VOYA - Earnings call transcript Q3 2018

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Operator

Good morning, and welcome to the Voya Financial Third Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Michael Katz, Senior Vice President of Investor Relations. Please go ahead, sir.

Michael Katz

Thank you and good morning. third call. Financial's Voya to quarter conference Welcome Materials at investors.voya.com call are our website available on or for today’s via the webcast.

X. Slide to Turning

Some information, meaning during forward-looking Form made revise or The of call to not or the contain reflect changes them expressed the and may new results company this does company statements U.S. events to from federal recent these of actual company’s the conference that in differ discussed the cause update securities or subsequent law. filed could uncertainties within are with comments strategy. in Securities Risks Commission. implied by and XX-Q most materially the Exchange

measures financial release and this found some call website, measures. to press may to the measure in directly our found refer supplement these investors.voya.com. financial the U.S. comparable can made Additionally, most of be GAAP during our on conference non-GAAP financial of comments Reconciliation

the Executive their Financial's we call Officer. Voya After take are prepared Martin, well Joining Voya's Financial Smith, questions. your as me Mike will Officer; on Chief Rod Chief remarks, and Chairman as

we Individual session, let’s to Q&A Rob Retirement; to like Slide over Rod. Employee heads as call Management; to invited Carolyn Hurtsellers, also specifically, that Charlie that For Nelson, of our Christine and Benefits; would I Grubka, Life. Investment the With Johnson, businesses, have X turn turn the

Rod Martin

Good morning.

key themes. some with X Slide on begin Let��s

enable within capital range management. our our was XX% to above DAC target grew quarter, demonstrated income operating adjusted net growth, for we’ve excellence our This Normalized per third On share. basis earnings the $X.XX and and to year-over-year. operating During expectations, is $X.XX and EPS Day end prepayment our capital for commitment unlocking long-term with our alternative adjusted cost fees earnings that operational our November improve to to will $X.XX plans on us updated on These our XXXX. we of XX, achieving Investor At had management. the growth, per savings further aim earnings second and be to we'll details quarter continue share. per sharing of the plans by achieve share organic

quarter our the In operating businesses. throughout for months. full another recurring trailing the our XX management, performance continued adjusted net we for increased retirement record a improvement service strong StopLoss quarter XX% with investment with sign demonstrates deposits across XX quarter earnings employee momentum driven source pricing had of by IM achieved Our We of we delivered underwriting consecutive our commercial flows, momentum And disciplined clients. by positive of institutional actions. our benefits, in in

due growth. segment to the largely Within voluntary our annualized premiums continue business we in-force to increase our

to continue $XXX as million million We strong with position of $XXX plan million in we a well. XX. fourth shares during of to quarter $XXX repurchase capital and as the We third have approximately of of the capital shares quarter repurchased excess September

the a received than shareholders. which our the $XXX we May gives authorization more repurchase million addition, repurchased IPO In value us for to opportunity from board, of Since share we million have create XXXX, shares. XXX in additional

quarter, we in We At a fourth funded million which them was equity beginning our to paid third plans on for their reduce of leverage. debt, progress also made preferred $XXX the issue. outstanding the of the new quarter by

the as Business. concluded yesterday, Life Turning have announced of our Slide strategic review Individual we to we X,

been several Individual the it annuities was our at Following the forward had look we path to given close closely best Life of transaction with Business aligned X, felt the it important June for block. thorough There the these while are decided a review, we important retaining the of we’ve at to end after chosen this And why reasons this annuities. path. year, cease have sales

like largely and growth, businesses. the serving aligns within higher These businesses return, First, strategy are our workplace focusing institutions. customers of higher the decision on with focused capital on to

cash path flows shareholder greater deliver will improving by value reducing this Second, while costs.

billion and $X third, free diversification provide least the earnings to Individual expect Life to with years. next Individual six from cash And continue segment at the capital equity five will flow We over minimal to Life generate to markets. correlation

close future to to release. solutions strategic as retain sales, optionality the to capital accelerate we new find Additionally, we business

of we As know, many driving have a of strong you track blocks in-force improving record and efficiencies.

