Voya Financial Inc
For the period ended Dec 31, 2024. Filed Feb 21, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 21, 2025
VOYA$99.01+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-23.
0001535929-24-000035
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-21.
0001535929-25-000017
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 442 previous paragraphs and 439 current paragraphs.
259 unchanged; 111 reworded; 66 added; 68 removed; 4 previous and 3 current paragraphs rearranged.
Tables are not compared: 46 previous and 47 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (66)
Current report
Our Health Solutions segment also provides benefits and plan administration services to employers and health plans through our Benefitfocus business. Benefitfocus provides market-leading benefits enrollment and administration services to employers and plan enrollment services to health plans. It also provides a benefits marketplace through which employees can select and enroll in voluntary benefits offered by their employers. Our Benefitfocus platform is open-architecture and product-agnostic, enrolling and administering benefits from a variety of third-party carriers.
Current report
In addition, we also provide decision support tools through the Benefitfocus enrollment platform and through our MyVoyage mobile application, which provides a comprehensive guidance tool for employees to see their entire financial picture including their workplace benefits and savings. We support employers by taking on the administrative burden of benefits enrollment and administration, leave management, COBRA administration, and other obligations.
Current report
On September 11, 2024, we entered into a definitive agreement to acquire the full-service retirement plan business of OneAmerica Financial through the purchase of legal entities and an indemnity reinsurance agreement. The acquisition adds scale and a broader set of capabilities to the Company's full-service business in Wealth Solutions, including incremental assets in emerging and mid-market segments, employee stock ownership plan capabilities, and opportunities for distribution partnerships. The transaction closed on January 2, 2025. The purchase consideration includes approximately $50 million in cash paid at closing and contingent consideration of up to $160 million based on plan persistency and transition incentives.
Current report
Net investment income decreased $85 million from $2,159 million to $2,074 million primarily due to:
Current report
Fee income increased $197 million from $1,916 million to $2,113 million primarily due to:
Current report
•higher fee income in Wealth Solutions driven by an increase in fee-based assets primarily due to higher average equity markets; and
Current report
•higher fee income in Investment Management benefiting from positive capital markets and business growth in the current period.
Current report
Premiums increased $459 million from $2,717 million to $3,176 million primarily due to:
Current report
Other revenue increased $96 million from $327 million to $423 million primarily due to:
Current report
•an increase in other interest income due to actions to increase the yield on cash balances; and
Current report
•performance fees realized in Investment Management.
Current report
•the absence of transition services agreements revenue recognized in the prior period associated with the Individual Life Transaction that occurred in 2021.
Current report
•an increase in benefits to policyholders in Health Solutions due to adverse claims experience, including a higher loss ratio for Stop Loss and higher claims in Voluntary products due to greater utilization of benefits; and
Current report
•in-force business growth in Health Solutions.
Current report
•lower interest credited in Wealth Solutions primarily due to lower spread-based assets, partially offset by a higher crediting rate;
Current report
•a favorable change from the annual assumption update in Health Solutions; and
Current report
•a litigation reserve recorded in the prior period within businesses exited.
Current report
Operating expenses decreased $14 million from $3,096 million to $3,082 million primarily due to:
Current report
•actions to efficiently manage spend;
Current report
•the absence of closing costs incurred in the prior period and lower integration costs associated with recent acquisitions in the current period;
Current report
•a larger net actuarial gain related to pension and other postretirement benefit obligations recorded in the current period. For further information, see Critical Accounting Judgements and Estimates - Employee Benefits Plansin Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of this Annual Report on Form 10-K;
Current report
•the absence of costs incurred in the prior period which supported the remaining transition services agreements related to the Individual Life Transaction;
Current report
•lower severance costs incurred in the current period; and
Current report
•the absence of an impairment recorded in the prior period related to a vacated leased building.
Current report
•an increase in operating segment expenses driven by growth and investments in our business; and
Current report
Income Tax Expense/Benefit
Current report
Income tax expense/benefit changed $108 million from a benefit of $51 million to an expense of $57 million primarily due to:
Current report
•a decrease in noncontrolling interest.
Current report
The change was partially offset by:
Current report
•the absence of a litigation reserve recorded in the prior period.
Current report
•the absence of closing costs incurred in the prior period and lower integration costs associated with recent acquisitions in the current period;
Current report
•a larger net actuarial gain related to pension and other postretirement benefit obligations recorded in the current period;
Current report
•lower severance costs incurred in the current period; and
Current report
•the absence of an impairment recorded in the prior period related to a vacated leased building.
Current report
•the absence of a net favorable adjustment to acquisition-related assets and liabilities recorded in the prior period and the write-off of management contract rights associated with a prior acquisition in the current period; and
Current report
•one-time expenses in the current period not indicative of ongoing performance related to a write-off of previously capitalized costs associated with an internal technology project which is no longer being pursued and a guaranty fund assessment, net of premium tax benefits.
