Voya Financial, Inc. Q4 FY2025 earnings call

Key highlights include: In Retirement, defined contribution net flows at record levels, OneAmerica integration exceeding financial targets, wealth management as high-margin growth engine. In Investment Management, record net revenues and organic growth, strong performance in various channels. In Employee Benefits, progress in improving margins, especially in Stop Loss with rate increases, risk selection, and reserving. Across enterprise, strong financial performance, significant cash generation, and positioning for further excess capital increase in 2026.

In 2025, Voya delivered strong financial results. Retirement: Delivered exceptional results with defined contribution net flows surpassing $28 billion, highest in Voya's history, participant base near 10 million accounts, OneAmerica integration exceeded financial targets, wealth management generated over $200 million in net revenues in 2025. Adjusted operating earnings in Retirement stand-alone were nearly $1 billion, 17% higher than 2024, with fee-based revenues exceeding $1.4 billion and a 21% increase year-over-year. Investment Management: Delivered record net revenues over $1 billion in 2025, 4.8% organic growth, flows of approximately $15 billion, AUM at $360 billion. Adjusted operating earnings were $226 million. Employee Benefits: Adjusted operating earnings were $152 million in full year, significantly improved from $40 million in prior year. Stop Loss in 2025 saw meaningful improvement with full year reported loss ratios improving by 10 percentage points from 94% to 84%, average net effective rate increase of 24% for January 2026 business.

In 2026, expect further excess capital improvement. Anticipate meaningful defined contribution net inflows in Retirement underpinned by plans in back half of the year. Enter 2026 with momentum in Investment Management to deliver another year of organic growth. Continue to improve margins in Employee Benefits, with Stop Loss actions positioning well for 2026. Plan to repurchase $150 million of shares in first and second quarters of 2026, subject to macro conditions.

Uncertainty in Stop Loss claims experience due to broader healthcare backdrop leading to wider range of outcomes, which could impact reserves and margins. Potential disruption from artificial intelligence in certain areas, although currently seen as more opportunities than headwinds, but monitoring for any adverse effects.

Q: On Stop Loss, details behind reserve actions and if rate increase is enough?

A: Reserves increased due to wider range of outcomes in healthcare backdrop, rate increase of 24% for January 2026 cohort is seen as sufficient with higher demand and limited supply.

Q: Outlook for full service in Retirement 2026?

A: Expect strong organic growth with back half weighted flows, high retention rates and planned RFP activity.

Q: Capital deployment beyond buybacks?

A: Actively assessing retirement roll-up opportunities with high bar for M&A, but share buybacks remain near-term priority.

Q: AI impact?

A: More opportunities than headwinds, seen as helpful for expense efficiency and client experience, but monitoring for potential disintermediation.