Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 155,000 U.S. employees.

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Employees say:"I love the culture—volunteerism is really important here and I love that. I love the mindset my team has of working hard and performing quality work; but also have fun and be kind to each other, lead with compassion and understanding. Benefits are great, pay is competitive, and work life balance is real. I feel trusted and respected by my peers and leaders to use my judgment and make the right decisions for my customers. I truly enjoy working here."

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Employees say:"I love the financial support from this company. This is my first employer where I feel like the company actually cares about the wellbeing of the employees with benefits like the student loan assistance, generous 401k match and pension plan. I also enjoy my department a lot and how many opportunities we get to be involved with larger projects, as well as opportunities to lead meetings to develop our leadership &amp; collaboration skills. The volunteer time is also a huge plus for me, it is nice to see the company want to give back."

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Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 145,000 U.S. employees.

Employees say:"I love Voya! This is the very best company I have ever worked for, and my loyalty will always be with them. My manager is amazing and supports my dreams here at Voya. Very encouraging and positive. I run to my computer every morning and it's a blessing in itself to work here! I'm proud to say I'm a Voya employee as they put the customer and employees first. We focus on teamwork and always keep the vision in mind. The benefits are phenomenal and I'm confident they give us all the tools we need to be successful. We also have additional training websites for those who want to grow in the organization at no cost! This is unheard of!"

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Employees say:"The support that this company gives women is incredible. Full access to programs like Maven truly shows how much the company cares for women and recognizes the need to provide additional support. Regardless on how difficult things might get at work, the support I have via Maven and other benefits help me to show up to work at my best. I also am a very big fan of the paid volunteer time - it is enough hours to feel that I truly can give back to my community and have a presence. It also allows me to set a great example to my children on social responsibility."

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Employees say:"We love to experiment with new ways of doing things. We strive for better efficiency and better experiences for both our customers and ourselves. The company recognizes that we are human and our experiences are vital to connecting with the people we partner with and service."

The companies on this annual list make a conscious effort to be supportive, inclusive workplaces.

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Employees say:"They create an atmosphere where all individuals are accepted for who they are, both in their professional lives and personal lives. Being honest about who you are, being open about who you are is a beautiful way to spend eight hours daily."

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Employees say:"I feel the Voya Cares group is what makes Voya Financial unique in our industry. We really care about people with disabilities and special needs. This team makes a point to discuss this underserved group in our society and how we can look to help individuals and families with these certain circumstances plan for a better retirement future and have their companies help make this happen."

Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 140,000 U.S. employees.

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Employees say: 
 
"The Voya culture is exceptional and continuously reinforced, and the company is very successful. The leadership is extremely talented and visionary—the response to the pandemic was immediate and effective, and Voya has reiterated its commitment to offering a hybrid working environment and not enforcing a full return to the office. Combining forward-thinking business sense with compassion and disability and inclusion, Voya Cares® sets the company apart and seems to resonate with prospective clients as an appealing differentiator."

GPTW Financial Services & Insurance Large 2023-Voya Financial

Employees say: 
 
"The company has a history of giving back to the community, which really brings the employees together and makes you very proud to work for Voya Financial. I love that we can pick a cause to donate to and the company will match your donation. Also, the company gives you 40 hours a year to volunteer, which shows to really want their employees to participate in giving back to their communities—and not just with money but actually helping out."

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The companies on this year's list stand out for celebrating innovation, promoting cooperation, and more.

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Employees say: 
 
“I think their ability to adapt is unique. I feel this is a great place to work because in the pandemic and even now while things are getting better Voya is listening to their employees preference to where they would like to work from. They might prefer all employees return to the office, but I feel valued and heard because of the work from home opportunity they are giving.” 
 
Read the Great Place to Work review .

GPTW Financial Services Industry Large 2022-Voya Financial

Employees say: 
 
“There is a healthy culture here from the bottom to the top, you can count on others to operate within an inclusive, diverse culture and trust comes easier. I appreciate the opportunities to grow in my career and be my true self at work.”