Current report
(1) Other assets includes other guaranteed payout products and non-qualified retirement plans.
Current report
The following table presents Total Client Assets by source of earnings, which comprise total AUM and AUA, for our Wealth Solutions segment as of the dates indicated:
Current report
(1)Spread-based client assets includes a portion of Full Service, as well as proprietary IRA mutual fund products and other guaranteed payout products.
Current report
Adjusted operating earnings before income taxes increased $188 million from $632 million to $820 million primarily due to:
Showing the first 40 of 66 passages. Open the source sections for the rest.
Removed paragraphs (68)
Previous report
On July 25, 2022, we completed a series of transactions pursuant to a Combination Agreement dated as of June 13, 2022 (the "AllianzGI Agreement") with Voya Investment Management LLC ("Voya IM") and VIM Holdings LLC ("VIM Holdings"), both our indirect subsidiaries, Allianz SE ("Allianz") and Allianz Global Investors U.S. LLC ("AllianzGI"), an indirect subsidiary of Allianz, pursuant to which the parties have combined Voya IM with assets and teams comprising specified strategies previously managed by AllianzGI. Following the transaction, we hold, indirectly, a 76% interest in VIM Holdings and operate the business, while Allianz holds, indirectly, the remaining 24%. The transaction increased Voya IM's AUM by approximately 40%. The acquisition has increased Voya IM's international scale and distribution and provides it with new investment strategies that help us meet the needs of a larger and more global client base. We incurred $68 million and $67 million of transaction and integration expenses, primarily related to this transaction for the years ended December 31, 2023 and 2022, respectively. We expect to incur additional integration expenses in future periods. These expenses include consulting, legal and business integration expenses and are recorded in Operating expenses in the period they are incurred. These expenses are classified as a component of Other adjustments to Income (loss) before income taxes and consequently are not included in the adjusted operating results of our segments.
Previous report
(1)Effective Q1 2023, includes asset balances associated with non-qualified retirement plans for clients using only our non-qualified solutions. Historical periods presented have been recast to conform with this change.
Previous report
Net investment income decreased $122 million from $2,281 million to $2,159 million primarily due to:
Previous report
•lower alternative investment and prepayment fee income in the current period primarily driven by overall market performance.
Previous report
•higher investment income on short-term investments due to interest rate movements.
Previous report
Fee income increased $174 million from $1,742 million to $1,916 million primarily due to:
Previous report
•higher fee income in Investment Management primarily due to the addition of the AllianzGI business and market appreciation, partially offset by net outflows; and
Previous report
•higher fee income in Wealth Solutions primarily driven by market appreciation and business growth, partially offset by a reduction in the average fee rate.
Previous report
Premiums increased $294 million from $2,423 million to $2,717 million primarily due to:
Previous report
•favorable equity security performance due to higher equity markets in the current period; and
Previous report
Other revenue increased $179 million from $148 million to $327 million primarily due to:
Previous report
•higher other revenue in Health Solutions primarily driven by the Benefitfocus acquisition.
Previous report
•lower revenue from transition services agreements associated with the Individual Life transaction.
Previous report
•higher benefits incurred in Health Solutions due to growth in in-force business and an unfavorable change due to the annual assumption update;
Previous report
•higher participant crediting rates in Wealth Solutions due to higher interest rates.
Previous report
•a lower loss ratio in stop loss and absence of COVID-19 impacts in the current period in Health Solutions; and
Previous report
•a lower litigation reserve in the current period compared to the prior period in Businesses exited.
Previous report
Operating expenses increased $554 million from $2,542 million to $3,096 million primarily due to:
Previous report
•an increase in Health Solutions expenses primarily driven by the acquisition of Benefitfocus and business growth;
Previous report
•an increase in Investment Management expenses primarily driven by the addition of the AllianzGI business;
Previous report
•an increase in Wealth Solutions expenses driven by business growth;
Previous report
•an increase in the amortization of intangible assets associated with acquisitions;
Previous report
•an increase in the deferred compensation plan liability due to equity market movements; and
Previous report
•higher severance accruals in the current period.
Previous report
•lower incentive compensation in Corporate.
Previous report
•increase in collateralized loan obligations interest costs due to higher rates and a new fund launch; and
Previous report
Income Tax Benefit
Previous report
Income tax benefit increased $46 million from $5 million to $51 million primarily due to:
Previous report
•a change in noncontrolling interest; and
Previous report
•tax credits claimed in 2022 related to tax years 2012 - 2017.
Previous report
•net unfavorable market value changes on embedded derivatives primarily due to interest rate movements.
Previous report
•a lower litigation reserve in the current period compared to the prior period; and
Previous report
•a favorable change in the allowance for credit losses on reinsurance recoverable.
