Voya Financial (VOYA) Q3 2024 earnings summary

Executive summary

• Wealth Solutions and Investment Management delivered strong results, with participant accounts exceeding 7 million and over $9 billion in net flows year-to-date in Investment Management, driving revenue and margin improvements.

• Health Solutions underperformed due to adverse stop-loss results and higher loss ratios, prompting active repricing and margin improvement initiatives for 2025.

• Net income available to common shareholders was $98 million for Q3 2024, down from $248 million in Q3 2023, mainly due to non-recurring tax benefits and investment gains last year.

• On track to close the acquisition of OneAmerica's retirement business on January 1, 2025, expected to add scale, strategic capabilities, and at least $75 million in pre-tax operating earnings in its first year.

• Continued strong free cash flow and capital return, with $800 million targeted for shareholders in 2024 and significant growth in excess capital generation anticipated for 2025.

Financial highlights

• Adjusted operating EPS for Q3 2024 was $1.90, up from $1.74 in Q3 2023, driven by nearly 20% growth in Wealth Solutions and over 10% in Investment Management.

• Fee revenues and premiums increased year-over-year in Wealth Solutions and Investment Management, supported by strong equity markets and commercial momentum.

• Net income for Q3 2024 was $98 million, down from $248 million in Q3 2023 due to non-recurring tax benefits and investment gains in the prior year.

• Wealth Solutions earnings up 18% year-over-year to $211 million; Investment Management earnings up to $55 million from $49 million; Health Solutions earnings down to $23 million from $53 million.

• Total assets reached $166.9 billion as of September 30, 2024, up from $157.1 billion at year-end 2023; AUM/AUA totaled $889.6 billion.

Outlook and guidance

• Prioritizing margin over premium growth in stop-loss, with substantial rate increases targeted for 2025 renewals and significant improvement in stop-loss margins and overall profitability expected in 2025.

• FY'24 adjusted operating EPS target is $8.25–$8.45; adjusted operating ROE target is 14–16%; net revenue growth target is 2–4%.

• OneAmerica acquisition expected to contribute at least $75 million in pre-tax operating earnings and over $200 million in net revenue in its first year.

• On track to return $0.8 billion of capital in FY'24; expect significant growth in excess capital generation in FY'25, driven by core business growth, OneAmerica contribution, and Health Solutions repricing.

• 4Q'24 guidance includes net underwriting gain in Health Solutions of $180–220 million, assuming Stop Loss loss ratio at 86%.