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Employees say: 
 
“Everyone here works hard and is always willing to go the extra mile for fellow employees and customers. Additionally, everyone is nice and enjoyable to work with, even when facing difficult challenges.”

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Employees say:  
“They've provided me with the means to have a career, care for my family, feel a sense of accomplishment, and so much more. From day one, I've been accepted fully and considered for promotions and advancement based on my skillset and work ethic.”

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The 40 companies highlighted on this year's list support personal growth, outside-the-box thinking, and diversity in the workplace.

best workplaces new york 2020-Voya Financial

Employees say: 
 
"This job has allowed me to balance family life with work. Due to this job, I am allowed to still play a very active role in my children's life. I can be present during the first day of school or be part of school activities."

This year's Fortune 500 marks the 66th running of the list.

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The financial services company offers retirement savings plans, investment management, and life and employee benefit insurance to corporations and individuals.

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Best Workplaces In New York

Getting workers ready for retirement is the focus of Voya Financial, which provides workplace benefits and savings solutions and technologies in the United States and internationally. The company operates through three segments: wealth solutions, health solutions, and investment management. Voya serves some 39,000 U.S. employers and over 7 million individual retirement plan participants and has approximately 450 financial professionals serving retail and workplace clients. The company was formerly known as ING U.S. and changed its name to Voya Financial in April 2014. Voya Financial was founded in 1975.

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Q4 2024

Voya Financial (VOYA): Company Profile, Stock Price, News, Rankings

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Voya Financial

voya financial

Good morning. Welcome to Voya Financial's Fourth Quarter twenty twenty four Earnings Conference Call. All participants will be in a listen only mode. Please note this event is being recorded. I would now like to turn the conference over to May Ni Chu, Head of Investor Relations.

Good morning, and thank you for joining us this morning for Voya Financial's fourth quarter twenty twenty four earnings conference call. As a reminder, materials for today's call are available on our website at investors.voya.com. We will begin with prepared remarks by Heather LaValle, our Chief Executive Officer and Mike Katz, our Chief Financial Officer. Following their remarks, we will take your questions. I'm also joined on this call by Don Templin, former Chief Financial Officer and Strategic Advisor to Voya and the heads of our businesses, specifically Jay Kadison, CEO of Workplace Solutions and Matt Thoms, CEO of Investment Management.

Turning to our earnings presentation materials that are available on our website. On Slide two, some of the comments during today's discussion may contain forward looking statements and refer to certain non GAAP financial measures within the meaning of federal securities law. GAAP reconciliations are available in our press release and financial supplement found on our Investor Relations website. And now, I will turn the call over to Heather.

Thank you, Meany. Good morning and thank you for joining us today. Before we turn to our key themes, I'm happy to welcome Jay Kadison as our new CEO of Workplace Solutions. Jay brings deep industry experience and a track record of driving growth and innovation. He's been a valued partner to Voya for many years and will be a tremendous asset in helping us grow our health and wealth businesses from our already strong foundation, while advancing our workplace strategy.

I also want to take a moment to welcome Mike Katz in his new role as Chief Financial Officer and recognize Don Templin's significant contributions over the past few years. We are thankful for Don's guidance and insight. Now let's turn to our key themes on Slide four. In 2024, we delivered strong earnings and growth in Wealth Solutions and Investment Management and an outcome in Health Solutions consistent with the update we provided in December. We maintained our focus on careful stewardship of capital, remain disciplined on expenses and continue to execute on our strategy, including through accretive investments in our future growth.

In Health Solutions, our stop loss results for the fourth quarter is in line with the expectations we shared in our December announcement. We have taken corrective actions within our stop loss business, including meaningful rate increases and strengthened underwriting risk selection, and we expect a material improved net underwriting result in 2025. We're confident that our reserves will adequately cover future claims based on our January experience. In Wealth Solutions and Investment Management, we delivered strong revenue growth, margin expansion and commercial momentum in the fourth quarter and full year 2024. Earnings for Wealth Solutions were up 30% year over year with revenue growth and adjusted operating margin exceeding our 2024 full year targets.

