Voya CEO: Company on Track to Meet 2018 Goals Despite 90% Drop in 3Q Net
November 6, 2015 by Dennis Gorski, managing editor-online, BestWeek: Dennis.Gorski@ambest.com
NEW YORK – Despite a “very unusual” loss in individual life for the third quarter, Voya executives said during a conference call the company has new growth opportunities and is staying on course to meet a series of financial goals in 2018. Those targets include a return on equity of between 13.5% and 14.5%, said Chief Executive Officer Rodney Martin.
Net income available to shareholders fell 90% to $40 million. Although the company’s employee benefits segment rose 19% to $44 million, its other segments — retirement, annuities, investment management and individual life — dropped year over year.
Individual life lost $11 million contrasted to a positive $40 million for last year. The volatility was “a very unusual event,” the was “driven by large claims,” according to Michael Smith, CEO of insurance solutions. He said in the quarter, 35 claims totaled $65 million, net of reinsurance. Actual mortality rose to 110.6%, from a projected 90%, an event that hadn’t occurred since the third quarter of 2007, added Chief Financial Officer Ewout Steenbergen.
Voya believes it can grow in the pension risk transfer space because “it’s an extension of our core capabilities,” said Charles Nelson, CEO of retirement. “It’s very opportunistic for us.”
He said Voya’s target market is the small to midsize segment — $5 million to $500 million.
The company will realize capital proceeds of $230 million after selling $90 billion in term-life reinsurance policies to Reinsurance Group of America is completed (Best’s News Service, Sept. 11, 2015). The proceeds will be received in segments and at different times in the months ahead, said Steenbergen.
The company is also actively repurchasing shares of its stock. Voya repurchased 11,013,765 shares of its common stock at an average price per share of $43.70. The aggregate purchase price was about $481 million, it said in its earnings statement. Voya had about $170 million remaining under its share repurchase authorization as of Sept. 30.
“Returning capital is another example of our commitment to shareholder value,” Martin said.
The operating units of Voya Financial have current Best’s Financial Strength Ratings of A (Excellent).
In afternoon trading, shares of Voya Financial (NYSE:VOYA) were $39.28, down 3.45% from their previous close.
