Voya Financial (VOYA) Q2 FY26 earnings call: guidance and Q&A

Could you elaborate on the drivers of institutional net inflows in Investment Management and provide color on the pipeline?

Institutional inflows were strong at $1.6 billion, driven by insurance strength backed by fixed income and private credit capabilities. Demand for institutional retail products remains intact, with a competitive position in fixed income international markets poised for continued growth.

“I would continue to call out the insurance strength we have that's backed by both our fixed income and our private credit capabilities that continue to resonate in the marketplace.”

asked by Kenneth Lee · answered by Matthew Toms

Can you quantify the expected margin improvement in Stop Loss for 2026, and is a change to the 87% loss pick possible in Q3 or more likely Q4?

A change to the loss pick is remotely possible in Q3 but more likely in Q4, as the business will be 2/3 complete then. Early 2026 business is running meaningfully better than 2024/2025, with lower high-severity claims and frequency, supported by 21% and 24% rate increases in 2025 and 2026 respectively.

“I would circle the fourth quarter as really the more likely opportunity for that. Why is that we're 1/3 complete coming out of the third quarter, we're 2/3 complete coming out of the fourth, and we just really have 0 interest in trying to accelerate outcomes.”

asked by Thomas Gallagher · answered by Michael Katz

How much of the back-half expense improvement is from recent actions, and are these sustainable into 2027?

The expense actions are expected to have a 6-month payback and drop to the bottom line, resetting the baseline for 2027. The company is focused on operating leverage and expects cash generation to increase again next year due to these actions, commercial momentum, and margin expansion in Employee Benefits.

“we view the actions that we took here is resetting the baseline heading into 2027. We're just entering in the planning season here as we think about everything that we want to accomplish in 207 and beyond.”

asked by Joel Hurwitz · answered by Michael Katz

Can you unpack the voluntary experience, quantify unusual items, and provide an outlook for the loss ratio?

Unusual items (billing true-ups, legacy product reserve adjustments) had about a 2.5-point effect in the quarter. A more normalized voluntary loss ratio would be in the 53-54% range. The company expects higher loss ratios due to customer value focus but aims to maintain stable net margins through expense actions.

“If I cut through all of that to your question, I would think of those having about a 2.5 point effect in the quarter. And so a more normalized number for voluntary in the 54% range year-to-date, 53%.”

asked by Joel Hurwitz · answered by Michael Katz

Do you feel you can get back to your target margins in the Stop Loss business in 2027?

Yes, it is absolutely the plan. Pricing actions and underwriting discipline are targeting the business to be within the target range in 2027. The market is hardening, allowing for significant rate increases, and every piece of business is priced with the goal of achieving target margins.

“absolutely what our plan is. And as you've heard us talk about all the pricing actions we've taken, the discipline around underwriting, when we're pricing business, we are pricing it to be within the target range in '27.”

asked by Ryan Krueger · answered by Heather Lavallee

Can you provide data on the AUM and average account size in the wealth management strategy?

Wealth Management AUM is $33 billion, up 16% year-over-year, with revenue growth of 12%. The advisor count is over 650, up 20% year-to-date, primarily in licensed sales desk advisors. The business is focused on providing retail advice and guidance at the workplace, leveraging the 10 million participants in the retirement business.

“If you think about that AUM number, to answer your question, that's 16% up year-over-year, had a reference to revenue growth of 12%.”

asked by Suneet Kamath · answered by Jay Kaduson

What is the status of the Benefitfocus business post-acquisition, given it's not discussed as much?

Benefitfocus remains strategically important and a core part of the workplace business, despite taking longer to achieve expected economics. Revenues have been stable around $200 million, with significant improvements in client retention and satisfaction. The pipeline is up 32%, sales are up over 8%, and average sold case size is up 80% year-over-year, fitting well into the workplace portfolio.

“we continue to like the strategic importance of benefits administration across our workplace and employee benefit capability we'll say that it has taken us longer to get to the economics that we expected within Benefitfocus.”

asked by Suneet Kamath · answered by Heather Lavallee

Has Voya's stance on considering offers for the company or for medical stop loss changed?

Voya does not comment on speculation and remains focused on executing its organic growth plan and restoring Stop Loss margins. The company has confidence in its growth strategy, cash generation capabilities (above 90% conversion), and flexibility to deploy capital through buybacks, dividends, and strategic retirement roll-ups, maintaining a high bar for acquisitions.

“we don't comment on [indiscernible] nor do we allow ourselves to get distracted by it. At the end of the day, the Board and management were always going to do what is in the best long-term interest of shareholders.”

asked by Andrew Kligerman · answered by Heather Lavallee