Previous report
•an increase in the amortization of intangible assets associated with acquisitions; and
Previous report
•higher severance accruals in the current period.
Previous report
(1) Includes asset eliminations which were previously reported in Recordkeeping and Retail Client Assets. Historical periods presented have been recast to conform with this change.
Previous report
(1)Includes asset eliminations which were previously reported in Recordkeeping and Retail Client Assets. Historical periods presented have been recast to conform with this change.
Previous report
(2) Effective Q1 2023, includes asset balances associated with non-qualified retirement plans for clients using only our non-qualified solutions. Historical periods presented have been recast to conform with this change.
Previous report
Adjusted operating earnings before income taxes decreased $65 million from $697 million to $632 million primarily due to:
Previous report
•higher expenses primarily driven by business growth;
Showing the first 40 of 68 passages. Open the source sections for the rest.
Reworded paragraphs (111)
Previous wording
The following discussion and analysis presents a review of our results of operations for the years ended December 31, 2023 and 2022, and financial condition as of December 31, 2023 and 2022. This item should be read in its entirety and in conjunction with the Consolidated Financial Statements and related notes contained in Part II, Item 8. of this Annual Report on
Current wording
The following discussion and analysis presents a review of our results of operations for the years ended December 31, 2024 and 2023, and financial condition as of December 31, 2024 and 2023. This item should be read in its entirety and in conjunction with the Consolidated Financial Statements and related notes contained in Part II, Item 8. of this Annual Report on Form 10-K. For discussion and analysis of our results of operations for the years ended December 31, 2023 and 2022, refer to our 2023 Annual Report on Form 10-K filed with the SEC on February 23, 2024.
Previous wording
We are a leading provider of workplace benefits and savings solutions and technologies to U.S. employers, enabling better financial outcomes for their employees and for those who depend on their employees through our retirement solutions, retail wealth services, and comprehensive portfolio of benefits products. We are also a leading international asset manager, built on a foundation of institutional-quality fixed income and private asset strategies, with a well-established presence in U.S. markets and a large and growing business managing retail and institutional equity, fixed income, and blended strategies for clients in Europe and Asia.
Current wording
We are a leading provider of workplace benefits and savings solutions and technologies to U.S. employers, enabling better financial outcomes for their employees and for those who depend on their employees through our retirement solutions, retail wealth services, and a comprehensive portfolio of benefits products. We are also a leading international asset manager, built on a foundation of institutional-quality fixed income and private asset strategies, with a well-established presence in U.S. markets and a large and growing business managing retail and institutional equity, fixed income and blended strategies for clients in Europe and Asia.
Previous wording
Since Voya’s IPO in 2013, we have evolved through the divestiture of substantially all of our closed block variable annuity, life insurance and legacy non-retirement annuity businesses and related assets. These divestitures align with our strategic focus on higher-return, capital-light businesses, while maximizing the capital returned to our shareholders. As a result, we have returned approximately $9.3 billion of capital to our shareholders since our IPO through share repurchases and dividends, while making strategic investments in Workplace Solutions and Investment Management.
Current wording
We have evolved as a company through the divestiture of substantially all of our closed block variable annuity, life insurance and legacy non-retirement annuity businesses and related assets. These divestitures align with our strategic focus on a capital light, high free cash flow business that maximizes value for our shareholders through capital return and accelerated profitable revenue growth while proactively managing risk. We have returned approximately $800 million of capital to our shareholders through share repurchases and dividends and generated excess capital of approximately $650 million during 2024, while making strategic investments in our Workplace Solutions and Investment Management businesses.
Previous wording
We are focused on executing our mission to make a secure financial future possible—one person, one family and one institution at a time. Voya’s scale, business mix, risk profile, and strong free cash flow generation are competitive differentiators, and we have a clear path to Adjusted Operating Earnings Per Share growth via net revenue growth, margin expansion, and disciplined capital management. We provide our products and services principally through our Workplace Solutions business, which encompasses both our Wealth Solutions and Health Solutions business segments, and through our Investment Management segment.
Current wording
We are focused on executing our mission to make a secure financial future possible—one person, one family and one institution at a time. Voya’s scale, business mix, risk profile, and strong free cash flow generation are competitive differentiators, and we have a clear path to increasing free cash flow generation and Adjusted operating earnings growth via net revenue growth, margin expansion, and disciplined capital management. We provide our products and services principally through our Workplace Solutions business, which encompasses both our Wealth Solutions and Health Solutions business segments, and through our Investment Management segment.
Previous wording
Our Wealth Solutions segment provides retirement plan solutions and administration technology and services to employers. These products and services include full-service and recordkeeping-only defined contribution plan administration, stable value and fixed general account investment products; non-qualified plan administration; and tools, guidance, and services to promote the financial well-being and retirement security of employees. We also provide individual retirement accounts and financial guidance and advisory services that enables us to deepen relationships with our retirement plan participants.
