Voya Financial, Inc. (VOYA Quick QuoteVOYA - Free Report) reported fourth-quarter 2021 adjusted operating earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate by 28.4%. The bottom line remained flat year over year.

Voya Financial’s results highlight solid alternative investment income, consistent growth across its businesses, and reduced benefits and expenses. However, the upside has been partly offset by a year-over-year decline in revenues.

Behind the Headlines

Total revenues amounted to $1.7 billion, which declined 19.2% year over year in the fourth quarter.

Net investment income declined 18.4% year over year to $673 million. Meanwhile, fee income of $446 million decreased 18.9% year over year. Premiums totaled $544 million, which slumped 8.9% year over year in the quarter under review.

Total benefits and expenses fell 20.5% year over year to $1.4 billion due to lower interest credited and other benefits to contract owners/policyholders, coupled with operating expenses.

As of Dec 31, 2021, VOYA’s assets under management and assets under administration & advisement totaled $739 billion.

Segmental Update

Wealth Solutions reported adjusted operating earnings of $241 million, which slid 6.6% year over year. The downside was due to less favorable DAC/VOBA and other intangibles unlocking and escalating administrative expenses stemming from the timing of specific advertising and technology-related expenses, partly offset by improved investment income and better fee-based margin.

Investment Management’s adjusted operating earnings amounted to $59 million, which tumbled 34.4% year over year in the fourth quarter on account of a decrease in fee-based margin. However, the segment’s results partly benefited on the back of a rise in investment capital revenues and reduced administrative expenses.

It had $9.5 billion of institutional net inflows in the fourth quarter, against the prior-year quarter’s outflow of $563 million.

Health Solutions posted adjusted operating earnings of $33 million, which plunged 34% year over year. Results were dampened by increased Group Life loss ratio and business growth resulting in elevated administrative expenses. However, the segment gained on improved investment income.

Corporate incurred adjusted operating losses of $54 million, narrower than the prior-year quarter’s loss of $94 million. The transition service agreements of Voya Financial, continued removal of stranded costs linked with the Individual Life transaction and reduced interest expenses contributed to the segment’s better performance.

Financial Update

Voya Financial exited the fourth quarter with cash and cash equivalents of $1.4 billion, which slipped 6.7% year over year.

Total investments amounted to $45.6 billion, down 19.8% year over year.

Long-term debt at the fourth-quarter end declined 14.8% year over year to $2.6 billion.

Financial leverage ratio improved 60 basis points (bps) year over year to 27.6%.

As of Dec 31, 2021, book value per share (excluding AOCI) was $51.40, which increased 38.8% year over year.

Voya Financial exited the fourth quarter with roughly $1.5 billion in excess capital.

Capital Deployment

Voya Financial returned $331 million to its shareholders in the form of share repurchases worth $310 million and dividends worth $21 million in the fourth quarter.

First-Quarter 2022 Dividend Declared

On Jan 27, 2022, the board of directors at VOYA approved a first-quarter 2022 common stock dividend of 20 cents per share, which seems to be in line with the company’s endeavor of maintaining its dividend yield above 1%. The first-quarter dividend will be paid on Mar 30, 2022 to shareholders of record as of Feb 25.

Full-Year Update

For 2021, Voya Financial posted record adjusted operating earnings of $8.37 per share, which beat the Zacks Consensus Estimate of $7.97. The bottom line increased nearly three-fold year over year.

In the year, VOYA achieved a record level of excess capital deployed amounting to $1.7 billion (via $1.1 billion in share buybacks, $500 million in redemption of senior debt and $80 million through dividends).

Zacks Rank    

Voya Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Insurers

Of the insurance industry players that have reported fourth-quarter results so far, MetLife, Inc. (MET Quick QuoteMET - Free Report) , The Hartford Financial Services Group, Inc. (HIG Quick QuoteHIG - Free Report) and AXIS Capital Holdings Limited (AXS Quick QuoteAXS - Free Report) beat the Zacks Consensus Estimate for earnings.

MetLife reported fourth-quarter 2021 adjusted operating earnings of $2.39 per share, which surpassed the Zacks Consensus Estimate by 52.8%. The bottom line improved 6.9% over a year. MET’s adjusted operating revenues of $20 billion dipped 1.8% year over year but outpaced the Zacks Consensus Estimate by 19.8%. Adjusted net investment income of MetLife amounted to $5.2 billion, which rose 7% year over year.

Hartford Financial reported fourth-quarter 2021 adjusted operating earnings of $2.02 per share, which surpassed the Zacks Consensus Estimate by 32.9% and rose 14.8% year over year. Total operating revenues of HIG increased 7.4% year over year to $3.7 billion in the fourth quarter. The top line outpaced the consensus mark by 2.1%. Hartford Financial’s net investment income climbed 3.1% year over year to $573 million in the quarter under review.

AXIS Capital reported adjusted fourth-quarter 2021 earnings of $2.13 per share, which beat the Zacks Consensus Estimate by 58% and rebounded from the year-ago loss of 20 cents. AXS’ total operating revenues of $1.4 billion outpaced the Zacks Consensus Estimate by 11.2% and climbed 15% year over year. Gross premiums written of AXIS Capital increased 16% year over year to $1.6 billion.