Life will retaining a take thank a want successful are this this we've in-force block, conclusion. helped talented strategic employees the team to manage Carolyn review We business team many moment realize and that identified. leadership to bring We our to our the help us in Johnson, who to continue value to Individual who a

Turning to Slide X.

external that people enabling us have culture. recognition over strong our years, Our driven our the past highlights to several success earn

apply Jones the consecutive to were to named seven in XX to member. just of industry companies invited a For financial and Voya become Sustainability year, we’re third Dow was the the one Index, services XXXX

we XXXth World's rank great were Forbes. Best year. the list by for of third once to Employers the one certified XXX Additionally, as this to Great We place by Voya on month, the selected again named was companies. a Institute Work of work Place the earlier And

September, volunteering During more in held at highest employee that we communities the than their participation with businesses. had time We ever employee employees campaign. X,XXX do our annual our we XX% giving donating or

matching with around As participation Foundation, we million employees culture positively U.S. to $X.X talent. the helps and Together top effort This roughly external and average attract point, our of our charities campaign people, country, contributions customers Voya’s to dedication impacting at live and the from a where along which the and retain demonstrates companies reference is donated rate work. workplace with recognition our XX%. Voya communities strong the

for Now, Mike will provide the on performance more details quarter. our

Mike Smith

long-term results third our quarter share excluding X, operating and per We third $X.XX our Slide of a demonstrated On fees unlocking adjusted earnings strong and alternative income expectations. prepayment On basis, above Rod. quarter were earnings adjusted momentum. delivered $X.XX. operating reported you, Thank operating

the $X.XX target This earnings share. to adjusted $X.XX of range quarterly our is quarter's in result of per operating

cost our set underwriting, and financial repurchases. growth our quarters Investor targets forward sharing at net been Our Day on has you We earnings last share income, with realized strong savings, the fee of rising November XXth. next look by favorable over several driven to

quarter, annual our assumptions the which we update. of result unfavorable a of deck mostly During had $X.XX unlocking was

September As Individual assumption offset portfolio. one-time changes certain of equity of we range of in our The increased was was private high-end this estimated retirement. the income $XXX the favorable partially This sale we in premium change long-term Combined and alternative related $X.XX assumptions above prepayment impact our $XXX reinsurance million for Life a the million was and blocks. near to by disclosed in a driven holding alternatives expectations. by was primarily distribution to

that strong Retirement management of in quarter achieved supported record to operating was fee earnings. XX% growth under was by X, income Moving adjusted This year-over-year. assets another driven Slide by

Our reaching on XX.X%. XX capital return trailing months also grew

full service markets mentioned quarters strong During driven the Retirement supported generated positive value. favorable net benefited Full by positive in alternatives service quarter another largely by the marking from generated This quarter, XX% XX primarily reversion DAC recurring corporate Retirement performance of stable growth was consecutive unlock million, corporate by portfolio. markets $XX was of inflows. trailing and year-over-year. in deposits adjustments to return months mean flows The flows quarter from previously XX driven our our assumptions. investment equity

remains guidance half million Retirement unchanged. $XXX to Our outflows was net million second $XXX

stable As surrenders, impact we largely reflects occur we highlighted of now call, the which our on value quarter this fourth in to expect second quarter. the

our of surrenders segment. Retirement impact earnings will net to the be meaningful reminder, these not a As

in additional economics have better reflect As you of our business. supplement disclosures investor may our seen, have we to provided the

as from new outflow stable of retain better guarantee. for underlying the the Previously, the impact the depicts rep loss an disclosures First, management we assets value value stable earnings even net classified we retirement when flows. of the

to will an for for be an this while Going it will be outflow no outflow investment management, forward continue recorded considered longer as retirement.

to pre-tax low operating the in is The of a under quarter, the earnings by administration. record-keeping can our we any In the approximately record-keeping $XX a plan activity retirement in we billion impact annualized encouraged forward termination Second, pipeline given transparency are expected assets we millions. greater roll provide expect XXXX new planned by into Though of of of digit be sales. to large business providing fourth quarter, lumpy single be assets.

XX, Third, by fee total assets. by And On disclosures full business. Management operating from provide earnings. the capital fee quarter. source adjusted million holistic a AUM. higher on our delivered more favorable We income of growth investment the Investment including generated we $XX strong commercial management finally, Slide we client results in view Investment business our provide were new generated service of also

offset was XX.X% the expected, annuities months full this investment by of quarter As capital. transaction. margin impact operating was trailing rate The the including earnings XX run

asset levels. to We expect we the Over our as effect operating the margin do as trailing incorporated. the the becomes the to XXs next over transaction time, return several margin decline our fully of rebuild quarters we low annuities to XX-month expect operating

a duration basis, slide, quarter. As depending On management the source new basis This than The loans exceeded more we our can manage on our X mortgage Institutional quarter how vary points. you to see client were we by closely can a short outflows the XX-month aligns source we see inflows wins a As This mix. on those institutional view and of each third flows. basis in sizable by institutional positive lower asset retail outflows the on for had a consecutive for and investment funding. points led inflows our on including commercial fees securitized XXth our business. mandate, several on of provided fees provided portfolio net to credit net trailing quarter slide, solutions We demand you flows. the X will

our or notable This sizable sub-advisory across growing includes a income fund with loan our our and mandates Asian healthy Looking in a demand pipeline ahead, new to growing mandate we global mandate we have quarter a CLO including XXXX. channel, fixed XXXX that Several several savings insurance the early expect large issuances. fourth senior the solutions. asset strategies highlighting bank items for within plan, of commercial a management

capital earnings Slide to $XX our million benefits return XX-month were operating adjusted on trailing and was Employee XX.X%. XX. Turning