Current wording
Our Wealth Solutions segment provides retirement plan solutions and administration technology and services to employers. These products and services include full-service and recordkeeping-only defined contribution plan administration, stable value and fixed general account investment products, and non-qualified plan administration. It also includes tools, guidance, and services to promote the financial well-being and retirement security of employees. Additionally, we provide individual retirement accounts and financial guidance and advisory services that enables us to deepen relationships with our retirement plan participants.
Previous wording
Our Wealth Solutions segment earns revenue from a diverse and complementary business mix, primarily fee income from asset based and participant based administrative, recordkeeping and advisory fees as well as investment income on our general account assets and other funds. Because a significant portion of our revenues are tied to account values, our profitability is determined in part by the amount of assets we have under management, administration or advisement, which in turn depends on sales volumes to new and existing clients, net deposits from retirement plan participants, and changes in the market value of account assets. Our profitability also depends on the difference between the investment income we earn on our general account assets, or our portfolio yield, and crediting rates on client accounts.
Current wording
Revenue is earned from a diverse and complementary business mix and consists primarily of fee and investment income. Fee income is generated from asset based and participant based administrative, recordkeeping and advisory fees. Investment income derives from our general account assets and other funds. Because a significant portion of our revenues is tied to account values, our profitability is determined in part by the amount of assets we have under management, administration or advisement. This in turn depends on sales volumes to new and existing clients, net deposits from retirement plan participants, asset retention, and changes in the market value of account assets. Our profitability also depends on the difference between the investment income we earn on our general account assets, or our portfolio yield, and crediting rates on client accounts.
Previous wording
Our Health Solutions segment provides worksite employee benefits, Health Account Solutions (Health Savings Account ("HSA")/Flexible Spending Account ("FSA")/Health Reimbursement Arrangements ("HRA") and COBRA administration), leave management, financial wellness and decision support products and services to mid-size and large corporate employers and professional associations as well as benefits administration. In addition, our Health Solutions segment provides stop-loss coverage to employer plan sponsors that self-fund their pharmaceutical and medical benefits.
Current wording
Our Health Solutions segment provides worksite employee benefits, Health Account Solutions (Health Savings Account ("HSA")/Flexible Spending Account ("FSA")/Health Reimbursement Arrangements ("HRA") and COBRA administration), leave management, financial wellness, and decision support products and services to mid-size and large corporate employers and professional associations. In addition, our Health Solutions segment serves the employer market by providing stop-loss coverage to employer plan sponsors that self-fund their pharmaceutical and medical benefits plans.
Previous wording
Our Health Solutions segment generates revenue from premiums and fees, investment income, mortality and morbidity income and policy and other charges. Underwriting income comprises the majority of revenues in this segment and derives from the difference between premiums and mortality charges collected and benefits and expenses paid for group life, stop loss and voluntary benefits. Fee income is generated from margin on expenses for services provided on benefits administration, leave management, HSA/FSA/HRA and COBRA administration and proprietary decision support tools. Investment income is driven by the spread between investment yields and credited rates (the interest and income that is credited to the policies) to policyholders on voluntary universal life, whole life products, and HSA invested assets.
Current wording
The Health Solutions segment generates revenue from premiums and fees, investment income, mortality and morbidity income, and policy and other charges. Underwriting income comprises the majority of revenues in this segment and derives from the difference between premiums and mortality charges collected and benefits and expenses paid for group life, stop loss and voluntary benefits. Fee income is generated from services provided on benefits administration, leave management, HSA/FSA/HRA and COBRA administration and proprietary decision support tools. Investment income is driven by the spread between investment yields and credited rates (the interest and income that is credited to the policies) to policyholders on voluntary universal life, whole life products, and HSA invested assets, as well as the spread earned on policyholder reserves and target surplus.
Previous wording
Our Investment Management segment serves both individual and institutional customers, offering them domestic and international fixed income, equity, multi-asset and alternative investment products and solutions across a range of geographies, investment styles and capitalization spectrums. We aim to provide positive investment results that are repeatable and consistent, and deliver research-driven, risk-adjusted, client-oriented investment strategies and solutions and advisory services.
Current wording
With global distribution capabilities, we offer domestic and international fixed income, equity, alternatives and multi-asset products and solutions across market sectors and investment styles through our actively managed, full-service investment management business. We aim to provide positive investment results that are repeatable and consistent, and deliver research-driven, risk-adjusted, client-oriented investment strategies and solutions and advisory services across asset classes, geographies and investment styles.
