Q4 2021 Voya Financial Inc Earnings Call

[music].

Good morning, and welcome to the Voya financial fourth quarter and full year 2021 earnings conference all participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing star followed by zero on your telephone keypad. After today's presentation, there will be an <unk>.

Speaker 1: Good morning and welcome to the VOYA Financial fourth quarter and full year 2021 earnings conference.

Speaker 1: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star followed by zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star two.

Opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star two participants are limited to one question and one follow up. Please note that this event is being recorded I would now like to turn the conference over to Michael Katz EVP Finance.

Speaker 1: Participants are limited to one question and one follow-up. Please note that this event is being recorded. I would now like to turn the conference over to Michael Katz, EVP, Finance, Strategy, and Investor Relations. Thank you. Please go ahead.

<unk> and Investor Relations. Thank you. Please go ahead.

Speaker 2: Thank you and good morning. Welcome to Voya Financial's fourth quarter and full year 2021 earnings conference call. We appreciate all of you who have joined us for this call. As a reminder, material for today's call are available on our website at investors.voya.com or via the web.

Thank you and good morning.

The Voya Financial's fourth quarter and full year 2021 earnings conference call. We appreciate all of you who have joined US for this call as a reminder, materials for today's call are available on our website at investors Voya dot com or via the webcast.

Turning to slide two some.

Speaker 2: Turning to slide two, some of the comments made during this conference call may contain forward-looking statements within the meaning of federal securities law. I refer you to the slide for more information.

Some of the comments made during this conference call may contain forward looking statements within the meaning of federal Securities law.

I refer you to this slide for more information.

We will also be referring today to certain non-GAAP financial measures GAAP reconciliations are available in our press release and financial supplement found on our website investors Voya Dot com.

Speaker 2: We will also be referring today to certain non-GAF financial measures. GAF reconciliations are available in our press release and financial supplement found on our website, investors.boya.com.

Speaker 2: Joining me on the call are Rod Martin, our Chairman and Chief Executive Officer, as well as Mike Smith, our Vice Chairman and CFO . After their prepared remarks, we will take your questions.

Joining me on the call are Rod Martin <unk>, our chairman and Chief Executive Officer, as well as Mike Smith, Our Vice Chairman and CFO .

After their prepared remarks, we will take your questions.

For that Q&A session. We have also invited our vice chairman and Chief growth Officer, Charlie Nelson as well as the heads of our businesses, specifically Heather Law Valley, well solutions pristine hurts sellers investment management, and Rob Group Health solutions with that let's turn to <unk>.

Speaker 2: For that Q&A session, we have also invited our Vice Chairman and Chief Growth Officer, Charlie Nelson, as well as the heads of our businesses, specifically Heather Lavallee.

Speaker 2: Christine Hertzellers, Investment Management, and Rob Grupka, Health Solutions.

Speaker 2: With that, let's turn to slide three, as I would like to turn the call.

Slide three as I would like to turn the call.

Over to Rod.

Good morning, let's begin on slide four with some key themes.

Speaker 3: Good morning. Let's begin on slide four with some key themes.

Speaker 3: In 2021, we delivered strong results, including organic growth across our biz...

In 2021, we delivered strong results, including organic growth across our businesses margin expansion and significant excess capital generation.

Speaker 3: margin expansion, and significant excess capital that is the source of our infrastructure singing

For the full year, we achieved record adjusted operating earnings of $1 $3 billion.

Speaker 3: For the full year, we achieved record adjusted operating earnings of $1.3 billion.

We achieved this record not long since we divested our life and annuities businesses.

Speaker 3: We achieved this record not long since we divested our life and annuities.

Speaker 3: This is a clear demonstration of how our health, wealth, and investment solutions focus is driving further profitable growth for VoIP.

This is a clear demonstration of how our health wealth and investment solutions focus is driving further profitable growth for Hawaii.

For the fourth quarter adjusted operating earnings were $1 90 per diluted share.

Speaker 3: For the fourth quarter, adjusted operating earnings were $1.90 per diluted share.

Underlying our performance was both strong alternative investment income as well as continued organic growth in our businesses.

Speaker 3: Underlining our performance was both strong alternative investment income as well as continued organic growth in our business

Notably all of our businesses exceeded or achieved the high end of our organic growth targets for 2021.

Speaker 3: Notably, all of our businesses exceeded or achieved the high end of our organic growth targets for 2021.

Well solutions full year 2021 full service recurring deposits reached $12 $1 billion.

Speaker 3: For well solutions, four year 2021 full service recurring deposits reached $12.1 billion, up 9% compared with the prior year period.

Up 9% compared with the prior year period.

Speaker 3: And we generated positive full service net flows of $576 million in 2021.

And we generated positive full service net flows of $576 million in 2021.

In investment management, we generated $7 $8 billion of net inflows during 2021, representing more than 4% organic growth.

Speaker 3: In investment management, we generated $7.8 billion of net inflows during 2021, representing more than 4% organic growth.

And then the fourth quarter, we achieved record net inflows of $9 billion.

Speaker 3: And in the fourth quarter, we achieved record net inflows of $9 billion, which includes significant inflows from several large men.

Which includes significant inflows from several large mandates.

Speaker 3: In-health solutions, in-force premiums grew 10% compared with a prior year period, which reflects growth across all products.

In health solutions in force premiums grew 10% compared with the prior year period, which reflects growth across all product lines.

Beyond the organic growth that we deliver we continued to demonstrate the power of voice high free cash flow businesses.

Speaker 3: The organic growth that we delivered, we continue to demonstrate the power of voyaged high pre-cash lovis.

This drives a free cash flow yield, which is one of the highest in the industry.

Speaker 3: This drives a pre-cash flow yield, which is one of the highest in the industry.

In 2021, we generated $1 billion of excess capital organically.

Speaker 3: In 2021, we generated $1 billion of excess capital organic.

This has enabled us to build on our capital return track record of deploying a record $1 7 billion.

Speaker 3: This is the aim of us to build on our capital return track record, deploying a record of $1.7 billion of excess capital this year.

Of excess capital this year.

Speaker 3: And with the continued benefit of our high free cashable businesses, we've concluded the year with approximately $1.5 billion of excess cash.

And with the continued benefit of our high free cash flow businesses. We concluded the year with approximately $1 5 billion of excess capital.

Since our IPO, we've returned approximately $8 billion to shareholders through both share repurchases and dividends.

Speaker 3: sensor IPO, we've returned approximately $8 billion to shareholders through both share repurchases and dividends.

As we move forward, we will continue to be disciplined and balanced with our use of capital.

Speaker 3: As we move forward, we will continue to be disciplined and balanced with our use of calcium.

Speaker 3: We've delivered another year of strong organic growth, record excess capital generation and deployment, and significant EPS growth. These themes will remain our focus as we advance our strategy and the three-year growth plan that we shared with you at Invest.

We have delivered another year of strong organic growth record excess capital generation and deployment and significant EPS growth. These themes will remain our focus as we advanced our strategy and the three year growth plan that we shared with you at Investor Day.

As I shared in November our strategy puts the needs of employers employees and intermediaries at the center.

Speaker 3: As I shared in November , our strategy puts the needs of employers, employees, and intermediaries at the center.

Of all that we do we help employers optimize their benefit spend.

Speaker 3: of all that we do. We help employers optimize their benefits.

We enabled employees to make the right financial decisions.

Speaker 3: We enable the employees to make the right financial assistance.

Speaker 3: And we provide investment capabilities to meet the long-term needs of institutions and retirement plan for

And we provide investment capabilities to meet the long term needs of institutions and retirement plan participants.

By bringing our innovative resources and tools to customers. We can help them achieve better outcomes in short our strategy and focus will help drive our growth plans and create further value for all of our stakeholders.

Speaker 3: By bringing our innovative thinking, resources, and tools to customers, we can help them achieve

Speaker 3: In short, our strategy and focus will help drive our growth plans and create further value for all of our stakeholders.

Turning to slide five.

Our focus on values and culture continue to differentiate voya.

Speaker 3: Our focus on values and culture continue to differentiate boys.

Most recently, we were honored to earn the following recognitions the Bloomberg gender equality index for the seventh consecutive year.