Wealth Solutions generated $2,000,000,000 of defined contribution net flows in 2024, demonstrating continued commercial momentum. Voya Investment Management's diversified and globally distributed investment strategies delivered strong results in 2024. Earnings were up 20% year over year and we achieved an organic growth rate above 4% for the year, comfortably beating our target. With four consecutive quarters of positive net flows, 2024 also stands as Voya Investment Management's best year in terms of net flows. With respect to capital management, we delivered on our plan to return $800,000,000 of excess capital to shareholders in 2024 through share repurchase and dividends.

We will maintain a strategic approach to capital management and expect to significantly increase our excess capital generation in both 2025 and 2026. We closed the OneAmerica transaction on January 2 and are making good progress on the integration. This strategic move adds $60,000,000,000 in assets and accretive scale to our full service business, along with nearly $4,000,000,000 of spread based assets under management. Share buybacks will be weighted towards the second half of the year, and we continue to invest in growth initiatives that create long term shareholder value. Turning to Slide five.

Our top priority in the near term continues to be significant improvement in our stop loss margins. Margin improvement will be driven in part by increased pricing and improved risk selection actions we've already taken on our January 2025 block. These actions will also be applied to the upcoming non January renewal season. Second, we are focused on the successful integration of One America. We have received very positive feedback from customers and advisors since we announced this transaction.

Our focus is now on ensuring a smooth transition, managing customer retention and continuing to successfully onboard OneAmerica's talented team. We're excited about the growth opportunities available through new distribution partnerships and a broader set of capabilities, and we continue to expect $200,000,000 in revenue and $75,000,000 in incremental operating earnings from OneAmerica in 2025. Third, we're focused on driving continued commercial momentum across all our core businesses. Our ability to generate and deploy excess capital in 2025 will be driven by our targeted investments in growth and proven ability to leverage our competitive advantages across all three of our businesses. Turning to Slide six.

For the past two years, I have been talking about our opportunity to drive profitable growth across our core businesses through investments that expand our revenues and earnings and create long term shareholder value. We expect capital usage during the first half of this year to be focused on prudent investments that enhance our offerings for our customers while growing revenues and earnings. Our largest investment will be in health solutions, focused on enhancing our capabilities in lead management and disability administration. As lead administration has become more complex, excellence in lead management has become a key differentiator and an important driver in purchasing decisions for group life, disability and supplemental products. Today, employers are interested in bundling solutions from a single vendor.

Currently, 72% of our lead management customers also purchased supplemental health from Voya, up from approximately 20% in 2019. We expect our strategic investments in health solutions, primarily lead management, will significantly increase our competitiveness in bundled health solutions. Improved win rates and client retention will reinforce our top three positions in the supplemental health market. In a few moments, Mike will discuss our broader approach to capital allocation in 2025. Let's turn to Slide seven for an overview on the Scottsit Re investment.

In December, we closed on our anchor equity investment in Scottset Re, a Bermuda sidecar form to reinsure annuities issued by Allianz Life. Our stake in Scottset Re will yield an attractive investment return for Voya. It also provides several other valuable strategic benefits. It allows us to participate in the substantial growth of the annuities market, while providing Voya Investment Management with a prominent asset management role in a rapidly growing segment of the insurance industry. Goswitt strengthens Voya's industry leading position in the insurance asset management market, highlighting our proven track record in private fixed income.

It also deepens our important strategic relationship with Allianz, providing another scalable avenue for growth within this partnership. These strategic investments represent financially attractive opportunities to execute on our strategy and grow our business over the long term. With that, Mike will now provide more details on our performance and results. Mike?

Thank you, Heather. Before turning to our results, I would also like to thank Don Templin for his strong leadership and the impact he has made at Voya. As our next CFO, I look forward to building upon his success. Now let's turn to our financial results on Slide nine. We reported $1.4 of adjusted operating earnings per share in the fourth quarter.

