Voya Financial (formerly ING U.S.) helps to steer the financial voyages of many Americans. It offers retirement, investment, and insurance (mostly life) services to 13 million individual and corporate customers. Retirement products include IRAs, brokerage accounts, and annuities. Its investment management division offers international and domestic equity, fixed-income, and multi-asset products. Insurance covers individual, term, and universal life, as well as employee benefits (stop loss, group life, disability), which it sells to midsized and large companies. Formed in 1999, the company had $466 billion in total assets under management and administration in mid 2016.
The company operates in two businesses which are further divided into five segments. The Insurance business (individual life and employee benefits)represents 36% of total sales. The Retirement and Investment Management business includes the Retirement segment (26% of sales), the Annuities segment (11%) and Investment Management segment (6%). The Retirement segment had $297 million and Investment Management segment has $252 million assets under management.
Voya Financial has offices in Atlanta, Georgia; Braintree, Massachusetts; Des Moines, Iowa; Jacksonville, Florida; Minneapolis, Minnesota; New York City; Scottsdale, Arizona; West Chester, Pennsylvania; and Windsor, Connecticut. It owns or leases 69 locations throughout the US.
Sales and Marketing
The company targets markets such as mass market, middle & mass affluent, affluent & wealth management, small-mid, K-12 education, higher education and government.
Target markets for annuities include individual retirees and pre-retirees seeking to accumulate or receive distributions of assets for retirement. Annuity products are primarily distributed by independent marketing organizations, independent broker-dealers, banks, independent insurance agents, pension professionals and affiliated broker-dealers.
The company’s investment-only products are distributed nationally, primarily through relationships with independent brokers, financial planners and agents.
Voya Financial serves its institutional clients through a sales and service platform consisting of direct- and consultant-focused sales professionals; and individual investors through an intermediary-focused distribution platform, consisting of business development and wholesale forces which partner with banks, broker-dealers and independent financial advisers, as well as affiliate and third-party retirement platforms.
The individual life segment distributes its product offerings primarily through a network of 100 Aligned Distributors with access to more than 55,000 producers.
The employee benefits segment works primarily with national and regional benefits consultants, brokers, TPAs, enrollment firms and technology partners.
Voya Financial’s revenue increased by 2% to $11.3 billion due to a 23% growth in retirement segment as a result of an increase in premiums primarily due to pension risk transfer contracts, which corresponded to higher interest credited and other benefits to contract owners/policyholders. Retirement segment also grew due to higher investment income and net realized gains attributed to the growth in general account assets driven by positive net flows, including participants’ transfers from variable investment options into fixed investment options, and higher prepayment income.
The Employee Benefits segment also grew by 10% due to higher sales of group stop loss as well as favorable sales of group life and voluntary product lines.
After continuous growth over the last four years, Voya Financial’s net income decreased by 82% to $408 million in 2015 due to income tax expense incurred over benefit in 2014. Income tax expenses incurred due to a decline in federal deferred tax benefit, higher interest credited, and other benefits to contract owners/policyholders provided by the company.
Operating cash flow decreased by 11% to $3.2 billion in 2015 primarily due to lower net income and an increase in cash used in funds held under reinsurance agreements and reinsurance recoverable.
Going forward, the company plans to improve profits in its businesses by re-pricing and closing some lines, focus on capital management, and continue its conservative risk management efforts. Voya Financial also intends to increase its cross-selling within the strong retirement segment and leverage its employee benefits relationships to offer those customers its other investment products.
It is looking to increase deposits in SmallMid Corporate and Tax-Exempt Markets; for Investment Management to attract new institutional and individual customers in its third party business and to increase the share of proprietary assets under the management of Retirement.
In Annuities, Voya Financial is focusing on increasing its distribution reach and expanding its product portfolio. In Employee Benefits, the company is expanding the reach of its group life and stop-loss offerings to grow in the middle market and with private exchanges.
In 2016, the company launched the Voya Wealth Portfolios product, which works on WealthSolutions wealth management platform. As a result of this new advisory-focused solution, financial advisors affiliated with Voya Financial Advisors now have access to leading fund families and the ability to provide approach to constructing investment portfolios. This strategy is focused on finding the right asset allocation mix to match a client's individual financial needs and risk tolerance.
In 2015, the company entered into an agreement to sell via reinsurance an in-force block of approximately 155,000 term life insurance policies to Reinsurance Group of America, Incorporated. The transaction supports its focus on improving returns in its ongoing business while also enabling the company to free up more than $230 million in excess capita.
Change in Company Type
ING U.S. used its 2013 IPO proceeds to pay down debt in conjunction with ING's recapitalization plan. The public offering was part of ING Groep's plan to separate its banking and insurance businesses as it sells and spins off various units from the Netherlands to Macao (and worked to repay government bailout funds). ING U.S. filed its IPO registration statement in late 2012 (with a placemark value of $100 million) and completed the IPO in May 2013. The offering of shares raised about $1.3 billion, with ING U.S. reporting proceeds of about $600 million (remaining proceeds of about $700 million went to the parent organization and were used to pay group debt). ING gradually reduced its stake in the company, exiting its investment in early 2015. It also renamed the division as Voya Financial to reflect the unit's voyage towards independence.