As pricing range. target we actions ratios taken will on full by signaled loss quarter, for confident ratios business. last of driven loss impact stop be to our remain year the return the We in also XXXX range loss

Life Group year continued over in-force ratio XX% supported returned Strong grew to loss momentum year also by and third across voluntary range. target Our our premiums all the products. sales Voluntary health quarter. our supplemental annualized into

business. our important voluntary for an driver Our growth continue to offerings represent

loss quarter, our aggregate started we total Investor have to supplement. in our This ratio provide

aggregate was ratio trailing between on Life million Individual in the Slide line XX% in with In to quarter, We earnings the $XX were On operating XX-month mortality XX, adjusted quarter. expect basis. to be XX%, expectations. a third total loss the

expected update Our $XXX by in annual unlock increased million reinsurance driven costs. resulted mainly negative a DAC assumption

Our assumptions reinsurance We future. our rate additional significant reinsurance recaptures related in of now reflect all significant to or expect reinsurance premium the actions partners. increases don't foreseeable

average as the sequentially capital lower X.X% tax reform. was increased of capital with on gap return XX-month trailing Our impact

of incur Turning we strategic the $XX decision, in charge financial to our million quarter. implications the review restructuring will an fourth approximately

other of in will We $X activity. expect least cash free run next to onetime at billion business savings five six over in expect wind to million flow years. to for we XX% flow On to provide the XX, new items generate annual in as XXXX down additional rate to cost quarter. actions we $XX factoring we cash consider conversion And XX% free the pre-tax our improve Slide

fourth project our we variable spend quarter primarily to expect be timing to the due of in sector. compensation in Specifically, the higher expenses retirement and

other X% consider provided fourth million not of on capital our earnings impact fourth to XX, quarter items On annualized a fourth EPS, we have that impact will positive is while Slide Also, shares $X factors pretax our will have approximately share repurchases results. quantified of slightly the $XXX there to million affect to a we plan million $X While quarter we move equity of in in be strong. have revised estimated some market course position meaningful to repurchase quarter. explicitly

Our ratio September. XXX% end was at the of estimated RBC

expect We formula in the decline ratio quarter end. to RBC tax-driven the as go year our RBC to into changes fourth at effect

$XXX priced offering. XX pay estimated strengthened our approximately points. of ratio which sheet fund the preferred ratio an The balance will in impact to RBC As XXXX. mentioned debt quarter, is debt-to-capital a quarter, last we million with In to our proceeds reduce the fourth help our down equity attractively this quarter

the on this see both to excess forma impact can slide our and capital ratio. You debt-to-capital pro

$XXX statutory holding to excess end of surplus of liquidity Specifically, target the consists company estimated capital, the third increased forma our pro above and million at quarter. which

our below forma pro was our Additionally, debt-to-capital XX.X% ratio XX% target.

to XX. Turning Slide

we these six trading in if the times on our consensus and XXth At to particularly XXXX free adjust you depicted we approximately cash repurchases to generation shareholders graph high us, estimated of our tax assets, Voya which the value levels, earnings. at share Voya’s as our ahead closing Investor forward view As on high the enhancing by growth of flow opportunities at upcoming value price deferred left, our our earnings, for Day. share with given we trades October quality continue sharing look

third Rod additional attractive As we in shares of plan quarter the $XXX at million quarter. mentioned, in an repurchased We levels. the to $XXX these repurchase fourth million

$XXX approved we In new earnings In a million ahead share addition, schedule. the within summary, quarterly board generate per targeted repurchase share our EPS range of authorization.

businesses sheet I call we operator, will to are questions. position strong to can see turn capital take Our continue back your and balance our the strong. that, momentum so With the and that

Operator

Krueger KBW. is Our Please of Instructions] your proceed with [Operator line the first question Ryan with question. coming from

Ryan Krueger

reinsure individual rather decision to the or Can than provide you it on additional it? some retain sell color life

RodMartin

and toggle that. Mike I, will with Carolyn Rod. It’s and

Ryan, you're step The call. specifics. first want new the listeners got I the I some then familiar, a get moment we've and into just to very on step, maybe know and but back