This contributed to the $7.25 delivered for the full year. Our full year results include alternative and prepayment income that were $0.53 below our long term expectations. Alternative income returns were approximately 7%, improving both sequentially and year over year. Prepayment income remains below long term expectations due to the higher interest rate environment. We expect lower prepayment income to persist in 2025 and have updated our guidance accordingly.

Our results were impacted by higher loss ratios in Health Solutions, which offset the strong results in Wealth Solutions and Investment Management throughout 2024. Both these segments exceeded net revenue and margin targets, driven by higher fee based revenues and cost discipline. Free cash flow conversion was approximately 90% in 2024. We expect this to continue and for capital generation to increase in both 2025 and 2026. I will cover this in more detail shortly.

With that, let me turn to our segment results. Turning to Health Solutions on Slide 10. In December, we shared unfavorable experience for the January 2024 stop loss business. Since then, claims have stabilized. We have set the loss ratio for the January 2024 cohort at 95% and estimate that this cohort is approximately 70% complete as of December 31.

Note that the reported fourth quarter loss ratio is above 95% due to the year to date true up. We have included details on our loss ratios by cohort in our investor supplement to make this more clear. Experience in January gives us further confidence that our reserves will be sufficient to cover future claims. Looking into 2025, the underwriting and pricing actions taken in the second half of twenty twenty four were consistent with our plan to prioritize margin over premium growth. I would call out two key actions taken.

First, we achieved a net effective rate increase of 21% for the January 2025 cohort. This is an average which includes much higher rate increases on underperforming cases. Second, we strengthened our underwriting process to improve risk selection. Our focus was on ensuring we were appropriately pricing known claims on both renewals and new business. As a result of these actions, we expect to improve the loss ratio for the January 2025 cohort by 5% to 15%.

Turning to Slide 11. Adjusted operating earnings were $40,000,000 for the year. Net revenues and adjusted operating margins reflect the unfavorable claims experience in stop loss, which we expect to improve this year. Within voluntary, claims were above what we expected in the fourth quarter, driven by higher utilization. Looking ahead, we expect voluntary loss ratios will continue to increase in 2025, which is consistent with our long term plan to drive enhanced value for our customers.

Overall, we expect net revenues and margins to improve meaningfully in 2025, driven by actions taken to improve stop loss. Margin expansion will continue into 2026 as we plan for a two step process for stop loss and are investing in new lead management capabilities in 2025. Turning to Wealth Solutions. Commercial success continued in 2024 as we generated nearly $2,000,000,000 of total defined contribution net flows in the year. In the fourth quarter, we successfully funded two large record keeping plans.

Full service sales were strong in 2024, driven by mid market sales, which grew 4x that of the prior year. While strong equity markets are positive for Wealth Solutions, it does have a counterintuitive effect on net flows. Higher equity markets increased the average account values of surrenders, which impacted net flows in 2024 despite strong sales and retention. Overall, defined contribution retention was 98.5%, up 60 basis points year over year. Looking into 2025, we expect a solid year commercially with over $20,000,000,000 of wins in our pipeline.

Turning to Slide 13. In Well Solutions, we generated net revenue and margins above the high end of our guidance. Adjusted operating earnings were $820,000,000 for the full year. Earnings were up 30% year over year as we increased net revenues while controlling spend. Higher fee based revenues were driven from added participant accounts and favorable equity markets.

Spread based revenues outperformed expectations as we mitigated impacts from lower spread based assets by management actions on yield. In 2025, we expect added revenues and earnings from One America in line with expectations. Typical of acquisitions, we do expect some volatility with net flows. However, that is fully reflected in our earnings guidance. This transaction is now closed, and we are off to a great start with the integration.

