Voya Financial, Inc.

Previous wording

The following discussion and analysis presents a review of our consolidated results of operations for the three months ended March 31, 2025 and 2024 and financial condition as of March 31, 2025 and December 31, 2024. This item should be read in its entirety and in conjunction with the Condensed Consolidated Financial Statements and related notes contained in Part I, Item 1. of this Quarterly Report on Form 10-Q, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") section contained in our Annual Report on Form 10-K.

Current wording

The following discussion and analysis presents a review of our consolidated results of operations for the three and six months ended June 30, 2025 and 2024 and financial condition as of June 30, 2025 and December 31, 2024. This item should be read in its entirety and in conjunction with the Condensed Consolidated Financial Statements and related notes contained in Part I, Item 1. of this Quarterly Report on Form 10-Q, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") section contained in our Annual Report on Form 10-K.

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 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.

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.

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 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.

Current wording

Our Retirement 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

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.

Current wording

Through our institutional distribution channel and our Retirement 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

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.

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 Retirement 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

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.

Current wording

Our Employee Benefits 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 Employee Benefits 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 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 wording

Our Employee Benefits 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.

Previous 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.

Current wording

The Employee Benefits 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

On January 2, 2025, the Company acquired the full-service retirement plan business of OneAmerica Financial. This acquisition was accomplished 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 purchase consideration at closing included approximately $50 million in cash paid, and contingent consideration of up to $160 million payable in 2026, based on plan persistency and transition incentives.

Current wording

On January 2, 2025, the Company acquired the full-service retirement plan business of OneAmerica Financial. This acquisition was accomplished 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 Retirement, including incremental assets in emerging and mid-market segments, employee stock ownership plan capabilities and opportunities for distribution partnerships. The purchase consideration at closing included approximately $50 million in cash paid, and contingent consideration of up to $160 million payable in 2026, based on plan persistency and transition incentives.

Previous wording

In the first quarter of 2025, significant tariffs were announced on major U.S. trading partners, who have in turn responded with retaliatory actions. While many of these tariffs have been put on hold, there is significant uncertainty about the future direction of trade policies between the U.S. and its partners. This in turn has led to a significant increase in volatility across financial markets and has created more uncertainty in the economic outlook. We describe how such macroeconomic developments, risks, and uncertainties may impact the Company in Risk Factors in Part I, Item 1A, and in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of our Annual Report on Form 10-K.

Current wording

In the first and second quarters of 2025, new tariffs were announced on major U.S. trading partners, who have in turn responded with retaliatory actions. While many of these tariffs have been put on hold, there is significant uncertainty about the future direction of trade policies between the U.S. and its partners. This in turn has led to a significant increase in volatility across financial markets and has created more uncertainty in the economic outlook. We describe how such macroeconomic developments, risks, and uncertainties may impact the Company in Risk Factors in Part I, Item 1A, and in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of our Annual Report on Form 10-K.

Previous wording

Total revenues decreased $82 million from $2,051 million to $1,969 million. The following items contributed to the overall decrease.

Current wording

Total revenues decreased $52 million from $2,033 million to $1,981 million. The following items contributed to the overall decrease.

Previous wording

Operating expenses related to consolidated investment entities increased $15 million from $28 million to $43 million primarily due to:

Current wording

Income (loss) related to consolidated investment entities decreased $71 million from $114 million to $43 million primarily due to:

Previous wording

Total benefits and expenses increased $32 million from $1,764 million to $1,796 million. The following items contributed to the overall increase.

Current wording

Total benefits and expenses increased $36 million from $1,757 million to $1,793 million. The following items contributed to the overall increase.

Previous wording

Interest credited and other benefits to contract owners/policyholders decreased $16 million from $851 million to $835 million primarily due to:

Current wording

Interest credited and other benefits to contract owners/policyholders decreased $42 million from $843 million to $801 million primarily due to:

Previous wording

•interest credited to participants associated with onboarded OneAmerica spread-based assets in Wealth Solutions;

Current wording

•interest credited associated with onboarded OneAmerica spread-based assets in Retirement;

Previous wording

•onboarded business from OneAmerica in Wealth Solutions;

Current wording

•onboarded business from OneAmerica;

Previous wording

•actions to improve the Stop Loss business, partially offset by growth in the Voluntary business in Health Solutions.

Current wording

•actions to improve the Stop Loss business, partially offset by growth in the Voluntary business in Employee Benefits.

Previous wording

•an unfavorable change in market risk benefits driven by equity market performance and interest rate movements; and

Current wording

•an unfavorable change in market risk benefits driven by equity market performance and interest rate movements;

Previous wording

•unfavorable 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).

Current wording

•unfavorable 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); and

Previous wording

•the Security Life of Denver Company capital loss carryback recorded in 2024. For more details, see the Income Taxes Note to the Consolidated Financial Statements included in Part II, Item 8. of the Annual Report on Form 10-K.; and

Current wording

•the Security Life of Denver Company capital loss carryback recorded in 2024. For more details, see the Income Taxes

Previous wording

(1)Primarily consists of acquisition and integration costs associated with recent transactions and amortization of acquisition-related intangible assets. For the three months ended March 31, 2025, also includes $8 million, pre-tax, of severance costs.