Speaker 3: Most recently, we were honored to earn the following recognitions. The Bloomberg Gender Equality Index for the seventh consecutive

Speaker 3: the Dow Jones Sustainable Index for the sixth consecutive year. And as one of only eight companies included in the North American diversified financial services category.

Dow Jones sustainable index for the sixth consecutive year as one of only eight companies included in the North American diversified financial services category.

Speaker 3: A 2021 best place to work in money management by pensions and investments for the seventh consecutive

A 2021 best place to work in money management by pensions and investments for the seventh consecutive year and once again earnings recognition on the human rights campaign's 2022, corporate equality index with a perfect score for the 17th consecutive year.

Speaker 3: And once again, earning recognition on the human rights campaigns, 2022 corporate equality index with a perfect score for the 17th consecutive.

The actions of our people and our company reflect the strength of our culture and how that carries through and all that we do well.

Speaker 3: The actions of our people and our company reflect the strength of our culture and how that carries through in all that we do.

Speaker 3: With that, let me ask Mike to provide more details on our performance and results.

With that let me ask Mike to provide more details on our performance and results.

Thank you Rod.

Speaker 4: Let me begin by saying I am proud of all that our team has accomplished in 2020.

Let me begin by saying I am proud of all that our team has accomplished in 2021 we.

Speaker 4: We delivered a record year of adjusted operating earnings and generated a significant amount of excess capital. We shared our outlook for VOYA at our 2021 Investor Day and the exciting opportunity to share our outlook for VOYA.

We delivered a record year of adjusted operating earnings and generated a significant amount of excess capital we.

We shared our outlook for Voya at our 2021 Investor day, and the exciting opportunities we have to accelerate growth for our business.

Speaker 4: We are confident as we look forward to continued success in 2022.

We're confident as we look forward to continued success in 2022.

Turning to slide seven.

Speaker 4: The adjusted operating earnings were $1.90 per share in the fourth quarter of 2021, which included first, 55 cents of net alternative and prepayment investment income above long-term expectations.

Operating earnings were $1 90 per share in the fourth quarter of 2021, which included first 55 of net alternative and prepayment investment income above long term expectations.

Speaker 4: Second, 22 cents of COVID related impact.

Second 22 cents of Covid related impacts.

Third five sets of other notable items, primarily net performance fees below expectations.

Speaker 4: Third, five cents of other notable items, primarily net performance fees below expect.

Fourth quarter results contributed to a record 2021, adjusted operating earnings of $8 37 per share.

Speaker 4: Forth part of the results contributed to a record, 2021 adjusted operating earnings of $8.37 per share.

Speaker 4: On an ex-notables basis, we delivered adjusted operating earnings of $6.04.

On an ex notables basis, we delivered adjusted operating earnings of $6.04 per share broadly in line with our full year guidance given at Investor day.

Speaker 4: Broadly in line with our full-your-guidance given that

Speaker 4: Full-year results reflect strong alternative investment income performance and strong underlying core results.

Full year results reflect strong alternative investment income performance and strong underlying core results across all businesses.

Fourth quarter net income available to common shareholders of $403 million led to full year net income of $2 1 billion.

Speaker 4: Fourth quarter net income available to common shareholders of 403 million Let go full year net income of 2.1 billion

Speaker 4: With that, let's turn to our segment results, beginning on slide...

With that let's turn to our segment results beginning on slide eight.

Speaker 4: Both solutions deliver 241 million of adjusted operating earnings in the fourth quarter, contributing to record full year earnings of 1.1 billion.

Well solutions delivered $241 million of adjusted operating earnings in the fourth quarter contributing to record full year earnings of $1 1 billion.

Speaker 4: Fourth quarter adjusted operating earnings included alternative income that was 82 million above our long term expectation.

Fourth quarter adjusted operating earnings included alternative income that was $82 million above our long term expectations.

Full year adjusted operating earnings excluding notable items grew 22% year over year, driven by 13% net revenue growth and operating margins of 35, 5%.

Speaker 4: Full year adjusted operating earnings, excluding notable items, grew 22% year over year, driven by 13% net revenue growth and operating margins of 35.5%.

Full year net revenues reflect higher fee income from business growth favorable equity markets and net investment spread experience.

Speaker 4: Full-year net revenues reflect higher fee income from business growth, favorable equity markets, and net investment spread experience.

Full year administrative expenses were higher year over year in line with our expectations.

Speaker 4: While your administrative expenses were higher year over year in line with our expectations.

Speaker 4: Looking ahead, we expect first quarter administrative expenses to be consistent with fourth quarter levels, despite seasonality.

Looking ahead, we expect first quarter administrative expenses to be consistent with fourth quarter levels. Despite seasonality.

Turning to deposits and flows.

Speaker 4: 2021 full service recurring deposits showed continued strong false cumin, those who are within COVID-19 condemn their ever determining whether they ?

2021 full service recurring deposits showed continued strong momentum.

Speaker 4: feeding 12 billion in total, which is 9% growth year over year, and above are targeted six to 8%

<unk> $12 billion in total, which is 9% growth year over year and above our targeted 6% to 8% range.

The growth was driven by higher employer and employee contributions primarily in corporate markets.

Speaker 4: The growth was driven by higher employer and employee contributions primarily incorporated.

Speaker 4: For full year 2022, we expect a return to 10 to 12% growth in recurring deposits.

For full year 2022, we expect a return to 10% to 12% growth in recurring deposits.

For the full year, while solutions generated full service net inflows of $576 million, while record keeping and stable value saw net outflows of $6 7 billion and $2 1 billion respectively.

Speaker 4: For the full year, well-solution generated full service net inflows of 576...

Speaker 4: while record keeping and stable value saw net outflows of $6.7 billion and $2.1 billion respectively.

2021, net flows faced headwinds from higher dollar amounts of participants surrenders due to higher equity market levels.

Speaker 4: 2021 net flow space headwinds from higher dollar amount of participants renders due to higher

Also in the fourth quarter stable value sales slowed which mirrored industry outflows from capital preservation options.

Speaker 4: Also, in the fourth quarter, stable values failed slowed, which mirrored in the three outflows from capital preservation office.

Speaker 4: We are pleased with the volume of RFP activity in full service, record keeping and stable.

We are pleased with the volume of RFP activity and full service record keeping and stable value.

Speaker 4: Our pipeline of plans and implementation is leading to an expectation of 300 to 600 million of positive full-service net flows in the first quarter of 2022.

Our pipeline of plans and implementation is leading to an expectation of $300 million to $600 million of positive full service net flows in the first quarter of 2022.

Speaker 4: We are encouraged by the market interest in our integrated health and wealth benefit solutions designed to optimize financial outcomes for

We are encouraged by the market interest in our integrated health and wealth benefit solutions designed to optimize financial outcomes for our participants.

Speaker 4: Our new plan activity and our differentiated value property

Our new plant activity and our differentiated value proposition gives us confidence in our ability to grow revenues, while maintaining operating margins.

Speaker 4: give us confidence in our ability to grow revenues while maintaining operating marches.

On slide nine.

Speaker 4: Investment Management delivered 59 million of adjusted operating earnings in the fourth quarter of 2021.

<unk> management delivered $59 million of adjusted operating earnings in the fourth quarter of 2021.

Speaker 4: This contributed to a full-year adjusted operating earnings of 239

This contributed to full year adjusted operating earnings of $239 million exceeding our 2020 results of $197 million due to strong investment capital results.

Speaker 4: Seeding our 2020 results of 197 million due to strong investment capital.

Fourth quarter adjusted operating earnings included $12 million of investment capital returns above expectations.

Speaker 4: Fourth quarter adjusted operating earnings included 12 million of investment capital returns above expectations.

Speaker 4: A set by lower than expected performance fees on our mortgage-rooted strad.

Set by lower than expected performance fees on our mortgage derivative strategy.

Full year net revenues, excluding notables grew 11% year over year, primarily reflecting fees generated on higher retail AUM and strong fourth quarter fees generated from several private equity fund closings.

Speaker 4: Full year net revenues, excluding notables, grew 11% year over year. Primarily reflecting fees generated on higher retail AUM and strong fourth quarter fees generated from several private equity fund quotes.