Previous wording
Through our institutional distribution channel and our Workplace Solutions business, we serve a variety of institutional clients, including public, corporate and multiemployer defined benefit and defined contribution retirement plans, endowments and foundations, and insurance companies. We are a market leader in providing third-party general account management services to insurance companies, with a focus on public and private fixed income asset strategies, and a client service model adapted for the particular needs of insurance company clients. We also serve individual investors by offering our mutual funds, separately managed accounts, and private and alternative funds through an intermediary-focused distribution platform or through affiliate and third-party retirement platforms. Our scaled and growing international retail business is conducted through sub-advisory agreements with investment vehicles sponsored by affiliates and distributed in Europe and Asia.
Current wording
Through our institutional distribution channel and our Workplace Solutions business, we serve a variety of institutional clients, including public, corporate and multiemployer defined benefit and defined contribution retirement plans, endowments and foundations, and insurance companies. We are a market leader in providing third-party general account management services to insurance companies, with a focus on public and private fixed income asset strategies, and a client service model adapted for the particular needs of insurance company clients. We also serve individual investors by offering our mutual funds, separately managed accounts, and private and alternative funds through an intermediary-focused distribution platform or through affiliate and third-party retirement platforms. Our scaled and growing international retail business is conducted through sub-advisory agreements with investment vehicles sponsored by affiliates of AllianzGI and distributed in Europe and Asia.
Previous wording
Our Investment Management segment generates revenue through the collection of management fees on the assets we manage. These fees are typically based upon a percentage of AUM. In certain investment management fee arrangements, we may also receive performance-based incentive fees when the return on AUM exceeds certain benchmark returns or other performance hurdles. In addition, and to a lesser extent, Investment Management collects administrative fees on outside managed assets that are administered by our mutual fund platform and distributed primarily by our Wealth Solutions segment. Investment Management also receives fees as the primary investment manager of our general account, which is managed on a market-based pricing basis. Finally, Investment Management generates revenues from a portfolio of seed capital investments, collateralized loan obligations and various funds.
Current wording
Investment Management’s primary source of revenue is management fees collected on the assets we manage. These fees are typically based on a percentage of AUM. In certain investment management fee arrangements, we may also receive performance-based incentive fees when the return on AUM exceeds certain benchmark returns or other performance hurdles. In addition, and to a lesser extent, Investment Management collects administrative fees on outside managed assets that are administered by our mutual fund platform and distributed primarily by our Wealth Solutions segment. Investment Management also receives fees as the primary investment manager of our general account, which is managed on a market-based pricing basis. Finally, Investment Management generates revenues from a portfolio of seed capital investments in private equity, collateralized loan obligations and various funds.
Previous wording
On August 1, 2023, we acquired all remaining equity interest in VFI SLK Global Services Private Limited previously held by SLK Software Private Limited ("SLK") and renamed the entity as Voya Global Services Private Limited ("Voya India"). Voya India was a private limited company in India formed pursuant to a joint venture agreement between us and SLK on August 1, 2019, with us and SLK holding 49% and 51% of ownership shares, respectively. The purpose of Voya India is to provide technology and business operation services to us. As a result of the acquisition, Voya India has become a wholly owned subsidiary of us and provides us with improved strategic and operational flexibility.
Current wording
On August 1, 2023, we acquired all remaining equity interest in VFI SLK Global Services Private Limited previously held by SLK Software Private Limited ("SLK") and renamed the entity as Voya Global Services Private Limited ("Voya India"). Voya India was a private limited company in India formed pursuant to a joint venture agreement between us and SLK on August 1, 2019, with us and SLK holding 49% and 51% of ownership shares, respectively. The purpose of Voya India is to provide technology and business operation services to us. As a result of the acquisition, Voya India has become a wholly owned subsidiary and provides us with improved strategic and operational flexibility. As part of the purchase consideration, an upfront payment of $53 million was made at closing. We recorded a gain of $45 million in relation to the revaluation of the existing investment in Voya India which was recorded in Net gains (losses) in the Consolidated Statements of Operations for the year ended December 31, 2023. Net assets acquired as part of this transaction included goodwill of $102 million.
Previous wording
On January 24, 2023, we completed the acquisition of Benefitfocus, Inc. ("Benefitfocus"), an industry-leading benefits administration technology company that serves U.S. employers, health plans and brokers for a total purchase price consideration of $595 million. The acquisition has expanded the Company’s capacity to meet the growing demand for comprehensive benefits and savings solutions and increases its ability to deliver innovative solutions for employers and health plans. In connection with the acquisition, we have incurred $37 million of integration expenses for the year ended December 31, 2023 and expect to incur additional integration expenses in the future. These expenses include severance, consulting and business integration expenses and are recorded in Operating expenses in the period they are incurred. These expenses are classified as a component of Other adjustments to Income (loss) before income taxes and consequently are not included in the adjusted operating results of our segments.
