Asked if the 87% loss pick for 2026 stop-loss is conservative and if reserve releases are expected, and then asked about activist interest in divesting stop-loss or selling the company.

Mike Katz confirmed reserves are set at the high end of reasonable outcomes, implying potential for releases. Heather Lavallee addressed the activist, stating the Board constantly evaluates strategic options but has full alignment on the current path of growing Retirement/IM and improving Employee Benefits, especially stop-loss, as the most value-accretive. “We continue to set reserves on the high end of reasonable outcomes. And so I think you're thinking about it right from that perspective. (Mike Katz) and there is no daylight between the Board and management on the strategic path forward. (Heather Lavallee)”

Questioned if calendar year stop-loss ratio would improve from 84% given the 87% loss pick, implying more reserve releases. Also asked if pulling back on stop-loss growth negatively impacts other EB product lines.

Mike Katz confirmed the base case is calendar year improvement, citing faster claims emergence and 90% completion for 2025 business. Jay Kaduson stated stop-loss is an important solution, driving broker relationships, and EB sales were up 8% YoY, indicating no negative impact on other lines. “The base case, if that gets to more middle end of the range, absolutely, we would expect the calendar year loss ratio to perform better than 84%. (Mike Katz) and Employee benefit sales were up 8% year-over-year. (Jay Kaduson)”

Asked if faster claims emergence is due to operational changes or larger claim amounts, and if the target 80% loss ratio is still appropriate given recent volatility.

Mike Katz clarified that faster emergence is primarily on the reported side due to higher claim severity (e.g., cell and gene therapies) and healthcare providers pushing claims faster, viewing it as a 'new normal.' He agreed with the analyst's implicit question about the appropriateness of the 80% target, suggesting they are thinking similarly. “We think this is the new normal coming out of COVID, and so we're post-COVID, and so I think that's a good thing. (Mike Katz)”

VOYA

Voya Financial (VOYA) Q1 FY26 earnings call: guidance and Q&A

Q: Asked if the Q1 Group Life loss ratio (7.6% vs 77-80% target) indicates a lower full-year loss ratio, given Q1 is typically the worst.

Mike Katz stated that while Q1 was encouraging and the calendar year would likely be better than 77-80% given the Q1 result, the base case is for the loss ratio to return to the target range in Q2-Q4. “If you factor in the first quarter, from a calendar year perspective, certainly, we would expect to be better than the 77 to 80 given the result in the first quarter. But right now, I think the base case is back to range in the second and third, fourth quarter.”

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 6, 2026

Source: earnings call transcript

Executive summary

Voya Financial Q1 FY26 — Strong Start with Earnings Growth and Stop-Loss Margin Recovery

Voya Financial delivered a strong Q1 FY26, marked by double-digit adjusted EPS growth and robust capital generation, with a significant portion returned to shareholders. The company is executing on its strategy to drive margin expansion in Employee Benefits, particularly stop-loss, while maintaining strong performance in Retirement and Investment Management. Management expressed high confidence in the continued recovery of stop-loss margins and full-year positive net flows for Retirement, despite Q1 outflows.

Highlights

Adjusted operating EPS grew by 13% year-over-year to $2.26 per share.
Generated approximately $200 million of excess capital, returning the same amount to shareholders.
Return on equity (ROE) above 18%.
Employee Benefits generated $63 million in adjusted operating earnings, with stop-loss margins on path to recovery.
Investment Management adjusted operating earnings up 12% year-over-year, with 2%+ organic growth expected for the year.

Concerns

Q1 Retirement net flows were negative due to timing and the expected exit of a large recordkeeping plan.
Investment Management's U.S. retail flows were affected by industry-wide headwinds, offsetting international demand.
Discussion around activist investor interest in divesting stop-loss or selling the company.

Guidance & targets

Category	Target	Timeline	Confidence
Retirement net flows	Positive net flows high materiality	Full year FY26	High
Investment Management organic growth	2-plus percent high materiality	Full year FY26	High
OneAmerica integration completion	Completion medium materiality	Q2 · FY26	High
Retirement expenses	Step down medium materiality	Q2 · FY26	High
Retirement expenses (post-integration)	Further reduction medium materiality	FY26	High
Retirement net flows	Strong net inflows high materiality	Q2 · FY26	High
Share repurchases	$150 million high materiality	Q2 · FY26	High
Stop-loss loss ratio	Back within target loss ratio high materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Retirement Strong profitability and well-positioned for continued growth. OneAmerica integration nearing completion. Expects positive net flows for full year FY26. Fee-based revenues: close to 60% of total net revenuesAnnual recurring deposits: >$50BRetirement accounts: nearly 10MPlan retention: >95%Full-service sales (emerging markets): up 13% YoYFull-service sales (government): up 200% YoY	Up 8% (fee-based)	14% (adjusted operating earnings, TTM)	—	$209M (adjusted operating earnings, Q1); 39% (trailing 12-month margins)
Investment Management Differentiated client-focused solutions. Strong demand for private market strategies. International retail demand resilient, offsetting U.S. headwinds. Confident in 2%+ organic growth for FY26. Assets outperforming peers/benchmarks (3 years): 78%Assets outperforming peers/benchmarks (10 years): 82%Net inflows (trailing 12 months): ~$7B	Drove result	12% (adjusted operating earnings, Q1); 8% (adjusted operating earnings, TTM)	—	$46M (adjusted operating earnings, Q1); 28.6% (trailing margin)
Employee Benefits Executing deliberate strategy to expand margins. Strong net underwriting results. Group Life claims favorable. Stop-loss actions positioned business to return margins to target levels. Stop-loss rate increases: ~24%Stop-loss in-force premium: flatReserve release (Q1): $25M2025 business completion: >90%Employee benefit sales: up 8% YoYSTAR 26 pipeline: up 10%STAR 26 sales: up 13%STAR 26 block growth: 4%	—	—	—	$63M (adjusted operating earnings, Q1); $169M (adjusted operating earnings, TTM)