These closings boosted the share of revenues from our privates, an alternative platform to roughly 50% in the quarter.

Speaker 4: Keith Hosing's boosted the share of revenues from our privates and alternative platform to roughly 50% in the quarter.

Higher 2021 administrative expenses year over year were mostly driven by higher variable compensation.

Speaker 4: Higher 2021 administrative expenses year over year were mostly driven by higher variable compensation.

Speaker 4: Our adjusted operating margin, excluding notables, was 25.7% for the year.

Our adjusted operating margin, excluding notables was 25, 7% for the year.

Speaker 4: As we shared in investor day, we expect to continue to grow our margin by 1% a year for the target of at least 27% by the end of 2022.

As we shared at Investor Day, we expect to continue to grow our margin by 1% a year with a target of at least 27% by the end of 2022.

Turning to flows we generated a record $9 billion of net inflows in the fourth quarter.

Speaker 4: Turning the flows, we generated a record $9 billion of net inflows in the port.

Speaker 4: This contributed to full year net flows of $7.8 billion, which represented 4.2% organic growth in the year and exceeded the high end of our 1 to 3% growth expectations.

This contributed to full year net flows of $7 8 billion.

Which represented four 2% organic growth in the year and exceeded the high end of our 1% to 3% growth expectation.

Speaker 4: We achieved strong net flows across our institutional US and insurance channels with continued demands for investment grade credit, private credit, and commercial mortgages. We also saw strong private equity closings and issued two additional C- and we also saw strong private equity closings and issued two additional C-

We achieved strong net flows across our institutional U S and insurance channels with continued demand for investment grade credit private credit and commercial mortgages.

We also saw strong private equity closings and issued two additional close in the fourth quarter.

We're seeing a strong start to 2022 supported by a robust unfunded pipeline that gives us confidence in our 2022 organic growth target of 2% to 4%.

Speaker 4: reported by a robust unfunded pipeline that gives us confidence in our 2022 organic growth target of 2 to 4%. Our longer term fixed is

Our longer term fixed income performance remains strong.

Speaker 4: 79% of our fixed income funds outperformed the benchmark on a three year basis 92% and 98% is so on a five and ten year

79% of our fixed income funds outperformed their benchmark on a three year basis, while 92% and 98% so on a five and 10 year basis.

Speaker 4: Looking ahead, we are excited by the continued strength across our diversified investment strategies and distribution channels, benefiting from excellent fixed income platform investment performance.

Looking ahead, we are excited by the continued strength across our diversified investment strategy and distribution channels benefiting from excellent fixed income platform investment performance.

We have a strong unfunded institutional pipeline to start 2022 with notable contributions from private and alternative strategies.

Speaker 4: We have a strong unfunded institutional pipeline to start 2022 with notable contributions from private and alternative strategies.

Turning to slide 10.

Solutions delivered $33 million of adjusted operating earnings in the fourth quarter full.

Speaker 4: Health Solutions delivers 33 million of adjusted operating earnings in the fourth-

Speaker 4: Well, you're adjusted operating earnings were 204 million in line with our 2020 results.

Full year adjusted operating earnings were $204 million in line with our 2020 result.

The fourth quarter earnings results included $9 million of alternative income above expectations and $34 million of Covid related impacts.

Speaker 4: The fourth quarter earnings results included 9 million of alternative income above expectations and 34 million of

Full year 2021, COVID-19 related impacts were $112 million.

Speaker 4: 12-year 2021 COVID-related impacts were 112 million, which drove total aggregate loss ratios toward the high end of our 70 to 73% target.

Which drove total aggregate loss ratios towards the high end of our 70% to 73% target range.

Speaker 4: H. Mix has driven a recent experience above the high end of our COVID sensitivity.

Age mix has driven our recent experience above the high end of our Covid sensitivity range such that we now expect a $2 million to $3 million impact per 10000 U S deaths.

Speaker 4: such that we now expect a two to three million dollar impact per 10,000 US.

Full year adjusted operating earnings excluding notable items grew 14% year over year, driven by 13% net revenue growth and stable operating margins.

Speaker 4: While you're adjusted operating earnings, excluding notable items grew 14% year over year. Driven by 13% net revenue growth and stable

Speaker 4: High-earned net revenue excluding notables, primarily reflects growth in stop loss and voluntary, as well as the contribution from our recent benefit strategies acquisition.

Higher full year net revenue, excluding notables primarily reflects growth in stop loss and voluntary as well as the contribution from our recent benefit strategies acquisition.

Full year annualized in force premiums grew 10% year over year at the high end of our target range.

Speaker 4: Well, your annualized enforced premiums you 10% year over year at the high end of our target.

As we maintain pricing discipline and protect margin in 2022, we expect the annualized in force premium growth towards the lower end of 7% to 10%.

Speaker 4: As we maintain pricing discipline and protect margin in 2022, we expect the annualized enforced premium growth toward the lower end of

Higher 2021 administrative expenses year over year were mostly driven by volume related costs timing and certain nonrecurring expenses.

Speaker 4: Higher 2021 administrative expenses year over year were mostly driven by volume related costs, timing and certain non-recurring expenses.

Speaker 4: Looking to first quarter, we expect expenses to be consistent with fourth quarter levels despite season-a.

Looking at the first quarter, we expect expenses to be consistent with fourth quarter levels. Despite seasonality.

While expenses were higher in 2021, our adjusted operating margin excluding notables remained stable at 33% on a trailing 12 months basis at the high end of our Investor day target of 27% to 33%.

Speaker 4: While expenses were higher in 2021 are adjusted operating margin, excluding notables remain stable at 33% on a trailing 12 month space.

Speaker 4: at the high end of our investor day target of 27 to 30.

Going forward, we expect to drive strong net revenue growth, while maintaining operating margins, our health and wealth strategy continues to resonate with the market and we remain confident in the strength of our distribution channels customer solutions and differentiated customer experience.

Speaker 4: Point forward. We expect to drive strong net revenue growth while maintaining operating.

Speaker 4: Our health and well strategy continues to resonate with the market, and we remain confident in the strength of our distribution channels, customer solutions, and differentiated customer experience.

Turning to slide 11, our strong.

Speaker 4: Strong capital generation help to support our record capital deployment in 2021 of 1.7 billion dollars.

Capital generation helped to support our record capital deployment in 2021 of $1 7 billion.

Speaker 4: This included 80 million of common stock dividends and 1.1 billion dollars of share repurchases in the year of which 310 million dollars was repurchased in the court.

This included $80 million of common stock dividends and $1 $1 billion of share repurchases in the year of which $310 million was repurchased in the quarter.

Speaker 4: We also extinguished approximately half a billion dollars of debt.

We also extinguished approximately half a billion dollars of debt in the year, helping to reduce our financial leverage ratio to below our 30% threshold.

Speaker 4: Helping to reduce our financial leverage ratio to below our 30% threshold.

Speaker 4: Our full year organic capital generation of approximately $1 billion demonstrates the high free cash flow generation of our-

Our full year organic capital generation of approximately $1 billion demonstrates the high free cash flow generation of our businesses.

Speaker 4: This capital generation contributed to our 1.5 billion of excess capital at year end 2021 despite

This capital generation contributed to our $1 5 billion of excess capital at year end 2021, despite record deployment.

Our 90% to 100% free cash flow conversion also leads to a high free cash flow yield, which currently stands at 13, 2% one of the highest in the industry.

Speaker 4: 90-100% pre-cashable conversion also leads to a high pre-cashable

Speaker 4: which currently stand at 13.2% one of the highest in the...

Going forward capital deployment will continue to be a strong contributor to our 12% to 17% annual EPS growth target as we shared at Investor day.

Speaker 4: Going forward, capital deployment will continue to be a strong contributor to our 12 to 17% annual EPS growth target as we share it and invest.

In summary, we are incredibly pleased with our year of record earnings strong performance from the underlying businesses and how the collection of our health wealth and investment management businesses continue to execute on our strategy.

Speaker 4: In summary, we are incredibly pleased with our year of record earnings, strong performance from the underlying businesses, and how the collection of our health, wealth, and investment management businesses continue to execute on our strategy.

