Voya Financial Inc
For the period ended Dec 31, 2024. Filed Feb 21, 2025.
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FY2024 · Filed Feb 21, 2025
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7. Reinsurance
- Reinsurance
The Company reinsures its business through a diversified group of reinsurers. However, the Company remains liable to the extent its reinsurers do not meet their obligations under the reinsurance agreements. Collectability of reinsurance balances are evaluated by monitoring ratings and evaluating the financial strength of its reinsurers. Large reinsurance recoverable balances with offshore or other non-accredited reinsurers are secured through various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit ("LOC").
Information regarding the effect of reinsurance on the Consolidated Balance Sheets is as follows as of the periods indicated:
| December 31, 2024 | ||||
|---|---|---|---|---|
| Direct | Assumed | Ceded | Total,Net ofReinsurance | |
| Assets | ||||
| Premium receivable | $205 | $10 | $(238) | $(23) |
| Reinsurance recoverable, net of allowance for credit losses | — | — | 11,307 | 11,307 |
| Total | $205 | $10 | $11,069 | $11,284 |
| Liabilities | ||||
| Future policy benefits and contract owner account balances | $45,540 | $896 | $— | $46,436 |
| Liability for funds withheld under reinsurance agreements | 103 | — | — | 103 |
| Total | $45,643 | $896 | $— | $46,539 |
| December 31, 2023 | ||||
|---|---|---|---|---|
| Direct | Assumed | Ceded | Total,Net ofReinsurance | |
| Assets | ||||
| Premium receivable | $193 | $9 | $(219) | $(17) |
| Reinsurance recoverable, net of allowance for credit losses | — | — | 11,999 | 11,999 |
| Total | $193 | $9 | $11,780 | $11,982 |
| Liabilities | ||||
| Future policy benefits and contract owner account balances | $47,781 | $953 | $— | $48,734 |
| Liability for funds withheld under reinsurance agreements | 103 | — | — | 103 |
| Total | $47,884 | $953 | $— | $48,837 |
Information regarding the effect of reinsurance on the Consolidated Statements of Operations is as follows for the periods indicated:
| Year Ended December 31, | |||
|---|---|---|---|
| 2024 | 2023 | 2022 | |
| Premiums: | |||
| Direct premiums | $4,084 | $3,599 | $3,257 |
| Reinsurance assumed | 21 | 26 | 25 |
| Reinsurance ceded | (929) | (908) | (859) |
| Net premiums | $3,176 | $2,717 | $2,423 |
| Fee income: | |||
| Gross fee income | $2,494 | $2,303 | $2,137 |
| Reinsurance assumed | 16 | 17 | 18 |
| Reinsurance ceded | (397) | (404) | (413) |
| Net fee income | $2,113 | $1,916 | $1,742 |
| Interest credited and other benefits to contract owners / policyholders: | |||
| Direct interest credited and other benefits to contract owners / policyholders | $4,931 | $4,322 | $4,448 |
| Reinsurance assumed | 60 | 64 | 50 |
| Reinsurance ceded | (1,372) | (1,350) | (1,970) |
| Net interest credited and other benefits to contract owners / policyholders | $3,619 | $3,036 | $2,528 |
The Company has indemnity reinsurance agreements with Security Life of Denver Company ("SLD") and with a subsidiary of Lincoln National Corporation ("Lincoln"). Under these agreements, SLD and Lincoln contractually assumed certain policyholder liabilities and obligations, although the Company remains obligated to contract owners. Reinsurance recoverable, net of the allowance for credit losses, related to the agreement with SLD was $8.6 billion and $9.2 billion as of December 31, 2024 and 2023, respectively, on the Consolidated Balance Sheets. Reinsurance recoverable, net of the allowance for credit losses, related to the reinsurance agreement with Lincoln was $0.9 billion and $1.0 billion as of December 31, 2024 and 2023, respectively, on the Consolidated Balance Sheets.
If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. As of December 31, 2024 and 2023, the Company had a deposit asset, net of the allowance for credit losses, of $1.1 billion and $1.2 billion, respectively, which is reported in Other assets on the Consolidated Balance Sheets.
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