Voya Financial (VOYA Quick QuoteVOYA - Free Report) reported fourth-quarter 2022 adjusted operating earnings of $2.18 per share, which surpassed the Zacks Consensus Estimate by 42.5%. The bottom line increased 14.7% year over year.

The increase reflects the benefits of favorable tax adjustments primarily related to foreign tax credits, higher investment income in Wealth Solutions, the benefit of the Allianz Global Investors transaction in Investment Management and higher underwriting results in Health Solutions.

Behind the Headlines

Adjusted operating revenues amounted to $1.5 billion, which decreased 4.4% year over year. Net investment income declined 18.6% year over year to $548 million. Meanwhile, fee income of $452 million increased 1.3% year over year. Premiums totaled $610 million, up 12.1% from the year-ago quarter.

Total benefits and expenses were $1.5 billion, up 6.7% from the year-ago quarter.

As of Dec 31, 2022, VOYA’s assets under management totaled $321 billion, up 22% year over year.

Segmental Update

Wealth Solutions reported adjusted operating earnings of $148 million, which decreased 38.5% year over year. The downside was due to lower investment income and lower fee-based margin, partially offset by a favorable change in DAC/VOBA and other intangibles unlocking and lower administrative expenses. However, Wealth Solutions generated positive full-service net flows of $952 million in the reported quarter, up 207.6% year over year.

Health Solutions adjusted operating earnings amounted to $74 million, which increased 124.4% year over year in the fourth quarter, accounting for the higher underwriting results, partially offset by lower overall investment income and higher net expenses. Total annualized in-force premiums were $2.8 billion, up 10.7% year over year. The increase reflects growth across all product lines, including a 20% increase in Voluntary.

Investment Management posted adjusted operating earnings of $57 million, which plunged 3.4% year over year, attributable to lower investment capital revenues and higher administrative expenses. Total assets under management were $321 billion as of Dec 31, 2022, up 21.8% year over year. Institutional net inflows for the quarter were $345 million.

Corporate incurred an adjusted operating loss of $52 million, narrower than the prior-year quarter’s loss of $54 million, which reflected lower interest expense due to debt extinguishments, partially offset by an unfavorable change in amortization of intangibles.

Full-Year Highlights

Adjusted operating revenue was $6.1 billion, down 5.2% from 2021. Adjusted operating earnings were $7.58 per share, down 9.4% from 2021.

Net investment income and fee income for 2022 were $1.8 billion and 1.7 billion, down 20.5% and 1.4%, respectively.

Financial Update

Voya Financial exited 2022 with cash and cash equivalents of $919 million, which decreased 34.4% year over year. Total investments amounted to $39.1 billion, down 14.19% year over year.

Long-term debt in 2022-end declined 19.3% year over year to $2.1 billion. The financial leverage ratio deteriorated 850 basis points year over year to 36.1%. As of Dec 31, 2022, book value per share (excluding AOCI) was $58.14, which increased 13.1% year over year.

Voya Financial exited the fourth quarter with more than $0.9 billion in excess capital.

Acquisition Update

On Jan 24, 2023, Voya completed the acquisition of Benefitfocus, Inc., an industry leader in benefits administration technology, which will help accelerate Voya’s workplace-centered strategy.

Capital Deployment

During 2022, Voya utilized $750 million of excess capital to repurchase shares, $360 million to extinguish subordinated debt and $80 million to pay dividends.

On Jan 26, 2023, Voya's board of directors declared a common stock dividend of $0.20 per share for the first quarter of 2023.

ZacksRank

Voya Financial currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Insurers

Of the insurers that have reported fourth quarter results so far, bottom line of Reinsurance Group of America, Incorporated (RGA Quick QuoteRGA - Free Report) beat the Zacks Consensus estimate while that of Unum Group (UNM Quick QuoteUNM - Free Report) and Aflac Incorporated (AFL Quick QuoteAFL - Free Report) missed the consensus estimate.

Reinsurance Group reported fourth-quarter 2022 adjusted operating income of $2.99 per share, which missed the Zacks Consensus Estimate by 14.8%. RGA had reported an operating loss of 56 cents per share in the prior-year quarter. Operating revenues of $4.4 billion increased 2.2% year over year. The top line beat the Zacks Consensus Estimate by 1.2%.Net premiums of $3.4 billion rose 1.1% year over year.

Unum posted operating net income of $1.43 per share missed the Zacks Consensus Estimate by 2.1% but came in line with our estimate. The bottom line increased 60.7% year over year. Total operating revenues of Unum Group were $3 billion, up 0.3% year over year, The top line missed the Zacks Consensus Estimate by 0.04% and was almost in line with our estimate. Premium increased 1.5% from the prior-year quarter to $2.4 billion and was in line with our estimate.

Aflac reported fourth-quarter 2022 adjusted EPS of $1.29, which beat the Zacks Consensus Estimate of $1.21 and our estimate of $1.22. The bottom line increased 0.8% year over year. Revenues dropped 26.2% year over year to $4,010 million in the quarter under review and were lower than our estimate of $4,467 million as well. The top line missed the consensus mark by 10.7%. Adjusted net investment income fell 5.9% year over year to $840 million