We remain confident in the plan, we laid out at Investor Day last year, and we will continue to be balanced and disciplined as we look to deploy capital in the best interest of shareholders.

Speaker 4: We remain confident in the plan we laid out at investor day last year, and we will continue to be balanced and disciplined as we look to deploy capital and the best interests of share.

Speaker 4: With that, I will turn the call back to the operator so that we can take your quest.

With that I will turn the call back to the operator, so that we can take your questions.

Thank you.

Speaker 1: Thank you. We will now be conducting a question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the star.

We will now be conducting a question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the star keys.

To withdraw your question. Please press star two as a reminder, participants are limited to one question and one follow up again that is star one to register a question. Our first question is coming from Nigel Dally of Morgan Stanley . Please go ahead.

Speaker 1: To withdraw your question, please press star two. As a reminder, participants are limited to one question and one follow-up. Again, that is star one to register a question. Our first question is coming from Nigel Dolly of Morgan Stanley . Please go ahead.

Speaker 5: Great, thanks. So I wanted to start on capital number of questions. First, cashflow generation looked very robust this quarter, anything specific to this quarter behind that. Second, direct to capital level looks, continues to be very strong. What are your plans for putting those work as things like your capital management or recently has been funded through free cash flow, living that extra capital buffer unchanged? And then third, any thoughts on perhaps altering them because the capital management to imbibex and dividends? Thanks.

Great. Thanks, I wanted to start on capital a number of questions first cash flow generation looked very robust this quarter anything specific to this quarter behind that.

Second your excess capital level looks.

You should be very strong what are your plans for a pretty you guys work. It seems like your capital management were recently is being funded through free cash flow, leaving net excess capital buffer unchanged and then third any chosen perhaps old training them excess capital management to in buybacks and dividends.

Nigel good morning.

Thanks again.

Thanks, Nigel and good to talk to you. This morning and appreciate the question so.

Speaker 4: Thank you, Nigel. Good to talk to you this morning and appreciate the question. So first, in terms of cash flow generation in the quarter, I point to several things. Alternative performance was robust. I think that certainly contributed to the absolute level of cash flow generation. There were also...

First in terms of.

Cash flow generation in the quarter.

I point to several things alternative performance was robust and I think that certainly contributed to the absolute level of cash flow generation.

We're also.

Some additional kind of like trailing cash flow contributions from the two most recent transactions the sale of the financial planning channel, that's a terror as well as well.

Speaker 4: additional kind of like trailing cash flow contributions from the two most recent transactions the sale of the financial planning channel of Cetera as well as

Speaker 4: The life transaction was resolution, both of those contributed relatively small, but still on the scheme of things, meaningful contributions there. And there was a little bit of an effect of our reducing the RBC level from 400 to 375. That was a, while it was done to offset the impact of the new C1 factors.

The life transaction with resolution both of those contributed.

Relatively small, but still in the scheme of things meaningful.

Contributions there and.

And there was a little bit of an effect of reducing the RBC level from 400 to 375 that was a.

While it was done to offset the impact of the new <unk> factors.

Speaker 4: If it was going down in 25% increments, what does to have a small benefit there? So that all added up to a very robust generation of pre-catchable that completely offset the repurchases. Please with that and point to as well, just overall for the year. Well, any given quarter, it's gonna potentially fluctuate the year was...

It was.

The <unk> going down and 25% increments led us to have a small benefit there. So that all added up to a very robust generation of free cash flow that completely offset.

The repurchases pleased with that and point to as well just overall for the year, while any given quarter, it's going to potentially fluctuate. The year was it was pretty much right at.

Speaker 4: pretty much right at the high end of our range in terms of overall organic capital generation and cash flow conversion. So very, very pleased we're able to do that. In terms of plans in 2022, I think we laid it out at investor day that we expect.

But the high end of our range in terms of overall organic capital generation and cash flow conversion. So very very pleased we're able to do that.

In terms of plans in 'twenty.

2022.

We laid out at Investor day that we expect.

Speaker 4: You know, capital management to continue to be a very important part of our EPS growth.

Capital management to continue to be a very important part of our EPS growth. We shared that we thought the leg of the stool that leg of the stool I should say is was 7% to 9% of our growth with the balance coming from from revenue growth and margin expansion at four to six 1% to two respectively, adding up.

Speaker 4: that we thought, you know, the leg of the stool, that leg of the stool, I should say, was seven to nine percent.

Speaker 4: of our growth with the balance coming from revenue growth and margin expansion at the quarter-six and one to two respectively, adding up to the 12 to 17 percent EPS growth that we expected. So we'll be operating within that framework over the course of 2022. We'll continue to take the same basic philosophy of being measured approach, you know, consistent buyers looking to lean in where opportunities arise.

For the 12% to 17% EPS growth that we expected. So we will be operating within that framework over the course of 2022, we will continue to take the same so our basic philosophy of of being measured approach consistent buyers looking to lean in where where opportunities arise and.

Lean back and we think the stock is not where we were at where we have one of your purchasing and trading high so.

Speaker 4: lean bag, we think the stock is not where we're we're we're we're we're we're one of you purchasing and treating high. So and then you know just last that on a capital mix or capital deployment mix in the question of dividends.

And then just last on.

Capital mix or capital deployment mix and the question of dividends.

That's a question, we ask investors regularly and get them.

Speaker 4: investors regularly and get lots of feedback. You will continue to ask that question. I think the way we think of it is when you look at the cash flow yield on our stock, it's over 13% right now.

Lots of feedback and we'll continue to ask that question I think the way we think of it as when you look at the cash flow yield on our stock at over 13% right now.

Speaker 4: Well, I think we have a lot of confidence in our ability to generate ongoing cash and appreciate the point that increasing our dividend from where it is now, which is slightly over 1% yield, would be a great way to signal that. We look at that share price, and we just, it's hard to pass up the opportunity from a shareholder perspective.

Well I think we have a lot of confidence in our ability to generate ongoing cash and depreciate the the.

The point that.

Increasing our dividend from from where it is now which is slightly over 1% yield would be a great way to signal that we look at the share price and we just.

Hard to pass up the opportunity from a shareholder perspective.

Speaker 4: to deploy capital that way. So, but again, open and we're not opposed in any way to increasing the dividend philosophically. It's just a relative value question and we think share repurchases are pretty clearly a really good use of capital for us right now.

To deploy capital that way so.

Again open.

We're not opposed in any way to increasing the dividend philosophically. It's just you know a relative value question and we think share repurchases are.

Pretty clearly a really good use of capital for us right now.

That's great. Thanks, Mike.

Okay.

Thank you. Our next question is coming from Sydney come off of Jefferies. Please go ahead.

Speaker 1: Thank you. Our next question is coming from Sunni Kamas of Jeffries. Please go ahead.

Speaker 6: Thanks, good morning. I wanted to start on the financial leverage ratio. You guys include AOCI in your calculation and that...

Good morning.

I wanted to start on the financial leverage ratio.

You guys include a OCI in your calculation and Thats.

Speaker 6: I'm not sure that most other companies do that. And with LDTI coming, there's clearly a potential for AOCI to kind of swing around. So just wondering if that's a VoIA decision to include it or is that something that the rating agencies kind of have you looking at? Or is there any sort of potential change in the way you're calculating this based on some impacts from LDTI? Thanks. Thank you.

I'm not sure that most other companies do that and with L. DTI coming there's clearly a potential for a OCI to kind of swing around so just wondering if that's a voya decision to include it or is that something that the rating agencies.

Kind of have you looking at or is there any sort of potential change in the way you are calculating this.

Based on some impacts from El DTI. Thanks.

Thank you Sydney.

Yes, and at least on my end you broke up but I think I heard that I got the gist.

Speaker 4: And at least in my answer, you broke up, but I think I got the gist.

So let's start with just the leverage ratio and how we manage it we have a target of 30% we try to.

Speaker 4: So, let me start with just the leverage ratio and how we manage it. We have a target of 30%. We try to...

Speaker 4: Aim for something a little bit below that tool out for

Aim for something a little bit below that to allow for.

Speaker 4: some volatility in AOCI and that's part of the process that we go through.

Some volatility.