Feedback continues to be very positive from both new clients and distribution partners. Additionally, we expect margins to moderate from high levels in 2024 due to lower spread income and growth investments. We expect spread income to be lower given lower spread asset balances, and we expect higher spend as we implement over $20,000,000,000 of defined contribution wins and targeted investments to strengthen our retail wealth management offering. Turning to investment management on Slide 14. 20 20 four has been a pivotal year for Voya Investment Management as we executed on our plan to expand margins and drive organic growth.

Total net inflows for the quarter were $3,400,000,000 contributing to a total of $12,500,000,000 for 2024. In institutional, our leading market position in insurance asset management continues to be a competitive advantage. Insurance demand was strong across multi sector private credit and investment grade credit strategies. We now partner with over 70 external insurance clients and manage nearly $60,000,000,000 of assets, including our expanded relationship with Allianz in establishing Stonset REIT. Retail net flows drove over half of the positive cash flows in 2024 across both our U.

S. Intermediary and international retail channels. With respect to fees, yields on external client assets expanded in 2024 counter to industry trends, and we expect these levels to be sustainable. Turning to Slide 15. In investment management, we grew net revenues and operating margins above the high end of our guidance in 2024.

Adjusted operating earnings were $66,000,000 in the fourth quarter, which contributed to full year 2024 earnings growth of 20%. Full year results included strong performance fees and continued expense discipline supporting margin expansion ahead of plan. We continue to deliver excellent long term investment performance, which builds on our track record and provides momentum heading into 2025. This includes public and private fixed income solutions where we have a strong heritage and are delivering differentiated outcomes for clients globally. Looking ahead to 2025, we expect adjusted operating margins in 2025 to be consistent with 2024 as we balance cost discipline with targeted investments and private capabilities and U.

S. Intermediary distribution. Turning to Slide 16. Our excess capital balance at twelvethirty one was approximately $200,000,000 net of our upcoming debt maturity. In the fourth quarter, we completed our 10b5-one share repurchase program and the remainder of the ASR started in the third quarter.

This fulfilled our commitment to return approximately $800,000,000 of capital to shareholders in 2024. Our year end excess capital also includes the capital deployed

our partnership with Allianz in Skonset Re. This year, our approach to capital will be more balanced between capital return and growth investments. Skonset Re, One America and lead management are all growth investments that we expect returns well above our cost of capital. As a reminder, we will retire the debt maturing in first quarter with the proceeds of our recent debt issuance. We continue to view share repurchases and common stock dividends as important components of our capital management plan.

Share repurchases are expected to be weighted towards the second half of the year given our focus on growth investments in the first half. Turning to our excess capital outlook on Slide 17. We expect to deliver improved excess capital generation in 2025 as highlighted on our third quarter call. This will be driven by stop loss repricing, the One America acquisition and continued profitable growth across our businesses. We expect these actions will increase our excess capital generation by approximately $100,000,000 in 2025.

In 2026, we expect a further increase in our excess capital generation as we restore stop loss back to target margins and benefit from continued profitable growth across our businesses. Turning to our outlook on Slide 18. As highlighted in our previous slides, we expect to generate approximately $750,000,000 of excess capital in 2025 before growth investments. Note, we are guiding to a normalization of both incentive compensation and performance fees, which are both favorable in 2024. Finally, we expect to return approximately half the capital we are generating this year as we balance growth investments with share repurchases and dividends.

Before turning to your questions, I would like to reiterate our key near term priorities. First, improving loss ratios and stop loss second, successfully integrating OneAmerica and third, continuing to execute on the commercial momentum in each of our businesses. These priorities will drive improvement in capital generation in 2025 and 2026. I'll now turn it over to the operator for your questions.

Thank you. Our first question is from Elyse Greenspan with Wells Fargo. Please proceed.

Hi, thanks. Good morning. I wanted to start with the ROE guide, right? You guys set that at 12% to 13% for this year. It had been 14% to 16%, right, with the outlook presentation last year.

So I guess the moving pieces to me, right, seem like the weaker stop loss results, the investment in leave management, you also are bringing on One America. And then, Mike, you did say within your prepared remarks that you accept lower prepayment income in 2025. Not sure if I'm missing anything else there that brings the ROE down. And then would the expectation be that you would get back to that target range of 14% to 16% in 26% when stop loss gets back to target results?

