VOYA

Overall Firm Performance

• Delivered adjusted operating earnings of $1.51 per diluted share ($140 million total) for the quarter, with a 90 cent per share drag from below-expectation alternative investment performance (driven by lagged private equity portfolio results) and upfront severance costs
• Generated ~$150 million of excess capital in Q2 and $350 million year-to-date, with cash conversion above 100% for the quarter; returned ~$200 million to shareholders in Q2 via repurchases and dividends
• Completed the final phase of the One America acquisition integration during the quarter, which has exceeded all original financial goals and added new strategic capabilities in the retirement segment

Retirement Segment Highlights

• Achieved over $8 billion of defined contribution net inflows, supported by high client retention and large plan implementations in government and corporate markets
• Added over $30 billion in assets and ~1 million new participants in the government retirement segment (where Voya holds industry leadership) via organic growth over the past 18 months; emerging market full-service sales are up over 30% year-over-year
• Wealth management expansion continues to progress, with 12% year-over-year revenue growth, 16% year-over-year AUM growth to $33 billion, 20% year-over-year advisor growth to over 650 advisors, and productivity meeting targets

Investment Management Highlights

• Delivered positive net flows for both the quarter and full year-to-date, with demand across a broad range of investment strategies and distribution channels
• Launched two new multi-manager collective investment trusts to expand private and alternative asset solutions for retirement plan clients
• Maintained strong long-term investment performance: 83% of assets outperformed peers/benchmarks over 3 years, and 85% outperformed over 10 years

Employee Benefits Highlights

• Stabilized loss ratios and margins across the entire stop loss book while holding reserves at the high end of management's best estimate range; pricing, underwriting, and risk selection discipline are driving continued margin improvement
• Group life results benefited from favorable industry-wide mortality trends; voluntary business fundamentals remain strong with 7% trailing 12-month sales growth and solid persistency

Strategic Priorities

• Continue executing on core strategic priorities: delivering strong commercial results in retirement and investment management, stabilizing and growing margins in employee benefits, and expanding wealth management capabilities to drive long-term revenue growth

• Management expects meaningfully higher earnings in the second half of 2026, supported by commercial momentum, improving employee benefit margins, and cost savings from Q2 severance actions (which are expected to fully offset upfront severance costs by year end)
• 2026 full-year cash generation is on track to exceed 2025 levels, with cash conversion remaining above the firm's 90% target
• For Q3 2026, management plans to deploy at least $100 million toward share repurchases, with additional capital deployment flexibility in Q4 based on cash generation outcomes
• Management maintains a long-term 9% annual return target for the alternative investment portfolio, with an expected improvement in alternative investment performance in Q3 2026
• Management targets a return of the stop loss business to its historical target margins by 2027, with any potential reserve adjustment to the 2026 full-year loss pick most likely to occur in Q4 2026 rather than Q3
• The long-term organic growth target for Investment Management remains 2% per year, though the segment will face a modest headwind in 2026 from the legacy relationship wind-down with immaterial revenue impact

1. Retirement: Adjusted operating earnings were $190 million for the quarter, with a 6% increase in adjusted operating earnings on a trailing 12-month basis. Fee-based revenue grew 10% year-over-year, now representing over 60% of total segment revenue, and margins remained healthy at 38%. Defined contribution net inflows hit $8.1 billion in the quarter, and the segment now serves more than 10 million participant accounts. Results were negatively impacted by below-expectation alternative investment performance reducing spread income, though core spread income remained resilient when excluding this impact.

2. Investment Management: Adjusted operating earnings increased 12% year-over-year to $57 million, with an 11% increase in trailing 12-month adjusted operating earnings, driven by higher advisory fees and disciplined expense management. Net inflows were $1.2 billion for the quarter and $6.3 billion over the last 12 months. The second half of 2026 will see a modest headwind from the wind-down of a legacy non-core relationship, but the expected revenue impact is immaterial for 2026.

3. Employee Benefits: Adjusted operating earnings were $22 million for the quarter, and $122 million over the last 12 months. The segment achieved a five-point aggregate loss ratio improvement over the last 12 months. An $8 million reserve release was recorded in stop loss during the quarter, with early 2026 claims experience emerging favorably compared to 2024 and 2025. Favorable group life mortality offset elevated voluntary segment loss ratios driven by non-recurring one-time items, and expense actions are on track to maintain target net margins for voluntary.

• Alternative investment portfolio performance is subject to quarterly volatility driven by private equity valuation timing, broader equity market volatility, interest rate movements, and industry-wide lower private equity realization trends
• Stop loss claims development has taken longer than in prior periods, with uncertainty around the timing of margin recovery and potential reserve adjustments
• Retail investment management net flows have been negatively impacted by near-term international market volatility and macro uncertainty, leading to negative retail flows in the past two quarters
• BenefitFocus has taken longer than expected to reach target economic outcomes, though management reports the business is now stabilizing

Q: What is driving institutional net inflows for Investment Management, and what does the pipeline look like? Also, what RFP activity trends are you seeing in the retirement business? / A: Q2 2026 Investment Management institutional net inflows hit $1.6 billion, with a rising revenue yield that counters broader industry trends, driven by strong demand for Voya's fixed income and private credit capabilities. Fixed income and international market capabilities position the segment for continued long-term growth. For retirement, RFP volumes are up 6-7% overall, with double-digit growth in the mid-market segment and low single-digit, stable growth in the large mega plan segment, supporting ongoing commercial momentum.

Q: Can you give more color on the 2026 stop loss claims trend, timing of potential reserve adjustments, and whether you expect to hit target margins by 2027? / A: 2026 stop loss business is only 15-20% complete as of Q2, and is running meaningfully better than 2024 and 2025, with lower claim frequency and fewer high-severity claims. A reserve adjustment to the full-year 87% loss pick is most likely to come in Q4 2026, as management does not want to accelerate outcomes before enough claims season. Voya has secured 24% rate increases for 2026 business and additional rate increases for 2027 renewal business, and hitting target stop loss margins by 2027 remains the explicit plan.

Q: What drove the Q2 2026 alternative investment headwind, and what is your outlook for the second half? / A: Q2 alternative investments delivered a 2.5% annualized return, impacted by industry-wide low private equity realizations, Q1 broader equity market volatility that drove valuation markdowns (reported on a one-quarter lag), and higher interest rates. Voya continues to gradually reduce the size of the buyout-focused private equity portfolio, shifting to more income- and fee-generative opportunities per its long-standing strategy. Stronger broader equity markets in Q2 and Q3 create a favorable backdrop for an improved alternative investment result in Q3, and the long-term 9% annual return target for the portfolio remains unchanged.

Q: What is the status of the BenefitFocus acquisition, and are there plans to exit the business as some peers have done with similar acquisitions? / A: BenefitFocus remains a core part of Voya's workplace strategy, and while it took longer than expected to reach expected economics, the business has now stabilized. Revenues have held steady at ~$200 million annual, with significant improvements in client retention and client satisfaction for onboarding and ongoing services. The platform enables Voya to deliver integrated workplace solutions, connect clients to complementary wealth and voluntary benefit capabilities, and supports the overall workplace-to-wealth management strategy.