And Thats a part of the process that we go through.

So.

We chose this particular formulation because it's what one of the rating agencies focuses on.

Speaker 4: We chose this particular formulation because it's one of the rating agencies focuses on. Each agency has its own...

Each agency has its own.

Speaker 4: particular approach to leverage ratios. They also, they look at a lot of other things. I think the leverage ratio gets a lot of, you know, air time and a lot of attention, but I was looking at cash coverage, other forms of leverage and so on. So it's just a, it's a shorthand way for us to show where we are in terms of our debt equity structure. and similarly.

Particular approach to leverage ratios. They also they look at a lot of other things I think the leverage ratio gets a lot of.

Air time, and a lot of attention, but we're also looking at cash coverage other forms of leverage and so on so it's just a shorthand way for us to.

So where we are in terms of our debt equity structure.

LDC I, absolutely will have an impact here and so we're starting to think about what that might look like and where we make changes and we're going to have to take a lead to some extent from what from the agencies as well because I think it's important that we remain if not exactly identical at least in sync with how they're thinking about leverage.

Speaker 4: And so we're starting to think about what that might look like and will we make changes? I think we're going to have to take our lead to some extent from the agencies as well, because I think it's important that we remain if not exactly identical at least and think with how they're thinking about leverage. So a lot to come over the course.

A lot to come over the course of the next.

Speaker 4: the next several quarters. I don't think in the end though it's going to change the level of that that we carry. We may measure it differently and may have a different set of metrics around it, but I don't think we're going to have to do any dramatic capital action.

The next several quarters I don't think in the end, though it's going to change the level of debt that we carry.

We named measure it differently you may have a different set of metrics around it but I don't think were going to have to do any dramatic capital action.

Speaker 4: As I mentioned in a prior quarter, at this point we don't see LBTI having a apparently meaningful impact to our book of business, but it's still early days, we're still doing a lot of work and not in a position to share those numbers to them.

As I mentioned in a prior quarter at this point, we don't see <unk>, having up Tara.

Terribly meaningful impact to our book of business, but it's still early days, we're still doing a lot of work and not in a position to share that those numbers today.

Okay got it and then just switching gears to retirement can.

Speaker 6: Okay, got it. And then just switching gears to retirement, can you talk about any leverage to rising short-term rates? I seem to recall at some point in the past, when rates are rising, you had a floating rate portfolio that started to kick off some additional investment income, just wondering where we stand with that. And if you have any sensitivities that you could provide.

Can you talk about any leverage to rising short term rates I seem to recall at some point in the past when rates are rising you had a floating rate portfolio that started to kick off some additional investment income just wondering where we stand with that and if you have any sensitivities that you could provide.

Mike do you want to start perhaps said, yes, I'll go with that sure.

Speaker 4: Mike, you want to start? Perhaps I'll go with that. Sure. So, does any of your memories correct? There was a floating rate pool, but that was primarily part of the financial planning channel. So, most of that at least is that relates to wealth is gone. We do have some floating rate exposure. It's in the neighborhood of $2 billion in gross assets. So, there will be some benefit as rates, Uh,

So your memory is correct there was a floating rate pool, but that was primarily part of the financial planning channels. So most of that at least as it relates to wealth is gone.

We do have some floating rate exposure.

It's in the neighborhood of $2 billion in gross assets. So there will be some benefit.

As rates as it relates to short term rates go up.

Speaker 4: Go up. Broadly speaking, our interest rate guidance remains where we've been, which is a 100 basis point increase, you know, for a year would generate 20 to 30 million of

<unk> speaking our interest rate guidance remains where we've been which is a 100 basis point increase for a year would generate $20 million to $30 million of.

Speaker 4: of additional income and a decrease would be a 10 to 20 million drop, 100 basis point decrease would be a 10 to 20 million drop. As rates go up, you should think of that lower range, the decline range, that'll start to creep up and we'll update that as events unfold, but we're probably closer to the high end than the low end, given where rates have gone over the last month or two.

Additional income and a decrease would be a $10 million to $20 million drop 100 basis point decrease would be a $10 million to $20 million drop as rates go up.

You should think of that that lower range the decline range that'll that'll start to creep up.

We will update that as as events unfold, but we're probably closer to the high end and the low end given where rates have gone over the last two months.

Month or two.

Speaker 4: And that's for the whole business, but that's, but my mainly retirement, but that is for the all

And that's where the whole business.

Mainly retirement, but that.

That is for the olive oil.

Thank you. Our next question is coming from Mike Zaremski of Wolfe Research. Please go ahead.

Speaker 1: Thank you. Our next question is coming from Mike Zaremsky of Wolf Research. Please go ahead.

Hey, great good morning.

Speaker 2: Great morning. Let me follow up on a micrcomments on the uses of capital and the free cash flow yield you cited. You cited the 13%, which I thought was a trailing.

Follow up.

On a micro comments on the uses of capital and the free cash flow yield you cited.

You cited that the 13%, which I thought was a trailing.

Figure.

Speaker 6: When we looked at the DAC, in which was kind of propped up by better than expected, alternative for turns, but just kind of make sure, and I feel like it can send just on a forward basis, I think the expectation for things to normalize. So just curious, are you guys, if there's a read through saying you think on a forward basis, you're free catcher, you could remain around 13.

When we looked at the at the Tac and which was kind of propped up by better than expected alternative returns, but just trying to make sure.

And if I look at consensus on a forward basis, I think the expectation for things to normalize. So just curious are you guys. If there's a read through saying you think kind of forward basis, your free cash flow yield.

To remain around 13%.

Speaker 4: Look, I think our Mike, thanks for the question. So yeah, the 13 is a thank the trailing.

Look I think our yeah. So Mike thanks for the question.

So yes, the <unk> as it is I think the trailing.

Yes.

But going forward I still think we're very attractive looking on a free cash flow yield basis. So.

Speaker 4: But going forward, I still think we're very attractive looking on a free cash flow yield basis. So that'll continue to be our, one of the measures we look at as we're considering the relative mix of capital.

That will continue to be our one of the measures. We look at as we're considering the relative mix of capital use but as I said, that's something we're open to talking with investors about and gathering opinions in.

Speaker 4: But as I said, that's something we're open to talking with investors about and gathering opinions. And we could potentially adjust the court in the future. That's not a plan at this point, but we're open and nimble and willing to consider different approach.

We could potentially adjusted in the future that's not our plan at this point, but we will we're open and Ed and nimble and willing to consider different approaches.

Okay.

Speaker 2: And my follow-up would just be any update on the COSERGE in terms of timing.

And my follow up but just any update on.

The CEO search in terms of timing.

It's rod.

As we've communicated previously.

Speaker 3: As we communicated previously, my employment agreement is through the end of the year. That is when I do intend to retire.

Payment agreement is through the end of the year that is when I do intend to retire them.

Speaker 3: We are working through this in a very profitable and purposeful way.

We are working through this in a very.

Portfolio purposeful way.

And you know what.

Speaker 3: I've communicated previously that it is our intention to have no surprises for the investor community as we do this, but we've got lots of runway through the course of this year before that's announced. We will keep you all...

Communicated previously that is all.

Intension to have no surprises.

For for the Investor community as we do this but we.

We've got lots of runway through the course of this year before before Thats announced and we will keep you all posted.

Thank you. Our next question is coming from Tom Gallagher of Evercore. Please go ahead.

Speaker 1: Thank you. Our next question is coming from Tom Gallagher of Eiffrador. Please go ahead.

Yes.

Good morning.

Speaker 2: Good morning. I think in some of the past calls, you all have been talking more about M&A as a possibility, balancing that against buybacks as for use of capital.

I think in some of the past calls you all it's been talking more about M&A as a possibility balance.

Balancing that against buybacks.

For use of capital.

Speaker 2: Just given where you're stocks trading, other opportunities that might be in the market, can you talk about your updated thoughts on M&A and whether or not that can include some of larger size deals, because I think the deals you've announced so far have been pretty small.

Just given where your stock's trading other.

Other opportunities that might be in the market can you talk about your updated thoughts on M&A and whether whether or not that could include.

Somewhat larger size deals because I think the deals you've announced so far have been have been pretty small.