Hey, Elyse, it's Mike. Thanks for the question. And maybe I'll step back a bit, but I think you've got the majority of the pieces here. We did not give a specific EPS guide, but we did give a sense through the free cash flow generation to really think about where EPS might land in 2025. I would think about our 90% free cash flow generation is grossing up that $7.5 to get at a EPS of approximately in the mid $8 s.

If you do that net of growth investments, that $50,000,000 we talked about, that's primarily on leave, you're going to get slightly less than $8 As it relates to the ROE piece, I know we have a guide of 12% to 13%. I would think about 2025% as on the high end of that range. And if we adjusted for the growth investments, we'd be above that 13%. Now, Elyse, maybe to your variances, I think you've named them, but let me just hit all of them to make sure we're complete with the answer. So first, you mentioned the leave investments I just did as well.

I would also note in Health Solutions, we are on a journey on enhancing value to our customers around voluntary products that does affect the loss ratios in 2025. Second, within wealth, we are we do have additional spend that's aimed at implementing over $20,000,000,000 of new plans. Outside of One America, we're also expecting fee income to increase and that to be offset by lower spread income. The third piece is share repurchases. We do give a sense of that, so I think you have that piece, Elyse.

And then finally, as you mentioned on prepayments, we're guiding to that being down year over year, approximately $25,000,000 I would highlight this is really not economic. It's just the timing of investment income where prepayments accelerate that versus over time.

Okay. And then on buyback, given that it's more second half weighted, is the expectation that you just are going to buyback a very minimal amount of your shares in the first half of the year? And then, Mike, just on that second piece of my last question, would you expect the I guess, I know you're not laying out 26% ROE right now, but would you expect kind of to go back to that 14% to 16% next year?

Yes. Elyse, thanks for coming back to the ROE piece. So as I mentioned earlier, if you adjust for the leave investment, you'd be north of 13%. The other piece is we're trying to anchor to this free cash flow generation as we shared in the material. We're not only expecting a meaningful increase in free cash flow generation in 'twenty five, but also 2026.

So absolutely, the journey is to get back to that long term 14% to 16%. As it relates to just share repurchases, I would think of them primarily focused in the second half. It was for the reasons Heather mentioned on some really important key growth investments, the One America piece, the Skonset piece and the lead management piece I just mentioned. I would though point your attention to how we thought about capital. You look at 2024, we returned over 100% of free cash flow through share repurchases and dividends.

We mentioned approximately 50% this year, but over that two year period of time, we're talking about approximately $1,200,000,000 of return of capital. Growth investments, they come when they come. We're going to be opportunistic on them, but I think our commitment to our shareholders is that we're going to do that when we see long term shareholder value and we see it with all three of those pieces.

And, Lisa, I'll just reiterate Mike's final point is that we're committed to returning capital to shareholders. And as we've been talking about for a couple of years, we want to continue to be balanced in driving value in the business through the commercial momentum and being opportunistic with investments, whether they be organically or being opportunistic around inorganic.

Our next question is from Tom Gallagher with Evercore ISI. Please proceed.

Good morning. First question is the 50,000,000 strategic spend on leave management and disability admin, will any of that recur into 'twenty six or can we zero that out?

Hey, Tom, it's Mike. I would think of it primarily impacting 2025. And part of that is that we're expecting not only revenue from the leave administration, but also from short term disability that we'll be assuming in 2026. So we see this as kind of more of a breakeven in 2026 and then generating positive earnings in 2027 and beyond. So I think you're thinking about it, right, Tom?

But obviously, as we get deeper in the year, we'll talk more and more about 2026.

That's helpful. And then just want to ask about the stop loss expectation. Obviously, a very wide range of 80 to 90. And it looks like the majority of the improvement from the 95 level is risk selection, not on actually rate versus trend. Just considering it looks like you had an unforced error on risk selection that led you into this situation.