I are to think you X of and we've all about very our are about fully we're on Phase two to Investor Phase introduce, of improvement excited a and return finishing it of in plan capital journey We're Day. X been shareholders. ROE that we our at weeks, aware

return X. call, growth, on on transaction, As the announced businesses capital institutions. Apollo-Athene I talking with closed our focused higher workplace the we're higher year, on this we the financial earlier queued up June about that We and like

the The other life portfolio the rationalization was piece review. of

we rigor to that CBVA with conclusion thoroughness our as review It the we've that same best from and was the a capital announced - have what was the that announced. did shareholders brought we We for piece. outcome perspective

first plus. equity non-correlation benefit just You'll years hear happen moment, five from talking billion or or but will that in we're Much the years returning $X three to six a of the also the in years. two the about over provides next to Mike It shareholders us market.

able We other or any options transaction color. manage to it either be to reinsurance alternatives could to continue and that And all that, throw assets, the for on table those Mike themselves. with to remain present I'll add a

Mike Smith

guidance clarify the that flow that of just maybe maybe in And jump on had on bit a pre I'll we've calls some the cash we it given based and had.

cash the flow, is So, of the years billion the two flow plus to over five we'll in way cash have $X think years really of to the next six pieces.

we the flow said to XX% cash first as conversion. The is XX%

in run So, to that free that to think of the that as a expect GAAP be normalized rate year-in, range relative year-out, we flow earnings. would that cash

the were addition will year related largely intend kind of of a done our plus similar In improvement pursue capital that past to different over redundant to and ROC what reserves billion that and couple ultimately we we've the is resolved the things next two to to story. part initiatives much financing of or of the in be the

next years. doing few be the over we'll So those

XXXX. or XXXX in sometime seen be XXXX to finishing that expect We up in

certainly lapse longer we time last Life want the the than we that's one to rates to could the element flow, be understand on block, flow is simply far can relatively liabilities of five a that stretch years return years expect period. the the it. blocks significant talk typical level decades. people and that lower for after about add business I sure The frame and chose that say term. That's picture left cash cash which annuity when insurance - to There of near long that don't over we say other can the intend to the is to six are

the to significant years, assuming expect the hold value years there after five six to to be continue we block. So we

Rod Martin

Ryan, piece add. would I one

an We attractive block. in-force have

no blocks. other the way experience our nothing of or this is review shareholders have managing judgment unexpected to than came of that were in We considerable in-force There out most surprises return period capital to the this during time. expeditious that

Ryan Krueger

And then one question. separate just

based repurchase, the suggested do you the for to just impact sensitivity. this still clarify share EPS I repurchase think quarter? would you $X.XX when equity - of, in would quarter $X.XX fourth terms you in the guidance the and market both fourth share the expect incorporate Just equity market was to on But before

Mike Smith

didn't So in market - greatest reflect current equity to of $X.XX. Ryan, this the guidance the is Mike. latest the version We and

see the $X you though So up - let's you you tax, share. down where which million about you'll say is it's if the I a after for think if you per that, quarter math, guidance been. applying wind the can do That's S&P into translate which is X%, the at

plus equity, you organic what probably tell on baseline that think you I depends And that. $X.XX other in the range time adjust think that of growth repurchases that then think still any quarter. when and the I plus of the the you’re much rest of pretty benefit will about guess happens I for course for on

Rod Martin

And Ryan, Mike maybe we've what one the to $X.XX, post previously add about to to piece close. XX has just months shared, expected $X.XX talked

think about XXXX. June So of

million decision, of start that pretax another life in the With XXXX. $XX cost savings there's will

$XX add and of the So give million $X.XX and a you $X.XX good that point to will others reference. to

Operator

Our next question. with from question of Dally is with Please coming your Stanley. Nigel proceed Morgan line the

Nigel Dally

to $XX in or XXXX the the additional Another the a block? that cost the run-off. Individual the get that this just And statutory question there to from talk million phase it of level of Will also expect that segment backing Life about ultimate saves total be amount is business? last XXXX. you Can capital beyond bit any on of clear on be upside you

Mike Smith

each of have a statutory on typically is the this amounts give to the businesses. don't we've for statutory given not capital, We Mike. number capital Nigel, of the

statutory the York little more rest difficult and see with can you Security business Life Life that's the capital see Denver, is You ReliaStar ReliaStar of of a can entity. what's where GAAP a our and New separate of It's certainly obviously number. in

potential, In rationalization is from the activities. saves $XX of think I cost This terms the the there just potential beyond million. of business related in is new

as on we value on us be realizing ultimately can of the talked going - we team very about. explore. manage to to that pursue. it'll think we're they'll that block ready of give and talented We're forward, sorts though for to able numbers be in solutions have additional will be opportunities important a will I we this block the the of kind terms important depend we've rationalization there very not that It maintain yet, supporting the Life that very our

Operator

The coming Citi. Please line next question of is Kamath with with from the Suneet question. your proceed

Suneet Kamath

back business how going Life give deal, the to the quickly earnings you'd the runoff? how you years? us Just Life couple to track the over sort wondering from can we expect Just expect sort of sense to base of of next a should the of that

Rod Martin

Kind short, the of be earnings there near discernible future. in degradation won't a over of

degradation long-tailed We earnings that is a expect of the over future. this near

expect that We tailed block. long this - is a

reductions a strain new particularly the of that from already you comes GAAP that degree have business. mentioned, we've when benefits we'll there given from So, the is that cost

so think I effects, we you'll the kind anticipate level-ish see of degradation external occur, depends but events beneficial meaningful don't much pretty horizon. And on those that you foreseeable any when add over other Obviously, earnings.