Mike would you like to begin I'll follow.

Sure.

Speaker 4: Thank you Tom for the question. So in short, I'd say nothing is really changed in our, from what we said, did back in November in terms of our view on M&A. So we think there are potential opportunities that would enable us to accelerate growth, you know, particularly in the benefits space as well as

Thank you Tom for the question.

So in short I'd say nothing has really changed in our from what we said back in November in terms of our view on M&A. So.

We think there are potential opportunities that would enable us to accelerate growth.

Particularly in the benefits space as well as we talked about privates and potentially alternatives in the investment management space, you know things that would enable us to be closer to customers have better data capabilities.

Speaker 4: We talked about private and potentially alternatives and invest in management space, things that would enable us to be closer to customers, have better data capability.

Speaker 4: We're also, I think, open to scale opportunities where those might make sense. So what we did say too was that, you know, for smaller deals, you know, the time frame for accretion might be stretched out a bit from our 24 month window and that's a creative relative to share buyback.

We're also I think open to scale opportunities, where those might makes sense. So what we did say too was that for smaller deals.

The timeframe for accretion might be stretched out a bit from our 24 month window and thats accretive relative to share buyback.

Speaker 4: So, you know, at larger deals, we've not, we've not nor will we set a limit in terms of what we're thinking other than, you know, kind of the practical limits that you hope can imagine, but we're open to whatever would make the most sense for shareholders, you know, that the opportunities that set fits in front of us. So I think the, the, the, the, the, the, the, the stance here is, is one of, how can we continue to drive revenue growth while preserving or increasing margin? And those are the kind of deals that we've,

So larger deals.

We've not we've not nor will we set a limit in terms of what we're thinking other than kind of the the practical limits that you all can imagine, but we're open to whatever would make the most sense for shareholders.

The opportunity set that's in front of us So I think the.

The stance here is one of how can we continue to drive revenue growth, while preserving or increasing margin.

And those are the kinds of deals that we're going to be looking for.

Speaker 3: The only piece I'd add to what Mike said is we're laser focused on the 12 to 17% EPS growth.

The only piece I'd add to what Mike said is we're laser focused on the 12% to 17% EPS growth and all of that that we presented at Investor day.

He is organic.

And in those levers that Mike talked about earlier on.

Speaker 3: And those levers that Mike talked about earlier on the 4 to 6.

The four to six.

Percent contribution from.

From revenue or the 1% to two for margin expansion or the seven to nine from capital management.

Speaker 3: from revenue or the one to two from margin expansion or the seven to nine from capital management. Those are levers that have all.

Those are levers that have always been it or you don't.

At our disposal will continue to be and we're going to continue to be absolutely focused on.

Speaker 3: that our disposal will continue to be and we are going to continue to be absolutely focused on enabling that.

Net outcome.

Gotcha.

Speaker 2: got you, thanks for that guys and then just my follow up.

Thanks for that guys and then just my follow up.

Speaker 2: is the just question on the elevated pension expense uh... what uh... they think there was some de-resking that that caused that any any uh... actual pension contributions that we should be thinking about or no or no uh... funding actually for this because i believe it was mentioned it was non-cash

Is the just a question on the elevated pension expense.

What.

I think there was some de risking that that caused that any any actual pension contributions that we should be thinking about or now or is there no.

Funding actually for this because I believe it was mentioned it was noncash.

Speaker 2: And if it is non-cash and we're going to have higher pension expenses, should we assume your...

And if it is noncash and we're going to have higher.

Pension expenses should we assume your free cash flow conversion ratio actually gets a little better.

Speaker 2: free cash flow conversion ratio actually gets a little better considering that that's going to hit gap earnings but not cash flow.

<unk> that that's going to hit cap earnings, but not cash flow.

Uh huh.

Speaker 4: Tom, thank you. So first correct that it will not hit Casual. And so all LT equal at the margin.

Tom Thank you.

So first correct that it will not hit cash flow.

And so all else equal at the margins.

The GAAP earnings will be a little bit lower than they might have been in cash flow is unaffected. So so yeah. The math would push you up a bit I don't know that thats going to be all that discernible.

Speaker 4: The gap earnings will be a little bit lower than they might have been and cash flow is unaffected. So yeah, the math would push you up a bit. I don't know that that's gonna be all that discernible given the magnitude of the numbers, but what's happening more broadly?

Given given the magnitude of the numbers, but what's happening more broadly here.

Is every year, we read we read Marc if you will the pension plan. That's just an accounting process that we go through where we evaluate the you know the.

Speaker 4: is every year we re-mark, if you will, the pension plan. That's just an accounting process that we go through where we evaluate the liability. We apply a current rate to it, so that's something every company does. And then you make you adjust the, in one time, or adjustment of the liability to reflect current conditions.

The liability we apply our current rate to it because its something every company does and then you make you adjust and one timer.

Adjustments of the liability to reflect current conditions.

And then those affect your estimates of pension income, which is the on a GAAP basis. The earnings you get from the funds underlying underlying the pension plan and the expense and so what has happened over the last few months as our pension committee, which is independent of management by the way.

Speaker 4: And then those effects, year estimates of pension income, which is the on a gap basis, the earnings you get from the funds underlying the pension plan and the expense. And so what has happened over the last few months is our pension committee, which is independent of management, by the way.

Speaker 4: made the decision to shift more of our assets into fixed income and recognition of the fact that we're in a very favorable funding spot. So we're more fully immunized.

<unk> made the decision to.

Shift more of our assets into fixed income and recognition of the fact that we're in a very favorable funding spot. So we're more fully immunize there'll be less volatility in the underlying pension assets.

Speaker 4: There'll be less volatility in the underlined pension asset.

Speaker 4: which is great given that we're very well funded now. And so don't expect to see the kind of volatility that we might have seen in the past.

Which is which is great given that we're very well funded now.

And so don't expect to see the kind of volatility that we might have seen in the past.

Speaker 4: But that also comes at the cost of having lower return expectations. And so that's the pension income will be lower this year. The pension expense is basically unchanged. It hasn't changed very much. I think it's a tiny increase. And so the net of those is that it's a smaller benefit because the income is actually on a gap based on exceeding the expense. And relate to contributions.

But that also comes at the cost of having lower return expectations.

So that's the pension income will be lower this year. The pension expense is basically unchanged it hasn't changed very much.

A tiny increase.

And so the net of those is that it.

As you know, it's a smaller benefit to the income they actually on a GAAP basis exceeds the expense as it relates to contributions.

Yeah.

I don't think we've got the numbers that we'd be in a position to share, but any any contribution this year I would expect to be relatively small and not going to have any meaningful impact.

Speaker 4: I think we've got the numbers that we'd be in a position this year, but any contributions this year, I would expect to be relatively small and not going to have any meaningful impact to our ability to, to, you know, to repurchase his pay dividends or other.

Two our ability to.

Repurchases pay dividends or otherwise.

<unk>.

Speaker 1: Thank you. Our next question is coming from Eric Bass of Autonomous Research. Please go ahead.

Thank you. Our next question is coming from Erik bass of Autonomous Research. Please go ahead.

Speaker 2: Hi, thank you. Can you provide some more color on the expenses in 4Q, which I believe included some accelerated investments, and then given the upward pressure that we're seeing on wages, how are you thinking about the GNA expense outlook across your businesses in 2022?

Hi, Thank you can you provide some more color on the expenses in <unk> and <unk>, which I believe included some accelerated investments and then given the upward pressure that we're seeing on wages. How are you thinking about the G&A expense outlook across your businesses in 2022.

Like would you like to begin.

Sure I'll take a start and then others can.

Speaker 4: Sure, I'll take a start and then the others can join in. So, you know, fourth quarter was a couple of things. There was timing that we had signaled on, it's spend like advertising some IT spend around, you know, adding some capabilities just happened to be a little bit higher in the fourth quarter. Also, a couple of other...

I'm joined in so.

Fourth quarter was a couple of couple of things there was timing that we had signaled on spend like advertising.

Some it spend around adding some capabilities just happened to be a little bit higher in the fourth quarter were also a couple of other.