Current wording
On January 24, 2023, we completed the acquisition of Benefitfocus, an industry-leading benefits administration technology company that serves U.S. employers, health plans and brokers for a total purchase consideration of $595 million. Benefitfocus helps organizations simplify the complexity of benefits administration. Benefitfocus solutions have a personalized user-friendly interface designed for people to choose and access a broad line-up of workplace benefits. In connection with the acquisition, we incurred $3 million and $37 million of integration expenses for the years ended December 31, 2024 and 2023, respectively. These expenses include severance, consulting and business integration expenses and are recorded in Operating expenses in the period they are incurred. These expenses are classified as a component of Other adjustments to Income (loss) before income taxes and consequently are not included in the adjusted operating results of our segments.
Previous wording
Extraordinary monetary accommodation to support a global economy negatively impacted by the pandemic is being unwound. Inflationary pressures related to easy monetary and fiscal policies, and the stagflationary impacts of the Russia-Ukraine war and global supply chain frictions, have been addressed by sharply tighter monetary policy. As the continued impact of sharply tighter global monetary policy works through the real economy, an increase in market volatility could affect our business, including through effects on the rate and spread component of yields we earn on invested assets, changes in required reserves and capital, and fluctuations in the value of our AUM and AUA. These effects could be exacerbated by uncertainty about future fiscal policy, changes in tax policy, the scope of potential deregulation, levels of global trade, and geopolitical risk. In the short- to medium-term, the potential for increased volatility and slowing economic growth can pressure sales and reduce demand as consumers hesitate to make financial decisions. Financial performance can be adversely affected by market volatility as fees driven by AUM fluctuate, hedging costs increase and revenue declines due to reduced sales and increased outflows. As a company with strong retirement, investment management and insurance capabilities, however, we believe the market conditions noted above may, over the long term, enhance the attractiveness of our broad portfolio of products and services. We will need to continue to monitor the behavior of our customers and other factors, including mortality rates, morbidity rates, and lapse rates, which adjust in response to changes in market conditions in order to ensure that our products and services remain attractive as well as profitable. For additional information on our sensitivity to interest rates and equity market prices, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K.
Current wording
Inflationary pressures related to easing monetary and fiscal policies, stagflationary, and global supply chain frictions, have been addressed by sharply tighter monetary policy. As the continued impact of sharply tighter global monetary policy works through the real economy, an increase in market volatility could affect our business, including through effects on the rate and spread component of yields we earn on invested assets, changes in required reserves and capital, and fluctuations in the value of our AUM and AUA. These effects could be exacerbated by uncertainty about future fiscal policy, changes in tax policy, the scope of potential deregulation, levels of global trade, and geopolitical risk. In the short- to medium-term, the potential for increased volatility and slowing economic growth can pressure sales and reduce demand as consumers hesitate to make financial decisions. Financial performance can be adversely affected by market volatility as fees driven by AUM fluctuate, hedging costs increase and revenue declines due to reduced sales and increased outflows. As a company with strong retirement, investment management and insurance capabilities, however, we believe the market conditions noted above may, over the long term, enhance the attractiveness of our broad portfolio of products and services. We will need to continue to monitor the behavior of our customers and other factors, including mortality rates, morbidity rates, and lapse rates, which adjust in response to changes in market conditions in order to ensure that our products and services remain attractive as well as profitable. For additional information on our sensitivity to interest rates and equity market prices, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K.
Previous wording
•Our general account investment portfolio, which was approximately $36 billion as of December 31, 2023, consists predominantly of fixed income investments. At prevailing interest rate levels, new money investments or reinvestment of proceeds from maturities and asset paydowns are likely to be accretive to the overall portfolio earned rate. Higher interest rates, however, also reduce the prices of fixed income investments and the proceeds of bonds that are sold before maturity in the secondary market.
Current wording
•Our general account investment portfolio, which was approximately $34.7 billion as of December 31, 2024, consists predominantly of fixed income investments. At prevailing interest rate levels, new money investments or reinvestment of proceeds from maturities and asset paydowns are likely to be accretive to the overall portfolio earned rate. Higher interest rates, however, also reduce the prices of fixed income investments and the proceeds of bonds that are sold before maturity in the secondary market.
Previous wording
For additional information on the impact of the interest rate environment, see The level of interest rates may adversely affect our profitability, particularly during a period of rapidly increasing interest rates or in the event of a recurrence of a low interest rate environment in Risk Factors in Part I, Item 1A. of this Annual Report on Form 10-K. Also, for additional information on our sensitivity to interest rates, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K.
Current wording
For additional information on the impact of the interest rate environment, see The level of interest rates may adversely affect our profitability, particularly during a period of rapidly increasing interest rates or in the event of a recurrence of a low interest rate environmentin Risk Factors in Part I, Item 1A. of this Annual Report on Form 10-K. Also, for additional information on our sensitivity to interest rates, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K.
