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Voya Financial (VOYA) Divests Business to Resolution Life
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Voya Financial, Inc. (VOYA - Free Report) has divested all its individual life insurance and other legacy non-retirement annuities businesses to Resolution Life US, a new holding company established by Resolution Life Group.
The Individual Life transaction has resulted in the offloading of substantially all its in-force individual life business, which includes Security Life of Denver Insurance Company (SLD), Midwestern United Life Insurance Company (MUL) and certain other affiliates, as well as the reinsurance of its remaining in-force individual life and annuity blocks. The company will no longer report its Individual Life business as an operating segment.
Over the last few years, the Individual Life segment has been experiencing lower premiums while expenses have been escalating. Also, the segment has experienced unfavorable mortality due to COVID-related losses in the third quarter of 2020, which were in line with the company’s expectations. Thus, following a strategic review, the company decided to divest this business to Resolution Life.
This divestiture has assisted Voya in realizing significant value for the legacy blocks. Also, it has enabled the life-insurer to focus on high-growth, high-return, capital-light businesses. Voya’s portfolio of businesses has been streamlined, capital has been freed up and market and interest rate risk limited with the completion of this deal.
Voya will also benefit from its diverse revenue and earnings sources and will have an improved risk profile with reduced interest rate, credit and mortality risk.
With the completion of this transaction, Voya Financial is now expected to achieve further organic growth across its Retirement, Investment Management and Employee Benefits businesses. These segments are expected to drive the company’s earnings. These businesses are higher-growth, higher-return, capital-light businesses boasting a solid presence.
Moreover, per the transaction deal, Voya Investment Management (IM) has been designated as the investment manager of nearly $20 billion of core fixed income and specialty assets related with the closed blocks. Also, Voya IM will serve as one of the preferred asset management partners for Resolution Life. This will boost Voya IM to furnish experienced long-term asset management expertise to cater to the requirements of insurance companies.
Shares of this Zacks Rank #3 (Hold) life insurer have lost 2.3% in the past year compared with the industry’s decline of 16.3%. Strong fundamentals are expected to drive shares going forward.
Sun Life Financial surpassed estimates in each of the last four quarters. It has a trailing four-quarter earnings surprise of 14.78%, on average.
Reinsurance Group surpassed estimates in two of the last four quarters. It has a trailing four-quarter earnings surprise of 64.17%, on average.
Primerica beat the Zacks Consensus Estimate in the trailing four quarters, the average being 10.04%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Voya Financial (VOYA) Divests Business to Resolution Life
Voya Financial, Inc. (VOYA - Free Report) has divested all its individual life insurance and other legacy non-retirement annuities businesses to Resolution Life US, a new holding company established by Resolution Life Group.
The Individual Life transaction has resulted in the offloading of substantially all its in-force individual life business, which includes Security Life of Denver Insurance Company (SLD), Midwestern United Life Insurance Company (MUL) and certain other affiliates, as well as the reinsurance of its remaining in-force individual life and annuity blocks. The company will no longer report its Individual Life business as an operating segment.
Over the last few years, the Individual Life segment has been experiencing lower premiums while expenses have been escalating. Also, the segment has experienced unfavorable mortality due to COVID-related losses in the third quarter of 2020, which were in line with the company’s expectations. Thus, following a strategic review, the company decided to divest this business to Resolution Life.
This divestiture has assisted Voya in realizing significant value for the legacy blocks. Also, it has enabled the life-insurer to focus on high-growth, high-return, capital-light businesses. Voya’s portfolio of businesses has been streamlined, capital has been freed up and market and interest rate risk limited with the completion of this deal.
Voya will also benefit from its diverse revenue and earnings sources and will have an improved risk profile with reduced interest rate, credit and mortality risk.
With the completion of this transaction, Voya Financial is now expected to achieve further organic growth across its Retirement, Investment Management and Employee Benefits businesses. These segments are expected to drive the company’s earnings. These businesses are higher-growth, higher-return, capital-light businesses boasting a solid presence.
Moreover, per the transaction deal, Voya Investment Management (IM) has been designated as the investment manager of nearly $20 billion of core fixed income and specialty assets related with the closed blocks. Also, Voya IM will serve as one of the preferred asset management partners for Resolution Life. This will boost Voya IM to furnish experienced long-term asset management expertise to cater to the requirements of insurance companies.
Shares of this Zacks Rank #3 (Hold) life insurer have lost 2.3% in the past year compared with the industry’s decline of 16.3%. Strong fundamentals are expected to drive shares going forward.
Stocks to Consider
Some better-ranked stocks from the same space are Sun Life Financial (SLF - Free Report) , Reinsurance Group of America (RGA - Free Report) and Primerica (PRI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sun Life Financial surpassed estimates in each of the last four quarters. It has a trailing four-quarter earnings surprise of 14.78%, on average.
Reinsurance Group surpassed estimates in two of the last four quarters. It has a trailing four-quarter earnings surprise of 64.17%, on average.
Primerica beat the Zacks Consensus Estimate in the trailing four quarters, the average being 10.04%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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