VOYA operating KPIs by quarter

VOYA operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Active accounts Retirement	<10M It has meaningfully strengthened, both the scale and earnings power of our retirement business, which now serves nearly 10 million retirement accounts. Source: earnings call transcript	10M+ Our platform now serves more than 10 million participant accounts, providing meaningful scale to drive future fee-based revenue growth. Source: earnings call transcript	—
Net new assets Investment Management	~$65M But if we think about the investment management, right, net flow was about -- net inflow is about $65 million for the quarter. Source: earnings call transcript	$1.2B Net inflows were $1.2 billion in the quarter and now $6.3 billion over the last 12 months. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

OneAmerica Acquisition of retirement business to strengthen scale and earnings power.

Integration expected to complete in Q2 FY26, including migration of ~3,000 plans. Now serves nearly 10 million retirement accounts.

Risks & headwinds

Q1 Retirement Net Outflows Q1 FY26

primarily timing driven and exit of a large recordkeeping plan

Mitigation:Expects strong net inflows in Q2 and full year FY26, supported by healthy retention and robust pipeline.

U.S. Retail Investment Management Headwinds Q1 FY26

Offset by resilient international demand.

Mitigation:Continued focus on differentiated income and growth strategies internationally; healthy pipeline.

Activist Investor Interest Current

Not quantified, but acknowledged as 'out there'.

Mitigation:Management and Board are fully aligned on current strategic path of growing Retirement/IM and improving Employee Benefits, viewing it as the most value-accretive. Regularly engaging with shareholders.

Stop-Loss Volatility / Target Loss Ratio Past couple of years

Implied by analyst question about 80% target vs. actual experience.

Mitigation:Management agrees with the analyst's implicit question, suggesting they are thinking similarly about the end state. Currently pricing to get back to target, with conservative reserving.

What to watch in Q2 FY26

OneAmerica integration completion

Q2 FY26

Current Nearing completion, final migration wave later this month.

Target Completed

Why it matters

Successful integration is key to realizing the full strategic and financial benefits of the acquisition and reducing associated expenses.

We expect to complete the integration in the second quarter.

Find out whether VOYA delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked if the Q1 Group Life loss ratio (7.6% vs 77-80% target) indicates a lower full-year loss ratio, given Q1 is typically the worst.

Mike Katz stated that while Q1 was encouraging and the calendar year would likely be better than 77-80% given the Q1 result, the base case is for the loss ratio to return to the target range in Q2-Q4.

“If you factor in the first quarter, from a calendar year perspective, certainly, we would expect to be better than the 77 to 80 given the result in the first quarter. But right now, I think the base case is back to range in the second and third, fourth quarter.”

asked by Jian Huang · answered by Michael Katz

2 min read 6 chapters

Detailed narrative

Strong Q1 Performance and Strategic Execution

Voya delivered a strong Q1 FY26, with adjusted operating EPS up 13% year-over-year and a return on equity above 18%. The company generated and returned approximately $200 million in excess capital to shareholders. This performance reflects disciplined execution across its diversified business model, with a focus on growing revenues, earnings, and cash flows.

Retirement Business Strength and OneAmerica Integration

The Retirement segment generated over $200 million in adjusted operating earnings with trailing 12-month margins of 39%. The acquisition of OneAmerica has significantly strengthened scale, now serving nearly 10 million retirement accounts, and its integration is expected to complete in Q2 FY26. Despite Q1 outflows due to timing and a planned exit, the company anticipates positive net flows for the full year.

Investment Management Momentum

Investment Management reported a 12% year-over-year increase in adjusted operating earnings, driven by strong demand in institutional private market strategies and resilient international retail demand. The segment achieved positive net flows in Q1 and expects to deliver 2%+ organic growth for the full year, supported by a healthy pipeline and strong investment performance.

Employee Benefits Margin Recovery

Employee Benefits showed significant improvement, generating $63 million in adjusted operating earnings. This was primarily driven by strong net underwriting results and decisive actions in stop-loss, including 24% rate increases and improved risk selection. Management expressed high confidence in restoring stop-loss margins to target levels, viewing it as the most value-accretive path for shareholders.

Capital Allocation and Shareholder Returns

Voya continues to demonstrate strong cash flow generation, converting cash at 90%+ levels. The company returned $200 million to shareholders in Q1 through buybacks and dividends and plans an additional $150 million in share repurchases in Q2. Since 2022, diluted shares outstanding have been reduced by approximately 14%, reflecting a consistent commitment to capital deployment.

Legislative and Regulatory Tailwinds

The company highlighted recent legislative and regulatory momentum aimed at expanding access to retirement savings, particularly for underserved small and mid-sized employers. Voya views these policy initiatives, such as coverage mandates and auto-enrollment, as favorable developments that align with its position as a leader in providing retirement security solutions.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.