Suneet Kamath

in quarter. about retirement XXX I business for just then And think the the normalized of if earnings

what forward run that mentioned XXX that came But going we expecting? business about rate little think that quite above record will ex-that, a a to that bit down decent were is You’d in a keeping take to bit.

Rod Martin

run think pretty think so. - rate. increase mind I than But about. that it's in talked keep that I the expense good other fourth we a it's I quarter

Operator

Evercore. Gallagher question next proceed question. is of with from line The Tom your the coming with Please

Tom Gallagher

life? basis - there on pricing from reinsurance the for go-forward negative was impact individual there was increased from Mike, a a

Mike Smith

is. on into we Tom. It's Yes, guidance the the there gave factored quarter.

chunks netted all basically than the left impact it is - pieces, it out. will as modest There life the rather breakout a and is we earnings. a So just little to be there

Tom Gallagher

in of into retaining just reinsurers or Was for on on of color describing by the you you up in process the Can life you the low? terms the decision bit just of And being terms dynamic the in retain learned surprised other thought you you then a the little block. know were of you what the it? a did Is you - side and find what what buyers the better and what on side. went the the just it of Rod, side, us give did lack what kind other positively other it end back surprised that were of fairly or way benefits that bids about of there

Rod Martin

are, Tom, I retain is bit that at a fair to But remarks say market external market remains our a look would here. the our do market. is we've as outcomes identified for conclusion concluding market. say, shareholders. the reinsurance to process. because this what I mentioned are our robust optionality lens, and we into the in Life And CBVA above that and terms piece maximize ability a where say was factored average and follow little than There robust with that our on that I we market announced. in we previously the that. we There bullish going question. is done an and decision. two journey more I'm there the talk about also of we've frankly, we would best a manage we'll number own at the And other the table how number We're We've I about we blocks the what it of point, the at asset that know significant did the transactions path

shareholder you for the people I the maximum takeaway on the returning time the we're is call and focused think what is, on value. for of all

here and X talk of think we I to reflected $X businesses no strategy. where And really Investor billion buyback share our we're we've Phase Day our about that's that forward the ongoing in looking different it's of done. in

Tom Gallagher

billion final question outflow. $XX keeping the then record And just

impact. keeping only millions can assets. you You remind Mike, low us it remaining was single know, record you I the earnings said, negative just And digit think

pure recordkeeping is might terms else only that you in - assume or AUM other related a fees was to I outflowing and earn? not that So, of other means that nothing -

Mike Smith

digit purely You've the got And impact. there, administration It’s under right. are that billion. under administration. in now low single assets It's assets total earnings it’s $XXX -

that's as and how full be to to a of kind of pure the in stock, percent But lower that's significantly understand - the service, assets that's you the earnings So going and the impact. billion. recordkeeping $XXX relative fees are

Operator

Our next question the proceed of is question. Sandler your with Please line O'Neill. coming with from Barnidge John

John Barnidge

There these Clearly, Benefit has a the meaningful should this we top repricing loss of How Employee that been think in as improvement the some in have business rate? and helped. actions ratio see third XX% year. run quarter sustainable achieved the do of you

Rob Grubka

Grubka. Rob is This

standpoint As we've the we business around said the been of focused wrote. what last doing the from renewal we've several we new that very business volume XXX quarters, both a on were and

quarters, been focused X:X on we renewal business around the standpoint we business As and very several the from were that we've both last volume we've said a wrote. of what doing the new

to having where good I where over learned shown long pretty our a we our did about it confident think was we're said to quarters it in in his several from range of about to we and it. periods, we've we've think So, what in third We give Mike feel came in we've That comments certainly perspective, ourselves the said quarter-to-quarter record as needed and had in time standpoint. We range. the expect be that last range we than convince show a we that and from of we where not periods as it done quarter, as itself expected track we continue to pricing where about better a be. to sort much emerged

Rod Martin

out meetings and other about that and call various have we've talked calls I Mike and the John. It’s and the piece one we Rod, I’ll slide add on. in on been others

employee every team was think expected good think your and we our if proud overall so four properties I’d what I that an the those you happened, done relates those very has what and at and mix part companies, the this I'm or - last how as we job. are I underappreciated what's properties. paid feel ongoing various also was and as made a the value I think the our This about value it is to call and voluntary reflected Voya’s as we've contributing the shared in that value business. investors of about benefit transactions premium in supplement. on And property I've is as at market something commercial of the meetings value. bit progress three those The and that of with look stat that's good growth in-force the attention improvement