Current wording

(1)Primarily consists of acquisition and integration costs associated with recent transactions and amortization of acquisition-related intangible assets. For the three and six months ended June 30, 2025, also includes $23 million and $31 million, pre-tax of severance costs, respectively.

Previous wording

Net investment gains (losses) changed $65 million from a gain of $63 million to a loss of $2 million primarily due to:

Current wording

Net investment gains (losses) changed $49 million from a gain of $20 million to a loss of $29 million primarily due to:

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

•a favorable change in mark-to-market adjustments on securities subject to fair value option accounting primarily due to interest rate movements; and

Previous wording

•unfavorable market risk benefit remeasurements primarily due to equity market performance and interest rate movements in the prior period; and

Current wording

•favorable market risk benefit remeasurements primarily due to equity market performance and interest rate movements in the current period.

Previous wording

Other adjustments to operating earnings decreased $7 million from a loss of $23 million to a loss of $30 million primarily due to:

Current wording

Other adjustments to operating earnings decreased $29 million from a loss of $12 million to a loss of $41 million primarily due to:

Previous wording

•an unfavorable change in market risk benefits driven by equity market performance and interest rate movements; and

Current wording

•an unfavorable change in market risk benefits driven by equity market performance and interest rate movements.

Previous wording

Adjusted operating earnings before income taxes is the measure of segment profit or loss management uses to evaluate segment performance. Adjusted operating earnings before income taxes should not be viewed as a substitute for GAAP pre-tax income. We believe that the presentation of segment adjusted operating earnings before income taxes as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis. Refer to the Segments Note to our Condensed Consolidated Financial Statements in Part I, Item 1. of this Quarterly Report on Form 10-Q for further information on the presentation of segment results and our definition of adjusted operating earnings before income taxes.

Current wording

Adjusted operating earnings before income taxes is the measure of segment profit or loss management uses to evaluate segment performance. Adjusted operating earnings before income taxes should not be viewed as a substitute for GAAP pre-tax income. We believe that the presentation of segment Adjusted operating earnings before income taxes as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis. Refer to the Segments Note to our Condensed Consolidated Financial Statements in Part I, Item 1. of this Quarterly Report on Form 10-Q for further information on the presentation of segment results, our definition of Adjusted operating earnings before income taxes and Adjusted operating revenues, which are both non-GAAP financial measures, and a reconciliation to the most directly comparable GAAP measure.

Previous wording

Income (loss) related to businesses exited or to be exited through reinsurance or divestment decreased $7 million from a loss of $32 million to a loss of $39 million primarily due to:

Current wording

•Benefits and expenses related to businesses exited or to be exited through reinsurance or divestment;

Previous wording

The following table presents Total Client Assets by product group, which comprise total AUM and AUA, for our Wealth Solutions segment as of the dates indicated:

Current wording

The following table presents Total Client Assets by product group, which comprise total AUM and AUA, for our Retirement segment as of the dates indicated:

Previous wording

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 wording

The following table presents Total Client Assets by source of earnings, which comprise total AUM and AUA, for our Retirement segment as of the dates indicated:

Previous wording

The following table presents Full Service, Recordkeeping, and Stable Value net flows for our Wealth Solutions segment for the periods indicated:

Current wording

The following table presents Full Service, Recordkeeping, and Stable Value net flows for our Retirement segment for the periods indicated:

Previous wording

Adjusted operating earnings before income taxes increased $21 million from $186 million to $207 million primarily due to:

Current wording

Adjusted operating earnings before income taxes increased $21 million from $214 million to $235 million primarily due to:

Previous wording

•onboarded OneAmerica fee and spread-based assets, higher average equity markets, and positive defined contribution flows; and

Current wording

•higher revenues benefiting from onboarded OneAmerica fee and spread-based assets, favorable market impacts, and positive defined contribution flows;

Previous wording

•higher expenses which primarily reflects the onboarded business and amortization of the VOBA asset from the OneAmerica transaction.

Current wording

•higher expenses reflecting the onboarded business and VOBA asset amortization from the OneAmerica transaction and investments in business growth.

Previous wording

•higher operating expenses driven by seasonal expenses; and

Current wording

•higher operating expenses driven by business growth; and

Previous wording

The following table presents sales, gross premiums and in-force for our Health Solutions segment for the periods indicated:

Current wording

The following table presents sales, gross premiums and in-force for our Employee Benefits segment for the periods indicated:

Previous wording

•lower benefits to policyholders due to favorable loss reserve development in the current period associated with the Stop Loss business, partially offset by unfavorable claim developments in Group Life and Voluntary products; and

Current wording

•lower benefits to policyholders primarily due to positive claim development in Stop Loss and a lower loss ratio in Group Life, partially offset by a higher Voluntary loss ratio;

Previous wording

•lower premiums driven by actions to improve the Stop Loss business, partially offset by growth in the Voluntary business; and

Current wording

•lower revenues primarily driven by actions to improve the Stop Loss business; and

Previous wording

•investments in Short-Term Disability and Leave Management in Health Solutions;

Current wording

•investments in Short-Term Disability and Leave Management.

Previous wording

Adjusted operating earnings before income taxes including noncontrolling interest improved $1 million from a loss of $64 million to a loss of $63 million primarily due to:

Current wording

Adjusted operating earnings before income taxes including noncontrolling interest decreased $13 million from a loss of $54 million to a loss of $67 million primarily due to: