7) 39
Adjusted Operating Earnings after income taxes $229 $66 $(26) $188
Adjusted Operating Earnings Per Share (EPS) $1.90 $0.55 $(0.22) $1.57
YoY EPS Growth 16% 31%
1. Adjusted Operating Earnings as presented is a non-GAAP measure. Information regarding this non-GAAP financial measure, and a reconciliation to most comparable U.S. GAAP measure, is provided in the “Reconciliations”
section of the Quarterly Investor Supplement.
2. Net of Variable Compensation. Alternative income and prepayments above/(below) expectations are pre-tax and pre-DAC.
3. 4Q’22 Other notables include DAC unlocking in Wealth. 4Q’21 Other notables include DAC unlocking in Wealth and COVID-19 impacts in Health.
4. Favorable 4Q’22 tax adjustment primarily related to foreign tax credits
22FY'22 and FY'21 Notable Items Impacts
Prepays and Alt Income Adjusted Operating
Adjusted Operating Other
Above/(Below) Earnings (ex.
Earnings1 Notables3
FY’22 Expectations2 notables)
Wealth Solutions $707 $(76) $44 $738
Health Solutions 291 (7) 18 280
Investment Management 186 (24) – 210
Corporate (215) – – (215)
Adjusted Operating Earnings before income taxes, incl AllianzGI NCI $969 $(107) $63 $1,012
Less: AllianzGI NCI Earnings / (Loss) 25 – – 25
Adjusted Operating Earnings before income taxes $944 $(107) $63 $987
Income Taxes 109 (22) 13 171
Income Tax Credit4 53
Adjusted Operating Earnings after income taxes $835 $(84) $103 $816
Adjusted Operating Earnings Per Share (EPS) $7.58 $(0.76) $0.93 $7.41
FY’21
Wealth Solutions $1,110 $406 $26 $678
Health Solutions 204 41 (98) 259
Investment Management 239 61 – 178
Corporate (261) (56) – (205)
Adjusted Operating Earnings before income taxes $1,292 $452 $(72) $910
Income Taxes 239 95 (15) 159
Adjusted Operating Earnings after income taxes $1,053 $357 $(57) $754
Adjusted Operating Earnings Per Share (EPS) $8.37 $2.84 $(0.46) $5.99
YoY EPS Growth (9)% 24%
1. Adjusted Operating Earnings as presented is a non-GAAP measure. Information regarding this non-GAAP financial measure, and a reconciliation to most comparable U.S. GAAP measure, is provided in the “Reconciliations”
section of the Quarterly Investor Supplement.
2. Net of Variable Compensation. Alternative income and prepayments above/(below) expectations are pre-tax and pre-DAC.
3. FY’22 Other notables include DAC unlocking in Wealth, 1Q Covid impacts in Health, and 3Q reserve release in Health. FY'21 Other notables Includes DAC unlocking, COVID-19 Impacts in Health, revenue and expenses in
Wealth Solutions related to the financial planning channel prior to its divestment in June 2021 and changes in certain legal and other reserves not expected to recur at the same level.
4. Favorable 4Q’22 tax adjustment primarily related to foreign tax credits
23Reconciliation of 4Q’22 and FY’22 Adjusted Operating
Earnings to Net Income
($ millions; all figures are after-tax)
4Q’22 (24) (10) 233
190 (10)
Net Income (Loss) Available Net Investment and Income (Loss) Related to Other Adjustments 2 Adjusted Operating Earnings
to Common Shareholders Guaranteed Benefit Gains Businesses Exited or to be
(Losses) and Related Exited through Reinsurance
Charges and Adjustments or Divestment 1
FY’22 835
(105)
(111)
(145)
474
Net Income (Loss) Available Net Investment and Income (Loss) Related to Other Adjustments 2 Adjusted Operating Earnings
to Common Shareholders Guaranteed Benefit Gains Businesses Exited or to be
(Losses) and Related Exited through Reinsurance
Charges and Adjustments or Divestment 1
1. Losses related to businesses exited includes amortization of intangibles, DAC unlocking driven by interest rates, a 2Q legal accrual, and CECL adjustments on the reinsurance recoverable.
2. Primarily consists of transaction and integration costs associated with the AllianzGI deal and other restructuring costs and 2Q impairment on owned real estate
24Reliable Long-Term Investment Performance
4Q 2022
% AUM Above Benchmark or Peer Median1
100
78 76
69 67
62 60
54 54
46 49
12
Equity Multi-Asset Fixed Voya IM
Income Total 2
3 Year 5 Year 10 Year
1. Voya Investment Management calculations as of December 31, 2022. Metrics presented are based on a prescribed criteria to measure each asset class based on its respective success in either, A) ranking above the
median of its peer category; or B) outperforming its benchmark on a gross-of-fee basis. Metrics are calculated on an annualized basis and inclusive of fully-actively managed mutual funds, collective investment trusts, and
separately-managed institutional mandates included in traditional (long-only) third-party accounts remaining open as of December 31, 2022. Metrics therefore do not include non-benchmarked assets such as passively-
managed portfolios, proprietary assets managed for insurance company affiliates (i.e., our General Account), private market assets held for book yield, and our alternative investment platforms. Newly-acquired assets from
the AGI transaction have also been excluded. Above median metrics represent a mix of net-of-fee rankings from Morningstar and gross-of-fee rankings from eVestment. Past performance is not a guarantee or reliable
indicator of future results. All investments involve risk including the possible loss of capital.
2. Voya IM Total 3-year performance was inaccurately reported for Q4 2021 through Q3 2022 due to an error in calculations related to currency translations
25Well-Diversified Investment Portfolio Built for Through-The-
Cycle Risk Adjusted Returns
General Account Investment Portfolio1
$41 Billion
Munis LP/Equity
2% 6% Short
Term/Treasury
2% 4%
45%
Public
CML 13%
Corporate
32%
Securitized 52%
26%
Private
Credit
19%
1 Ratings2
Fixed Maturity
NAIC 1 NAIC 2 BIG
1. GA Portfolio represents statutory carrying value weights for Voya’s operating insurance companies (RLI, RNY, and VRIAC) as of 9/30/2022.
2. Fixed maturity includes Public Corporate, EMD, Private Credit, Munis, Securitized Non-Agency, and Securitized Agency.
26Well-Balanced, High-Quality Rating Mix
❑ 96% of fixed maturity assets1 are investment grade
❑ 45% of the fixed maturity assets in the investment portfolio are NAIC 22
▪ Approximately 64% / 36% split between Public and Private
❑ Minimal allocation to below investment grade is opportunistic
% of Fixed Maturity Assets
95% 93%
1. Fixed maturity includes Public Corporate, EMD, Private Credit, Munis, and Securitized.
2. Estimated based on 12/31/22 NAIC and NRSRO effective rating composites
3. Below Investment Grade (NAIC 3 and lower)
4. Refers to securitized assets in the broad NAIC 2 category, 2% of which are BBB- on an NRSRO basis
27Private Credit Provides Income, Diversification and
Downside Protection
❑ 20% allocation in the investment portfolio, of which 93% is Investment Grade
❑ Covenant structures in Private Credit provide more protections than Public Investment Grade Bonds
❑ Voya Investment Management is a Tier One investor in the private placement market
▪ $61.5 billion of platform production since 2001; 54 insurance company, pension plan, and Stable
Value clients
Comparison of Private vs. Public
Investment Grade Private Credit Debt Investment Grade Public Bonds
Income Fixed Fixed
Rating AAA to BBB AAA to BBB
Ranking Senior and cannot be subordinated Can be subordinated
Covenants Maintenance / Comprehensive None
Tenor Flexible 2-30 Years 5, 7, 10, and 30 year
95% 93%
Recoveries 72% 91%1 47%
55% 59%
As of 12/31/2021
1. Voya Private Credit Strategy recovery rate
Source: Moody’s Default Trends Report. Investment Grade Public Bonds recovery rate is measured by the ultimate recovery, the long-term average recovery rate from 1987-2020.
28Low Leverage Commercial Mortgage Loan Portfolio
❑ 13% allocation in the investment portfolio, of which 78% is rated CM 1
❑ Weighted average debt service coverage ratio (DSCR) of 1.9x
❑ Weighted average loan-to-value (LTV) ratio of 45%1
Diversified Portfolio Exposure
Hotel, 2% Mixed Use, 1%
Manufactured Other, 1% 2%
Housing
20%
Community, 3%
Self
Storage
9%
Multifamily,
30% 78%
Office, 15%
95% 93%
55% 59% 1
CML Ratings
Industrial/ Retail, 20%
Warehouse
19% CM 1 CM 2 CM 3 & Below
1. LTV based on current loan balance and MAI appraised value at funding
29CMBS is Tilted Toward Agency and Loss Remote Credit
❑ 11% allocation in the investment portfolio, of which 97% is NAIC 1 or 2
❑ 32% of exposure is Agency with no credit risk
❑ 30% is to directly underwritten Single Asset Single Borrower (SASB)
❑ 34% is to Conduit/CRE CLO with meaningful structural credit enhancement (CE)
CMBS Ratings Distribution
CMBS Credit Book Value %
2% 1%
Enhancement1
CMBS Agency No Credit Risk 33%
14%
CMBS IO Limited Credit 3%
Risk
SASB 32% 30%
Conduit/CRE CLO 21% 34%
100%
95% 93% 83%
72%
55% 59%
NAIC 1 NAIC 2 NAIC 3 NAIC 4 & Below
1. CE = Credit Enhancement or the amount of loss that can absorbed by the structure before impacting the owned tranche
30CLO Portfolio is Modestly Sized and Highly Rated
❑ 4% allocation1 in the investment portfolio, of which 92% 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 CLO Structure3
Credit Book ▪ Collateral losses are
NAIC NRSRO allocated in reverse order
Enhancement Value%
of capital structure
AAA 34% 4% seniority
1 AA 25% 23% AAA ▪ AAA rated tranches
Rated would not be allocated
A 18% 66% Tranche
losses until collateral
63%
2 BBB 12% 6% NAIC 1 pool losses reached 37%
3 BB 9% 0%
▪ Structural protections
4 B 7% 1% include collateral tests
which can trigger the
5 Equity 0% 0% redirection of cash flow
AA 12% from subordinated
20% 100%
tranches to the senior-
95% 93% A 6%
72% most class outstanding
55% NAIC 2 BBB 6%
BB 5% ▪ Underlying CLO
NAIC 3, Equity 8% collateral portfolios are
NR actively managed
1. As of 12/31/22 there are $217M USG BV of additional CLO investments, including warehouse facilities, in Voya managed deals held outside of the GA by Voya Investment Management
2. CE = Credit Enhancement or the amount of loss that can absorbed by the structure before impacting the owned tranche (see AAA rated tranches bullet in Generic CLO structure for example of CE of 37%)
3. Generic CLO structure is a representative structure that is not indicative of all CLO structures and does not reflect Voya CLO portfolio composition.
31Alternatives Portfolio Has Delivered Favorable Investment
Performance Over Time
Key Characteristics of $1.8 Billion GA
Calendar Year Net Returns1,2 (%)
Alternatives Portfolio Profile2 (as of 12/31/22)
Long-term Return Target: 9.0%
❑ Diversified across traditional Private Equity,
Infrastructure, Real Estate, and Credit Funds
(no exposure to Venture Capital)
▪ Comprised of 89 distinct general
partners across 185 fund investments
❑ Private Equity
▪ ~80% of the total Alternatives portfolio
▪ Overwhelmingly allocated to buyout,
Average growth equity and secondary
13.5% strategies
Average
▪ Diversified across nine vintage years
(Ex 2021)
10.5%
❑ Infrastructure, Real Estate, and Credit
▪ ~20% of the total Alternatives portfolio
▪ Infrastructure and Real Estate include
both debt and equity strategies
▪ Tend to be lower volatility, diversifying
strategies
1. Net of fees; alternative investment income excludes the net investment income from Lehman Recovery / LIHTC, primarily in 2013, and net loss on the sale of certain alternative investments during 2012. Also excludes gain
on disposition of Venerable investment in 2021.
2. Returns include general account and Investment Management investment capital. 2020 adjusted to exclude businesses exited
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