Not like not expected to recur accounting adjustments that were relatively small, but they ended up as well. So so overall that drove us to the level of expenses, where we're able to say that you know the first quarter, which is normally a seasonally higher quarter. This year will.

Speaker 4: Not expected to recur accounting adjustments that were relatively small, but ended up as well. So overall, that drove us to the level of expenses where we're able to say that, you know, first quarter, which is normally a seasonally higher quarter next year, will be about the famous fourth quarter. Wait a minute. What's the final route? So the Sex

We will be about the same as fourth quarter. So.

But the investments are or I think.

Speaker 4: I work where we're pleased to have had the chance to accelerate some of those capabilities and we'll go forward to there. It'll help with the revenue.

We're pleased to have had the chance to accelerate some of those capabilities and.

And we'll go we'll go forward from there it'll help with the revenue growth.

Speaker 4: Overall, the wage conditions, we've made our best.

Overall, the wage conditions, we've we've made our best.

Speaker 4: estimate, you know, that in terms of what we think that's going to have in 22, that was baked into our targets that we shared at November . I don't think our view has changed.

Estimate.

In terms of what we think that's going to affect that is going to have in 'twenty two.

That was baked into our targets that we shared at November I don't think our view has changed.

Speaker 4: meaningfully since then, but you know, it's obviously a pretty rapidly evolving situation. So we want to be, we'll be very mindful of where we are relative to competitors for our most important asset, which is our talent. We're very focused on that. We have regular conversations about it at the most senior level. So very focused on that. But think it's within our footprint, at least our ability to man.

Meaningfully since then but it's obviously a pretty rapidly evolving situation and so so we want to be we'll be very mindful of where we are relative to competitors for our most important asset which is our talent we're.

We're very focused on that we have regular conversations about it about senior level. So so very focused on that but I think it's within our footprint at least for our ability to manage.

Speaker 4: Going forward I'd also point out and I think others other calls other teeth other companies have planted it out too

Going forward I'd also point out and I think others. Other calls of other companies have pointed this out too.

Wage increases are.

Speaker 4: Wage increases are, you know, broadly speaking, a good thing for the businesses that we're in, particularly in the wealth business.

Broadly speaking a good thing for the businesses that we're in particularly in the wealth business in.

Speaker 4: in terms of contributions as well as in the group life business particularly in terms of benefit amounts and premiums you get paid. So those things will be generally favorable for us. So the balance of interest I think is that

In terms of contributions.

As well as in.

The group life business, particularly in terms of benefit amounts in premiums that get paid so.

Those things will be generally favorable for us so the balance of interests I think is that.

Speaker 4: You know, some degree of wage inflation is probably a good thing for us, but throughout we'll be focused on managing and delivering the margins that we've talked about and continuing to grow revenue. And those I think are going to be our primary guideposts as we go.

Some degree of wage inflation is probably a good thing for us but throughout will be focused on.

Managing and delivering the margins that we've talked about.

And continuing to grow revenue and those I think are going to be our primary guideposts as we go forward.

Thank you and then in the health business. It looks like the voluntary loss ratio was a bit higher this quarter than where it's been running can you just talk about what youre seeing in terms of claims experience and if this is starting to normalize.

Speaker 2: Thank you. And then in the health business, it looks like the voluntary loss ratio is a bit higher this quarter than where it's been running. If you just talk about what you're seeing in terms of claims experience and if this is starting to normalize.

Rob.

Speaker 7: Yeah, thank you. Appreciate that, Eric. So I think look the step back on, you know, quarter to quarter, there's always a bit of noise depending on the products, you know, it ebbs and flows a little bit with seasonality, voluntary, you get a little bit of that in fourth quarter with just enrollment activity and sort of reminder of, oh, I've got these benefits. And so you see a little bit of that noise, but I would say that was pretty modest. And really as you do the step back for the year,

Yes. Thank you I appreciate that Eric So I think look the step back on.

Quarter to quarter, there is always a bit of noise, depending on the products. It ebbs and flows a little bit with seasonality voluntary you'd get a little bit of that in the fourth quarter with just enrollment activity and sort of reminder, although I've got these benefits.

So youll see a little bit of that noise, but I wouldn't say that was pretty modest and really as you do the step back for the year.

Speaker 7: You know, we've obviously had really strong growth in the supplemental health voluntary product line, you know, 22% growth year over year.

We've obviously had really strong growth in the supplemental health voluntary product line, 22% growth year over year.

Speaker 7: And then, you know, in line with that, if you look at, you know, the underwriting margin for the year, it's growing at 23%. So I think we're really in line and feeling good about, you know, what we're seeing there, the underlying dynamics. There's no, you know, sort of issue that we're concerned about as we move forward that business has been running well for us.

And then in line with that if you look at the underwriting margin for the year growing at 23%. So I think we're really in line and feeling good about what we're seeing there the underlying dynamics there is no.

The issue that we're concerned about as we move forward that business has been running well for us.

Speaker 7: You know, time will tell obviously COVID and the dynamics that you're alluding to of this, you know, are things gonna change, behavior gonna change, you know, we'll see those things and we'll react to those things. But as we look at the overall health of the business, I'd say, we're doing exceedingly well.

Time will tell obviously COVID-19 in and the dynamics that youre alluding to of this.

Things are going to change behavior going to change.

We'll see those things and we'll react to those things, but as we look at the overall health of the business I would say.

We're doing exceedingly well.

Yeah.

Thank you. Our next question is coming from Ryan Krueger of K P. W. Please go ahead.

Speaker 1: Thank you. Our next question is coming from Ryan Krueger of KPW. Please go ahead.

Hi, good morning.

Speaker 8: Hi, good morning. First question is just, can you just remind us what your current expectation is for first quarter expense, P-diamality?

First question was just can you just remind us what your current expectation is for first quarter expense seasonality.

Speaker 4: Brian , the place to lay that would be somewhere around 25 to 30 million, just like it was last year. I think it's a good place to start.

Mike.

Brian .

The place to lay that would be somewhere around 25% to $30 million just like it was last year I think it was.

It's a good place to start.

Thanks, and then now that the the mandates have funded and can you give an updated view of the investment management pipeline.

Speaker 8: Thanks. And then now that the mandates have funded, can you give an updated view of the Invest Management pipeline headed into 2022?

Headed into 2022.

Happily Christie.

Speaker 9: Yeah, sure thing Ryan. So yes, we had a very successful quarter as you saw, our largest net inflows that we've had. And just thinking about the quarter in particular, what we think of as larger mandates called that north of the billion, we had more than one fund, so that certainly contributed. But underneath, a lot of diversity. So our private markets continue to advance, client to man remain strong. So when you look out,

Yes sure thing Ryan.

So yes, we had a very successful quarter is as you saw our largest net inflows.

We've had and just thinking about the quarter in particular, you know what we think of this larger mandates called out North of 1 billion, we had more than one fun, so that certainly contributed but underneath.

Diversity cell or private markets continue to advance client demand remains strong so when you look out.

Speaker 9: And we're looking at the pipeline, an unfunded winds into 22. We see a lot of diversity there, a lot of strengths, and we're confident we're gonna get into our two to four percent organic growth range, our target that we put forward on investor days. So really excited about it. Again, we've got...

And we're looking at the pipeline you know an unfunded wins into 'twenty two we see a lot of diversity. There are a lot of strength and we're confident we're going to get into our 2% to 4% organic growth range or target that we put forward on investor day. So.

Really excited about it again, you know we've got great products the demand for differentiated asset classes, that's leveraging our strong fixed income investment performance continues so again.

Speaker 9: great products, the demand for differentiated asset classes, plus leveraging are strong, fixed income investment performance continues. So again, that feeling good about the year.

Feeling good about the year.

Great. Thank you.

Speaker 1: Thank you. Our next question is coming from Alex Scott of GoldenSax. Please go ahead.

Thank you. Our next question is coming from Alex Scott of Goldman Sachs. Please go ahead.

Hi, first question I had was on health solutions.

Speaker 10: Hi, first question I had was on health solutions. You guys give a lot of guidance there. So we have a good amount to work off of, but I just wanted to see if you could comment on the stop loss business and just, how do you view your competitive positioning there? That's sort of a business that goes through cycles and it was just wondering how you view that market and sort of price adequacy and so forth, moving into 2022.