Previous wording
•The fourth quarter of each year tends to have higher Voluntary Claims. This seasonality is generally driven by policyholders reassessing past incidents at the end of the year and during annual open enrollment.
Current wording
•The fourth quarter of each year tends to have higher Voluntary Claims. This seasonality is generally driven by policyholders reassessing past incidents at the end of the year and during annual open enrollment. Adjustments are made in the incurred but not reported reserve to address seasonal effects.
Previous wording
AUM includes general account assets managed by our Investment Management segment in which we bear the investment risk and separate account assets in which the contract owner bears the investment risk and institutional/mutual funds, which are excluded from our balance sheets. AUM-based revenues increase or decrease with a rise or fall in the amount of AUM, whether caused by changes in capital markets or by net flows. AUM is principally affected by net deposits (i.e., new deposits, less surrenders and other outflows) and investment performance (i.e., interest credited to contract owner accounts for assets that earn a fixed return or market performance for assets that earn a variable return). Separate account AUM and institutional/mutual fund AUM include assets managed by our Investment Management segment, as well as assets managed by third-party investment managers. Our Investment Management segment reflects the revenues earned for managing affiliated assets for our other segments as well as assets managed for third parties.
Current wording
AUM includes general account assets managed by our Investment Management segment in which we bear the investment risk, separate account assets in which the contract owner bears the investment risk, and off-balance sheet institutional/mutual funds. AUM-based revenues increase or decrease with a rise or fall in the amount of AUM, whether caused by changes in capital markets or by net flows. AUM is principally affected by net deposits (i.e., new deposits, less surrenders and other outflows) and investment performance (i.e., interest credited to contract owner accounts for assets that earn a fixed return or market performance for assets that earn a variable return). Separate account AUM and institutional/mutual fund AUM include assets managed by our Investment Management segment, as well as assets managed by third-party investment managers. Our Investment Management segment reflects the revenues earned for managing affiliated assets for our other segments as well as assets managed for third parties.
Previous wording
AUA represents accumulated assets on contracts pursuant to which we either provide administrative, advisement services, or distribution coverage, relationship management and client servicing or product guarantees for assets managed by third parties. These contracts are not insurance contracts and the assets are excluded from the Consolidated Financial Statements. Fees earned on AUA are generally based on the number of participants, asset levels or the level of services or product guarantees that are provided.
Current wording
AUA represents accumulated assets on contracts pursuant to which we provide administrative and advisement services, distribution coverage, relationship management, client servicing, and product guarantees for assets managed by third parties. These contracts are not insurance contracts and the assets are excluded from the Consolidated Financial Statements. Fees earned on AUA are generally based on the number of participants, asset levels or the level of services or product guarantees that are provided.
Previous wording
(2)Includes AUM and AUA related to the divested businesses, for which a substantial portion of the assets continue to be managed by our Investment Management segment.
Current wording
(1)Includes AUM and AUA related to divested businesses, for which a substantial portion of the assets continue to be managed by our Investment Management segment.
Previous wording
Net gains (losses)and Net investment gains (losses) and related charges and adjustments include changes in the fair value of derivatives. Increases in the fair value of derivative assets or decreases in the fair value of derivative liabilities result in "gains." Decreases in the fair value of derivative assets or increases in the fair value of derivative liabilities result in "losses."
Current wording
Net gains (losses)and Net investment gains (losses) include changes in the fair value of derivatives. Increases in the fair value of derivative assets or decreases in the fair value of derivative liabilities result in gains. Decreases in the fair value of derivative assets or increases in the fair value of derivative liabilities result in losses.
Previous wording
Total Revenues increased $1,418 million from $5,930 million to $7,348 million. The following items contributed to the overall increase.
Current wording
Total Revenues increased $702 million from $7,348 million to $8,050 million. The following items contributed to the overall increase.
Previous wording
•lower investment income on fixed maturity securities primarily due to interest rate movements and lower average volume; and
Current wording
•lower investment income on fixed maturity securities primarily due to lower average volume and interest rate movements, partially offset by actions to improve the portfolio yield.
Previous wording
•equity market impacts to limited partnership valuations; and
Current wording
•overall market impacts to limited partnership valuations.
Previous wording
Net gains (losses)improved $614 million from a loss of $686 million to a loss of $72 million primarily due to:
Current wording
Net gains (losses)improved $45 million from a loss of $72 million to a loss of $27 million primarily due to:
Previous wording
•net unfavorable changes in derivative valuations due to interest rate movements.
Current wording
•net favorable changes in derivative valuations due to interest rate movements.
Previous wording
•a gain from the revaluation of the investment in Voya India.