What gives you confidence that you figured out the underwriting side in a better way or what are the lessons learned? Thanks.

Tom, it's Mike. Yes, I'm going to hit the rate increase just briefly before I get to your question on risk selection, which is important. And I think you properly gleaned that we view that as the bigger piece of the improvement in 2025. So first, on the rate increase, we did achieve a twenty one percent average net effective increase for the January 2025 business. I would view that as an average.

So when we look at some of the underperforming blocks, the increase is much higher than 21%, and we've addressed kind of that higher frequency of claims that we talked about in our pricing. On the risk selection, it really is a key focus on known claims. So think about when we see claims in the prior calendar year and making a prediction on how we think that's going to emerge in the following calendar year. And as we looked at known claims in 2023, that was a key driver of the higher loss ratio within January '4 in that book of business. To your question on addressing this, first, I just mentioned about the fact that we feel the nine percent first dollar trend that's much, much higher for a stop loss when it's leveraged that that was adequately priced for.

Second, we were holding firm on requests for data, so we wanted to see the most recent data before finalizing quotes. And third, as we talked about last year, there's a strategy element of this as well and ensuring that the full team understood that the strategy was margin over premium growth, and you saw that in the results. Finally, I've worked very closely with this pricing and underwriting team at the end of the year to make sure that we're very comfortable with what we're communicating as far as the outcomes of this 5% to 15%. I might just make one other comment, Tom, just because I know there's probably a question on the 95%. We are very confident that the reserves that we established in the fourth quarter will be sufficient to cover future claims.

As you can imagine, we've not only been looking at this internally, but we've had external eyes on this as well. And importantly, we're now in February, so we've had a chance to see how the January data has emerged, and that's just strengthened our confidence that what we put up in the fourth quarter is going to be sufficient to cover future claims.

And Tom, the only build I would have to Mike's very detailed response is that you can imagine we are also looking very closely at the completion of the non January 2024 book of business with the same sense of scrutiny. And what we're seeing right now is it's following very similar trends into prior years. And so the actions we took last year to increase pricing, we think has held as well, but we're going to continue to stay very close to it.

Our next question is from Ryan Krueger with KBW. Please proceed.

Hey, thanks. Good morning. My first question was on the wealth flows. I guess, can you give any more perspective on how to think about this in 2025? I think, I guess in particular, I would assume there might be more than normal volatility from shock lapses related to One America.

Yes, Ryan, it's Heather. Thanks. I'll take your question. So as you think about, I'll do the quick look back on '24 before getting to the look on '25. So you think about what we delivered in 2024 and really the main theme is that the fundamentals of our wealth business are strong.

The $2,000,000,000 in the full year DC flows, the 98.5 percent plan retention that Mike mentioned, a little bit more specificity is in 2024, our full service sales were up 17% year over year for 2023. So just thinking about that momentum. As we take a look into 2025, what we see right now is if we do that same comparison of full service known sales for 2025 versus at the same time for 2024, they're up 30%, so an important metric. Mike referenced the $20,000,000,000 of plans and implementation. And just for clarity, those are plans that are one that we that will be funded within 25%, some of which have already funded.

To your point on One America, just as a reminder, the assumption on retention was 90%. So you compare that to the 98.5 of our book of business. So that will create a little bit of noise, as we go throughout the year in terms of flows, but it's very much embedded into our guidance and our financials. And so at the end of the day, we do feel strong in terms of the fundamentals that we see heading into 2025 across well.

Great. And then just a quick one on stop loss. When you include January, what percentage of claims would that typically get you to for the full year cohort?

Ryan, maybe not tracking with your question. Can you ask it differently?

And you said you were through 70% of the claims at the December. And I was wondering when you add in January, how much

Yes. No, Q4 and Q1 is really important, Brian, with respect to just completion. I would think of us approximately another 5% to 10% complete after January. That's the way I would think about it.

Our next question is from Alex Scott with Barclays. Please proceed.

