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Voya Financial (VOYA) Q2 Earnings Beat, Revenues Fall Y/Y
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Voya Financial, Inc. (VOYA - Free Report) reported second-quarter 2022 adjusted operating earnings of $1.67 per share, which surpassed the Zacks Consensus Estimate by 20.1%. The bottom line decreased 24.1% year over year.
Voya Financial’s results reflected lower investment income, higher non-COVID claims in Group Life and higher loss ratios in Stop Loss and Voluntary, lower fee-based margin, unfavorable change in DAC/VOBA and other intangibles unlocking. It was offset by higher premiums and lower administrative expenses.
Voya Financial, Inc. Price, Consensus and EPS Surprise
Total revenues amounted to $1.5 billion, which decreased 39.3% year over year. Net investment income declined 11.4% year over year to $581 million. Meanwhile, fee income of $411 million decreased 5.7% year over year. Premiums totaled $595 million increased 15.3% from the year-ago quarter.
Total expenses were $1.4 billion, down 7.4% from the year-ago quarter. As of Jun 30, 2022, VOYA’s assets under management and assets under administration & advisement totaled $644.4 billion.
Segmental Update
Wealth Solutions reported adjusted operating earnings of $186 million, which decreased 36.9% year over year. The downside was due to lower investment income, lower fee-based margin, unfavorable change in DAC/VOBA and other intangibles unlocking, partially offset by lower administrative expenses. Wealth Solutions however generated positive Full Service net flows of $1 billion in the reported quarter.
Health Solutions’ adjusted operating earnings amounted to $47 million, which decreased 25.4% year over year in the second quarter accounting for a lower investment income, higher net expenses, higher non-COVID claims in Group Life and higher loss ratios in Stop Loss and Voluntary. Total annualized in-force premiums were $2.7 billion, up 9.3% year over year. The increase reflects growth across all product lines, including a 24% increase in Voluntary.
Investment Management posted adjusted operating earnings of $40 million, which plunged 39.4% year over year attributable to lower investment capital revenues and higher administrative expenses. Total assets under management were $236 billion as of Jun 30, 2022, down 7% year over year. Institutional net flows for the quarter were $2 billion.
Corporate incurred adjusted operating losses of $49 million, narrower than the prior-year quarter’s loss of $71 million, attributable to lower incentive compensation, lower interest expense due to debt extinguishments and lower net stranded costs associated with the Individual Life transaction.
Financial Update
Voya Financial exited the second quarter with cash and cash equivalents of $954 million, which decreased 45.9% year over year. Total investments amounted to $40.9 billion, down 11% year over year.
Long-term debt at second-quarter end declined 19.6% year over year to $2.4 billion. The financial leverage ratio deteriorated 670 basis points (bps) year over year to 36.9%. As of Jun 30, 2022, book value per share (excluding AOCI) was $49.71, which increased 6% year over year. Voya Financial exited the second quarter with roughly $700 million in excess capital, including about $100 million generated in the second quarter.
Capital Deployment
Voya entered into an accelerated share repurchase (ASR) agreement to repurchase $250 million worth shares — $200 million of which were delivered during the second quarter, the remaining $50 million will be delivered in the third quarter of 2022.
Also, in the second quarter, Voya received nearly $55 million worth of shares related to an ASR agreement that was entered into with a third party in the first quarter of 2022.
Accounting for the earlier mentioned $250 million ASR that Voya entered into the second quarter, VOYA had nearly $271 million remaining under its share repurchase authorization.
On Jul 28, 2022, the board of directors at VOYA approved a third-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%.
Of the insurance industry players that have reported second-quarter results so far, The Hartford Financial Services Group, Inc. (HIG - Free Report) , Willis Towers Watson Public Limited Company (WTW - Free Report) and Chubb Limited (CB - Free Report) beat the respective Zacks Consensus Estimate for earnings.
The Hartford Financial Services Group reported second-quarter 2022 adjusted operating earnings of $2.15 per share, which beat the Zacks Consensus Estimate by 41.5%. The bottom line, however, decreased 8% year over year.
Hartford Financial’s operating revenues amounted to $3,765 million, which improved from $3,568 million in the second quarter of 2022. Also, the top line beat the consensus mark by 1.5%. Total earned premium of $4,810 million beat the consensus mark of $4,776.3 million and increased from $4,460 million a year ago. Net investment income of $541 million declined from $581 million a year ago due to lower annualized return on alternative investments. The reported figure was below the Zacks Consensus Estimate of $564.5 million.
Willis Towers Watson delivered second-quarter 2022 adjusted earnings of $2.32 per share, which beat the Zacks Consensus Estimate by 0.4%. The bottom line improved 9% year over year.
Willis Towers Watson posted adjusted consolidated revenues of $2.03 billion, down 3% year over year on a reported basis. Revenues increased 3% on an organic basis. The top line however missed the Zacks Consensus Estimate by 2.3%. Adjusted operating income was $314 million, down 1% year over year. Margin expanded 30 bps to 15.5%.
Chubb reported second-quarter 2022 core operating income of $2.40 per share, which outpaced the Zacks Consensus Estimate by about 17%. The bottom line also improved 16% from the year-ago quarter. Net premiums written improved 7.9% year over year to $10.3 billion in the quarter. Net premiums earned rose 8.4% to $9.6 billion. Adjusted net investment income was a record $950 million, up 0.5%.
Property and casualty underwriting income was a record $1.4 billion, up 21.1% from the year-ago quarter. Chubb incurred an after-tax catastrophe loss of $241 million, 6.6% wider year over year. The combined ratio improved 150 bps on a year-over-year basis to a record 84% in the quarter under review.