John Barnidge

going actually in then benefits quarter. a it loss little anything but with first be sticking Is deteriorated ratio, Group wonkiness? And the know there's I at Life is the two year-over-year, it's just look last if can quarter-to-quarter, quarters, employee and wonky, I bit, it in there there improved the on quarter second or but third it a quarterly

Rod Martin

ended standpoint. than We that’s a sort talked the quarter. better usual up seasonality having in We just of first word been use the wonkiness. I’ll from

saw into and emerge we moved quarter, May in we As June. April, things second but then

of standard. a the is little go been would but But wonkiness And it year back confidence this a say timing being so, I the it, description impact things doesn't to fair bit has the of in just of the probably again outside to range.

Operator

the of Andrew question line coming Credit with your next proceed Our Kligerman is question. with Suisse. from Please

Andrew Kligerman

Thank you for taking question. my

of First one is RBC on this XXX%. target

So, variable you've the block. annuity divested of

mean You've I in or the business run-off, that could XXX% XXX%? right maybe so number, to is you now put get Life XXX% the lower

Mike Smith

now, Andrew, thanks question. for the with XXX%. comfortable we're Right

new reform on post in factors. that’s discussed there we've the formula, - new to having effect think question tax calls and those the prior subsequent a of is approach the impact I the what with is as As the right

target, do. changes aligning we’ll noted, And changing. that with you announced observing their a Life be but still would overall, business on decision targets peers perspective. business and we rating we need we objectives. about where from target, continue our nothing gaining that night evaluate our We’re to there that that ratings what RBC our is but information manage that I you from is to that business say and think And accord the know business last with conversations in agencies with the mix correctly changes as

Andrew Kligerman

the do think is once that's think assess time? point I I year. I going take mean mean you relatively you mentioned I or mean from this impact last soon you RBC that you XX a kind tax something on to decision make of legislation could

Mike Smith

at think, that's now just and what right - it look, we Well, we're decision every a have I holding XXX.

I end we'll a we'll reach quarter from sometime or to decide the to it or an conclusion of from there's change there. run us - the We're consider opportunity by think and for so. the a next hoping year

Andrew Kligerman

lastly, employer a is there on of that an passing one is Voya XX.X. order lot that thinking that minimum then your distribution How even of Congress business? - plans. you so would another there's there's impact and would past the importantly there's and required more about know potential legislation the out And And potential multiple legislation on extending age how executive in

Charlie Nelson

Charlie is and This Nelson, thanks.

way I to and bit of pleased I is branches. going We be kind kind workplace and a legislation think a supportive it's really really to at that. you've gap we’re in our the through both in probably actions be of There's going encouraged. a of are the impact America to XXXX identified think certainly to beyond and that evolving any legislation strength. think It in in to don't is early to number very significant appears regulatory whether respond specific really be It's But moving proposals things the the paces legislative coverage regulatory or plan. as of that retirement I address differing

small-mid the If coverage about you areas issue think strength address. the this trying our to that’s is corporate, in a

the PEO professional hear you about organizations, multiple may or or terms. employer these Secondly, employment MAP those they're talking as plans

We these do it fits those types with have so really, of us. capabilities really today, well today. plans We

you as the address we of coverage go operate all we markets in expansive think those in about speak market we to well a in think in really our distribution, I the retirement Voya, take And we optimize are help of poised and with America. sub-segments advantage know, we issue and really that through. various and

too a that minimum age in great that the ultimately assets of bring Now, up protect it when that another you is and and age, the their and of issue when save is the we're address retirement anything you invest helps in retirement plan withdrawal - supportive extending thing. people good the you very and opportunity or terms distribution keep

long-termed how we a do. actually terms comment electronic then and further ahead well. need your electronic is one. in think We limit as on us We're up have good regulations an more to little the regulations So, bit And delivery, actually interesting on they'll delivery that our that's much benefits we can the capabilities. of and to catch

operational will these So coverage, help drive people customers we're I improve through ultimately and all think both and regulatory legislative very that more delivery. efficiency supportive actions of save and the of electronic for experience

Operator

Autonomous Please line question Bass with with proceed next your coming Eric the Our is Research. of from question.