Hey, good morning. I wanted to sort of probe a little bit more on some of the things that are one time in nature in '25 and I guess in particular Health Solutions and just the need to invest in the business. Is there some level of ongoing investment whether it's leave or just other capabilities that you'll continue to build out that we need to just think about a higher run rate of expenses? And I'm just asking because my concern is there's a lot of things that seem like they whip back in 'twenty six and could make people pretty optimistic on the growth you'll get going from 'twenty five to 'twenty six. But I just want to make sure I'm not missing things about ongoing investment in health.

And then maybe if you could also comment on wealth solutions on just the investment to be able to bring on assets and so forth?

Alex, maybe I'll start from a strategic standpoint and then I'll toss it to Mike on the financials. So one of the reasons we wanted to specifically call out the investment in leave management is, we think it's important from a transparency perspective to give investors a view of where we're investing. But I'll hit on the strategic importance of this capability. And we have seen a significant trend in Group Insurance where customer experience really matters. It's no longer just about having the right price or provisions within your insurance products.

And so investing in leave and the fact that employers this is really one of the primary decisions they're making around group insurance and very often the bundle is going with who wins on leave. And that's really evidenced by some of the stats we shared in the presentation that today, we think about it one hundred percent of our leave cases actually have license disability and seventy two percent of our leave cases have supplemental. And we see a significant opportunity. We've been a fast grower in supplemental, and that's one where we see an opportunity to continue to grow there and that's a key component of our workplace. And maybe very briefly on wealth and Jay will provide more in the coming years just as we think about our strategy.

But in wealth, we've talked a lot about taking making investments in retail wealth management and that our clients at the end of the day very often don't have access to a financial advisor. And so, they look to what's offered through the workplace and also needing broader advisory capabilities and really out of plan capabilities. So there, we're investing in the number of advisors. We're also investing in technology capabilities to make our advisors more productive and the onboarding experience more seamless for clients that ultimately we think is going to drive growth. But Mike?

Yes. No, look, Alex, the only build I have with Heather on health is just kind of reiterate what I shared with Tom just a moment ago in that the question around how do we think about leave next year. Yes, a portion of those expenses will exist next year, but the offset on the revenue side as we get paid for the leave administration as well as onboard short term disability. And so that's a key piece to think about. On the wealth side, I think just everything Heather said, the only thing I would say on a kind of more of a technical note is that as we give the modeling considerations for wealth, we did include commissions and the intangible effect in the guide that we haven't done that before and the reason was the One America piece.

One America is obviously having an effect on expenses in 2025 and you have your normal seasonal effect across all the segments.

Got it. And maybe a follow-up actually related to the last piece there. In wealth, I mean, if I look at the 1Q guide that you guys are pointing to, it looks a little over $200,000,000 of pretax earnings. I think about a year ago, I think the normalized number after all, it was around $200,000,000 So seemingly not a whole lot of growth there and I get there's some weight that's maybe a little unique to $25,000,000 But when I think about One America and the contribution, is it that it's not really contributing anything yet in 1Q to bottom line and it grades in throughout the year or is it in there? I'm just trying to understand the 75 mil from One America and whether that begins showing up more when we think about 2Q, 3Q?

Yes, Alex. I think just that first quarter, as Heather was talking about, I mean, there is a large investment in wealth around that $20,000,000,000 plus of plans and implementation. So that's having an effect at the beginning of the year. Obviously, there will be revenue to follow. To your big picture question, continue to be fully on plan for that $75,000,000 of earnings we're expecting to add within wealth.

I think one of the offsets is those expenses I just mentioned. And you also see a bit of an offset with respect to spread income where spread balances were down year over year.

Our next question is from Joel Herwitz with Darlene and Partners. Please proceed.

Hey, good morning. Can you just provide some more color on what you're doing in the voluntary business that's driving the loss experience higher? And is this in response to competition? Or do you think this is needed to improve persistency of the business or drive higher growth?

Voya Financial (VOYA) Q4 2024 Earnings Call Transcript

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