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Voya Financial (VOYA) Q2 Earnings Beat, Revenues Fall Y/Y
Voya Financial, Inc. (VOYA - Free Report) reported second-quarter 2022 adjusted operating earnings of $1.67 per share, which surpassed the Zacks Consensus Estimate by 20.1%. The bottom line decreased 24.1% year over year.
Voya Financial’s results reflected lower investment income, higher non-COVID claims in Group Life and higher loss ratios in Stop Loss and Voluntary, lower fee-based margin, unfavorable change in DAC/VOBA and other intangibles unlocking. It was offset by higher premiums and lower administrative expenses.
Voya Financial, Inc. Price, Consensus and EPS Surprise
Voya Financial, Inc. price-consensus-eps-surprise-chart | Voya Financial, Inc. Quote
Behind the Headlines
Total revenues amounted to $1.5 billion, which decreased 39.3% year over year. Net investment income declined 11.4% year over year to $581 million. Meanwhile, fee income of $411 million decreased 5.7% year over year. Premiums totaled $595 million increased 15.3% from the year-ago quarter.
Total expenses were $1.4 billion, down 7.4% from the year-ago quarter.
As of Jun 30, 2022, VOYA’s assets under management and assets under administration & advisement totaled $644.4 billion.
Segmental Update
Wealth Solutions reported adjusted operating earnings of $186 million, which decreased 36.9% year over year. The downside was due to lower investment income, lower fee-based margin, unfavorable change in DAC/VOBA and other intangibles unlocking, partially offset by lower administrative expenses. Wealth Solutions however generated positive Full Service net flows of $1 billion in the reported quarter.
Health Solutions’ adjusted operating earnings amounted to $47 million, which decreased 25.4% year over year in the second quarter accounting for a lower investment income, higher net expenses, higher non-COVID claims in Group Life and higher loss ratios in Stop Loss and Voluntary. Total annualized in-force premiums were $2.7 billion, up 9.3% year over year. The increase reflects growth across all product lines, including a 24% increase in Voluntary.
Investment Management posted adjusted operating earnings of $40 million, which plunged 39.4% year over year attributable to lower investment capital revenues and higher administrative expenses. Total assets under management were $236 billion as of Jun 30, 2022, down 7% year over year. Institutional net flows for the quarter were $2 billion.
Corporate incurred adjusted operating losses of $49 million, narrower than the prior-year quarter’s loss of $71 million, attributable to lower incentive compensation, lower interest expense due to debt extinguishments and lower net stranded costs associated with the Individual Life transaction.
Financial Update
Voya Financial exited the second quarter with cash and cash equivalents of $954 million, which decreased 45.9% year over year. Total investments amounted to $40.9 billion, down 11% year over year.
Long-term debt at second-quarter end declined 19.6% year over year to $2.4 billion. The financial leverage ratio deteriorated 670 basis points (bps) year over year to 36.9%. As of Jun 30, 2022, book value per share (excluding AOCI) was $49.71, which increased 6% year over year. Voya Financial exited the second quarter with roughly $700 million in excess capital, including about $100 million generated in the second quarter.
Capital Deployment
Voya entered into an accelerated share repurchase (ASR) agreement to repurchase $250 million worth shares — $200 million of which were delivered during the second quarter, the remaining $50 million will be delivered in the third quarter of 2022.
Also, in the second quarter, Voya received nearly $55 million worth of shares related to an ASR agreement that was entered into with a third party in the first quarter of 2022.
Accounting for the earlier mentioned $250 million ASR that Voya entered into the second quarter, VOYA had nearly $271 million remaining under its share repurchase authorization.
On Jul 28, 2022, the board of directors at VOYA approved a third-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%.
Zacks Rank
VOYA 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 second-quarter results so far, The Hartford Financial Services Group, Inc. (HIG - Free Report) , Willis Towers Watson Public Limited Company (WTW - Free Report) and Chubb Limited (CB - Free Report) beat the respective Zacks Consensus Estimate for earnings.
The Hartford Financial Services Group reported second-quarter 2022 adjusted operating earnings of $2.15 per share, which beat the Zacks Consensus Estimate by 41.5%. The bottom line, however, decreased 8% year over year.
Hartford Financial’s operating revenues amounted to $3,765 million, which improved from $3,568 million in the second quarter of 2022. Also, the top line beat the consensus mark by 1.5%. Total earned premium of $4,810 million beat the consensus mark of $4,776.3 million and increased from $4,460 million a year ago. Net investment income of $541 million declined from $581 million a year ago due to lower annualized return on alternative investments. The reported figure was below the Zacks Consensus Estimate of $564.5 million.
Willis Towers Watson delivered second-quarter 2022 adjusted earnings of $2.32 per share, which beat the Zacks Consensus Estimate by 0.4%. The bottom line improved 9% year over year.
Willis Towers Watson posted adjusted consolidated revenues of $2.03 billion, down 3% year over year on a reported basis. Revenues increased 3% on an organic basis. The top line however missed the Zacks Consensus Estimate by 2.3%. Adjusted operating income was $314 million, down 1% year over year. Margin expanded 30 bps to 15.5%.
Chubb reported second-quarter 2022 core operating income of $2.40 per share, which outpaced the Zacks Consensus Estimate by about 17%. The bottom line also improved 16% from the year-ago quarter. Net premiums written improved 7.9% year over year to $10.3 billion in the quarter. Net premiums earned rose 8.4% to $9.6 billion. Adjusted net investment income was a record $950 million, up 0.5%.
Property and casualty underwriting income was a record $1.4 billion, up 21.1% from the year-ago quarter. Chubb incurred an after-tax catastrophe loss of $241 million, 6.6% wider year over year. The combined ratio improved 150 bps on a year-over-year basis to a record 84% in the quarter under review.