Eric Bass

drivers For as there can flows XX% get markets to pull little by is and bit you well? investment more the relying color or a to management, there a And XXXX? to other on you get are levers provide pre-tax margin can on that that

Christine Hurtsellers

XX had interest we’ve cash seen you’ve high and management flows. of investment at positive look consecutive quarters you when Certainly,

is organic strong. our So, growth

Our strong. pipeline is

it’s the lot Just think a we low think we management management, we back so of operating on real fixed performance, organic in the two to again commercial differentiated income the what get growth over active next the is just the we’re of overall years. in XXs - to of to have play about asset three our relying asset estate, equity, XXs that strength strategies. space do the private diversity Think margin

Eric Bass

your for cash free plan million mean for level context strong the that how if interpret company? about flow I then in generation buyback $XXX in capital excess the of at And arrived should so, management, $XXX baseline the capital you on the as of XXXX? the can talk million we authorization you

Rod Martin

Rod. it’s Yes,

the the of You authorization most the by the We’ve should share secured previously, year. all board. it we just have from current which interpret as of billion $X contributed end to the authorizations of got buyback

and what’s doing we’re not be We’re that. we have $XXX brings the specific into and at XXXX we’ve point. back go we discussions remaining The going to And we’re quarter. that the that to fourth this that million the board we’re will more have utilized beyond them once utilize million with us in going that $XXX to

Operator

Sachs. your question. proceed is question of Goldman Please Alex from next line Scott with coming with Our the

Alex Scott

on And - the re-insurance, is this kind were question you I if the the through on what that's led - of of from Life some some this guess wondering sort of point to things know the to these sort pricing of like some to just had around guess, process, the led just I industry? And any you, one I guess sort gone you specifically more having of color just pressure Insurance of any strategic that review. was as it runoffs the more so and assumptions? of what see share around could I I this being you driver recaptures? for forth

Rod Martin

block I'm - pretty XX I'd let's clear but on specifically seen industry - have business XX that above. ago, that see years and in improvement led that for aged or general, and of to, mortality would XX about where premium other in industry and increases time the people we rate say of reinsurance generally others talk we've underwritten cases at what in referring to you're price relates recaptures, a seen in right. you're not That the increases increase that if to Alex, reinsurance to the then So either that overestimated years the was referring quite the have

than was And out those has happened those as meaningfully actual what mortality time been the is have what's back that higher turned products so over reinsurance arrangements then. and aged, it's expected that observed

would the this taken. are by affected And the led - reiterate reinsurers have I'll particular repricing that that activity block. and companies to we're be so through that of significant subsequent now the actions that's all seeding

but us, that foreseeable for guarantees, for chunk think no it’s the pretty we’re for We And future. so can foreseeable the of the future. seen most done we’ve we comfortable it significant offer

Alex Scott

And terms are assuming expected of actions your pricing will it of increases attention or on for any I the with difficult or is in as side, there of guide from from the any of this insurance of sort been highlighted that part that of some recently? mean anything like is focused meaning the, that that I doing more cost flows those be that's guess you've sorts action anticipated impact there cash business,

Rod Martin

increases. have taken COI part limited done of in fairly block, we some fee the some on actions have So a past but the and we other

nothing there's made our promises while pursue that it's need something that that continue in projections satisfy cost That block, cash value us of we the assumes the we'll insurance the to forward, we've to policyholders. get to as attending increase. option Going seek maximize a to to the of flow explicitly our remains for and we'll viable

Operator

The the question your with next of line is coming John with UBS. from question. Nadel Please proceed

John Nadel

$XXX expensive for picture coming I housekeeping one Mike, that quarter have $XXX third the you, out to relative quarter third items maybe a where of in one to of are you couple Rod. of and the of million then bigger target, XXXX? million

Mike Smith

a making really good we’re John, progress.

that of you last which sales think would million the see million basis, so an $XX can top on basis, in was run about I was quarterly where what talked $XX of $XX a - the rate mainly sales I of save. of quarterly about million had annualized, additional $X segment on quarter, a that’s there $XX attribute million a corporate on million we

well then that, be we ahead we're great may have of we'll on us and more way. Day. that our will achieve confidence talk I what at about Investor So,

John Nadel

$XX that one doing pretty on basis below outflows record the pre-tax would that the points It the basis just in of single-digit earnings. X the millions of second appear X.X then, is particular piece math or general. for just And significantly keeping keeping is on business and record points your the low rate fee billion business impact

on should be left after to this actually higher? So, expecting fee slightly rate we be the what's outflow

Charlie Nelson

those are The retention from see fees, is for be first business. sales us success happens plans side to look business that one particular, at a the it record in keeping good as side. important at we And of is year. and an this you And leading the across - in the

you tend see to a larger kind will time quarter-to-quarter of you as little over the manage we noise not So, if period, from plans, necessarily quarter-to-quarter. longer these it bit of of a kind

John Nadel

the to third then business free life XXX%? Is cash now, just in difference for it statutory earnings? the XX% runoff flow just and between earnings And Mike, XX% one, GAAP why isn't that the