Current wording
•the absence of a gain recognized in the prior period from the revaluation of the investment in Voya India; and
Previous wording
•a favorable change in mark-to-market adjustments on securities subject to fair value option accounting primarily due to interest rate movements;
Current wording
•an unfavorable change in mark-to-market adjustments on securities subject to fair value option accounting primarily due to interest rate movements.
Previous wording
Income related to consolidated investment entities increased $279 million from $22 million to $301 million primarily due to:
Current wording
Income related to consolidated investment entities decreased $10 million from $301 million to $291 million primarily due to:
Previous wording
•an increase in interest income in collateralized loan obligations due to higher interest rates and a new fund launch.
Current wording
•an increase in interest income and fair value changes in collateralized loan obligations.
Previous wording
Total benefits and expenses increased by $1,168 million from $5,502 million to $6,670 million. The following items contributed to the overall increase.
Current wording
Total benefits and expenses increased by $581 million from $6,670 million to $7,251 million. The following items contributed to the overall increase.
Previous wording
Interest credited and other benefits to contract owners/policyholders increased $508 million from $2,528 million to $3,036 million primarily due to:
Current wording
Interest credited and other benefits to contract owners/policyholders increased $583 million from $3,036 million to $3,619 million primarily due to:
Previous wording
•an unfavorable impact from the annual assumption update in Businesses Exited; and
Current wording
•a smaller unfavorable impact from the annual assumption update recorded in businesses exited;
Previous wording
•an unfavorable change in the value of embedded derivatives associated with businesses reinsured primarily due to changes in interest rates;
Current wording
•favorable changes in the fair value of embedded derivatives associated with businesses exited primarily due to changes in interest rates, which are mostly offset by a corresponding amount in Net gains (losses);
Previous wording
•a net favorable adjustment to acquisition-related assets and liabilities; and
Current wording
•the absence of a net favorable adjustment to acquisition-related assets and liabilities recorded in the prior period and the write-off of management contract rights associated with a prior acquisition in the current period.
Previous wording
Operating expenses related to consolidated investment entities increased $118 million from $58 million to $176 million primarily due to:
Current wording
Operating expenses related to consolidated investment entities increased $27 million from $176 million to $203 million primarily due to:
Previous wording
•increase in interest costs of limited partnerships due to higher loans.
Current wording
•an increase in interest costs of limited partnerships due to newly consolidated investment entities.
Previous wording
•the Security Life of Denver Company capital loss carryback. For more details, see the Income Taxes note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K;
Current wording
•the difference in the Security Life of Denver Company capital loss benefit that was recorded in 2024 and 2023. For more details, see the Income Taxes Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K;
Previous wording
•the non-taxable Voya India gain.
Current wording
•the non-taxable Voya India gain in 2023; and
Previous wording
•closing and integration costs associated with the acquisition of Benefitfocus;
Current wording
(1)Primarily consists of acquisition and integration costs associated with recent transactions and amortization of acquisition-related intangible assets. For the year ended December 31, 2024, also includes $15 million, pre-tax, of severance costs, a $15 million, pre-tax, write-off of an intangible asset related to a prior acquisition, a $10 million, pre-tax, write-off of previously capitalized costs associated with an internal technology project which is no longer being pursued, and $5 million, pre-tax, related to an insurance company guaranty fund assessment net of premium tax credits, partially offset by a $26 million, pre-tax, net actuarial gain related to pension and other postretirement benefit obligations. For the year ended December 31, 2023, also includes $35 million, pre-tax, of severance costs, a $22 million, pre-tax, net favorable adjustment to certain acquisition-related assets and liabilities, and a $17 million, pre-tax, impairment related to a vacated leased building.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Extraordinary monetary accommodation to support a global economy negatively impacted by the pandemic is being unwound.
Current report — wording carried from elsewhere
•overall market impacts to limited partnership valuations.
Current report — wording carried from elsewhere
The discount rate used to determine the fair value of the liabilities for our Stabilizer embedded derivatives and the MCG stand-alone derivative includes an adjustment to reflect the risk that these obligations will not be fulfilled ("nonperformance risk").
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Form 10-K. For discussion and analysis of our results of operations for the years ended December 31, 2022 and 2021, refer to our 2022 Annual Report on Form 10-K filed with the SEC on February 24, 2023.
Previous report — wording carried elsewhere
As part of the purchase consideration, an upfront payment of approximately $53 million was made at closing. We recorded a gain of $45 million in relation to revaluation of the existing investment in Voya India which was recorded in Net gains (losses) in the Consolidated Statements of Operations for the year ended December 31, 2023. Net assets acquired as part of this transaction included goodwill of $102 million. The revenues, expenses, assets and liabilities of the business acquired are reported in Corporate.
Previous report — wording carried elsewhere
•closing and integration costs associated with the acquisition of Benefitfocus;
Previous report — wording carried elsewhere
•a net favorable adjustment to acquisition-related assets and liabilities.