Mike Smith

difference GAAP up In a to a a build stat. between slope, second It right. actuarial be on and short, different is for - different yes. reverse just the The is

earnings. of I that I this soon time see happens, GAAP. It's up before and are presumably you’ll to So, stat and any and its flow actually GAAP block. don't time, that’s on the over number reserves think cash Eventually, to faster not that should going building reverse happen actually a be than stat years should going think. exceed

John Nadel

And bigger one, Rod. you the for the last then picture one

with respect attractiveness I of valuation you to the So, with agree the clearly and stock of buyback. the

a levels? I in years. relative real hinting little be ahead dividend been money X, normalize think of the than been You've more at to the of But may a several bit there to shareholder as here maybe away of from it's is the funds you Phase look it to to spending new where the any attract stock, last these reason buybacks divert at kind other valuation common

Rod Martin

great question. fair a a It’s and question

is for Day. weeks answer Investor stay me at But you let level tuned with high two the So, leave the theme. a

authorization fourth million excess million uses The the $XXX of to of repurchases thoughtful that continue will significant continue going a secured is to our We quarter, our that just be to be in the capital. $XXX source shares. we of

talked about we're have not We on prepared and call. this

$X track was is for value and billion what this when public speaks a our I for we will But an we've that's the been the levels, appropriately particularly two shareholders record We accomplishment. these significant went cap with market our we to think we is think and update to a all at Investor and because itself. time weeks’ address quite our we'll dividend the and at Day. will what in do stock equal give I asked pretty asked great think repurchasing you

Operator

the Our Please questions. next from your comes & Partners. proceed Humphrey with line Lee of question with Dowling

Humphrey Lee

for further come retirement, room did these to of you was up the initiatives like G&A more how pick to in just improvement as off? much opposed you coming initiatives at benefits do continue Looking some expenses the I down from quarters? And then the expect spending expense for expense coming wondering your sequentially.

Charles Nelson

Thanks for noticing.

has last I on job done since in transformation the Day. fabulous team Investor in we've a that Our think been particular

to As efficiency. our have consolidation put drive ourselves the system on in and greater kind position done lot system of of a a also we operationally operating

as have. I by X%. since down think our in and well delivered about there's and costs Investor a be that unit our from you've time of some spending Day future at some we'll and initiatives I that drive as believe those that lot think about And that's then more a we more about areas seen, weeks. the before, in few talking increased XXXX talked and to we size We are through scale some about automation size digital we've opportunities participants our in power other XX% room opportunities

to-date So, our we And continued paid teams we technologically. both go forward. operationally got us continued we’ve to improve initiatives I and job do good and well think as our think some have room to a to

Humphrey Lee

inflows are hear to the outflows. And than then fee shifting gear investment for that management, I’m glad the to the rates better

how kind reclassification quarter should about in range and saw definitely few But yield My can of forward? sequentially, wondering I was up provide Investment you rates if but of of encouraging drop. revenue think of So quarter. is just some at the picked in the obviously color sign. understanding happened looking is kind fee the going kind investment that's terms assets, the kind metrics the what some assets some for of there we of of Management in

Christine Hurtsellers

reclassified Yes, we during the in or as sale this general external quarter on the Investment behalf you a account business, of see of from Management that supplement that portfolio portfolio. the sourced GA we line annuity to the result venerables their the client manage

the go down. business yield external client So just shift natural made revenue that

it's fee business about incredibly in of quarter-to-quarter. it and think forward, our again how going to context been to can see external client stable, is the it going you So, vary

below inflow quarter, were outflows. the fourth slightly the fees actually in So the

trailing to point as about you above again However, quarter. fourth a on expected we it out the XX-month be was basis, in

volatility So not like high to be versus there estate. make, going like something is commercial sell based think trend on we does some just real a quality quarter-to-quarter what about

about we're think portfolio, you again when back well operating the margin So, to our the positioned low XXs. regrow to

Humphrey Lee

reclassification. Just a follow about that on up the point

quarter-over-quarter so supplement, look reclassification didn’t is I but the trying to the the took place? general assets when where at change I’m So see then

Rod Martin

walk if can you Humphrey that it'll offline because better think one step-by-step. it through take we let's be I

Operator

Martin have there Mr. no comments? closing at you this Do questions you. any are additional Thank time.

Rod Martin

in risk our and Thank day. you you Yes. profile Investor continued long-term businesses favorable growth for you and on We I customers to a look to the see forward We light updating summary, Day hope new leveraging do. capital position that focused remain targets are future we workplace and growth the with on Voya our with there. Thank foothold operate We In our the deliver exposure. to to no care you. financial strong during third annuity return success. minimal good on XX. and higher seeking. quarter high plans with solutions at our institutions variable November We

Operator

Thank Ladies participation. and today's for your concludes conference. you gentlemen, this

Voya Financial (VOYA) 31 Oct 182018 Q3 Earnings call transcript