You guys gave a lot of guidance there.

So we have a good amount to work off of it but I just wanted to see if you could comment on the stop loss business and just how you view your competitive positioning there that's sort of a business that goes through cycles and I was just wondering how you view that market in <unk>.

Price adequacy, and so forth moving into 2022.

Rob.

Speaker 7: Yeah, great. Thanks Alex. So stop lots as you alluded to. You know, it goes through cycles.

Yeah, great. Thanks, Alex So stop losses, you alluded to.

It goes through cycles.

Speaker 7: As you do the look back for what we've experienced when our book over the last couple of years, and I would say we were doing very well in this version of the cycle with loss ratios that the lower end of our guide around that 77 to 80%. We're in the 77% neighborhood, and so that's been great. And it took a lot of work to get there a couple years prior. We were working hard to improve underwriting margin in that business, I think.

As Youll do the look back for what we've experienced within our book over the last couple of years.

I would say we were doing very well and this is this version of the cycle with loss ratios at the lower end of our guide around that 77% to 80% were in the 77% neighborhood and so that's been great.

It took a lot of work to get there a couple years. Prior we were working hard to improve underwriting margin in that business I think as you've seen us operate over the last couple of years last few years, it's been about striking that right balance of growth and disciplined underwriting.

Speaker 7: As you've seen us operate over the last couple years, last few years, it's been about striking that right balance of growth and discipline underwriting. I think that is the story that will continue as we move forward. It's a business where, you know, if you lose the handle on underwriting margin, you know, you obviously can't grow fast enough to recover from that impact that it has on your book of business.

I think that is the story that well will continue as we move forward, it's a business, where if you lose the handle on underwriting margin.

You, obviously can't grow fast enough to recover from that impact that it has on your book of business and so we'll do what we continue to do is focus on the right balance there as Mike alluded to.

Speaker 7: And so we'll do what we continue to do is focus on the right balance. There is Michael alluded to in our growth guidance to 7 to 10% range. We're expecting to be at the lower end of that. A piece of that will be what we experience in the renewal and new business cycle for 1-1.

Our growth guidance of 7% to 10% range. We are expect them to be at the lower end of that a piece of that will be what we experienced in the renewal and new business cycle for one one.

Speaker 7: So on the new business side of things, we came in about where we expected, if not right on top of it. Renewal season was a little bit more challenging, but again, as I alluded to, our book of business has been running very well. So we have plenty of competition on trying to repain good running cases, but importantly, no one went not to chase the market and that's just gonna happen. That's the oven flow of that business.

So on the new business side of things, we we came in about where we expected if not right on top of it renewal season was a little bit more challenging, but again as I alluded to our book of business has been running very well.

So we have plenty of competition on trying to retain good running cases, but importantly, no.

One win.

Not to chase the market and that's just going to happen, that's the ebb and flow of that business and so we will be in a position to talk a lot more about what we saw what we experience once we talk about <unk>.

Speaker 7: And so we'll be in a position to talk a lot more about what we saw, what we experienced once we talk about 1Q. But at this point, you know, we're going to strike the balances as I alluded to on that we've done over the last few years.

But at this point, we're going to strike the balance as I alluded to and that we've done over the last few years.

Yeah.

Got it that was helpful. And then my follow up question is just on old DTI I know, you're not ready to give.

Speaker 10: That was helpful. And then my follow up question is just on LBTI. I know you're not ready to give impacts and disabilities and so forth, but I was wondering if maybe you could just...

Impacts sensitivities and so forth, but I was wondering if maybe you could just note how much of the existing reserve balance is transitioning to this new accounting so sort of how much of your existing reserves or <unk> 60 today that we should think about potentially having an impact here.

Speaker 10: Note how much of the existing reserve balance is transitioning to this new accounting. So how much of your existing reserves are fast 60 today that we should think about, you know, potentially having.

<unk>.

Speaker 4: Alex, I don't know the number off the top of my head, but that's something we could maybe be prepared for in first quarter. As we get a look, it's a good question. I think just to the point I made earlier though, it's going to be relatively small, but it's not zero. There is some legacy.

Alex I don't know the number off the top of my head, but that's something we could maybe be prepared for in first quarter as we get along.

It's a good question I think just to the point I made earlier, though.

Let me relatively small, but it's not zero I mean, there is some legacy.

Speaker 4: There are some legacy contracts all around that are here, but it's not going to be a meaningful amount for us in my view. But we'll come back down that as we give a little more color in the coming quarter.

There are some legacy contracts still around that are here.

But it's.

It's not going to be a meaningful amount for us in my view, but well we'll come back to you on that as we give a little more color.

Quarters.

Thank you. Our next question is coming from Andrew <unk> of Credit Suisse. Please go ahead.

Speaker 1: Thank you. Our next question is coming from Andrew Kligerman of Credit Suisse. Please go ahead.

Hey, good morning.

Speaker 11: Staying on the health solutions area again, I'm talking around the group life and disability and the ability to get rate and perhaps how much influence that might have on the seven to 10% growth that you're looking at.

Staying on the <unk>.

Health solutions area again.

Flex around the group life, and disability and the ability to get rate and perhaps how much influence that might have on the.

7% to 10% growth that youre looking at.

Rob.

Speaker 7: Yeah, sure. Thanks, Andrew. It's interesting, you know, you tend to think about life and disability as this, you know, old, stodgy part of the market. And you kind of got to do it. I say just a couple of things and I'll get to your question.

Yeah sure. Thanks, Andrew.

It's interesting.

You tend to think about life and disability is this.

<unk> part of the market.

And you kind of got to do it.

Say, just a couple of things and I'll get to your question.

Speaker 7: You know, the ability to deliver an integrated experience, the impact especially post-COVID and during COVID here as we sit.

The ability to deliver an integrated experience the impact, especially post COVID-19 and during Covid here as we said.

Speaker 7: of leave management and the dynamics around the complexity of that element of a life disability package and what that means to decision making.

Leave management and the dynamics around the complexity of that element of our life disability package and what that means to decision making.

Speaker 7: and just overall satisfaction with an employer and their provider of coverage.

And.

Just overall satisfaction with an employer and their provider of coverage.

Speaker 7: So I would say, you know, there's always been, you know, you know, just spin-ging this around rate in that market. And what are you going to be willing to pay?

I would say there's always been.

No.

Just stinginess around rate in that market and what are you going to be willing to pay but I would say the decision making criteria has gotten a bit different how that plays out as we think about COVID-19 mortality and the impact on pressure that can have on pricing.

Speaker 7: But I would say the decision-making criteria has gotten a bit different. How that plays out is we think about COVID mortality and the impact and pressure that can have on pricing. How the market's gonna calibrate to that, I think is a story to be written. Obviously there's an impact as the underwriters are looking at and making decisions about what they think, go forward experiences and our business just as a reminder.

The market is going to calibrate to that.

As the story to be written.

Obviously, there is an impact as the underwriters are looking at and making decisions about what they think go forward experience is in our business just as a reminder.

Speaker 7: most of the stuff that we do is going to be experienced rated for the most part. And so we're going to see what's going on and make assessments and make good decisions as we move forward. And you know, we'll see what the market will bear. What I would just say is that element of leave management and how that comes together is an incredibly important part of the decision making that I think only got heightened of

Of the stuff that we do is going to be experienced rated to the for the most part and so we're going to see what's going on and make assessments and make good decisions as we move forward and we'll see what the market will bear what I would just say is that element of leave management and how that comes together is an incredibly important part of the decision making.

Only gotten heightened of late and then what we started to see more that we've talked a little bit about investor day is just what's coming to market is not just life and disability.

Speaker 7: And then what we started to see more that we talked a little bit about in Bessaribay is just

A lot of times and over 30% of the time closer to 40%, we're seeing business come to market now Thats also got supplemental health as part of the conversation on the shopping that they're doing and so I think the price element starts too.

Speaker 7: We're seeing business come to market now that's also got supplemental health as part of the conversation and the shopping that they're doing.

Speaker 7: And so I think the price element starts to maybe get diluted a little bit. And hopefully that means there's upward movement as we talked about. Might just set a second ago.

Maybe get diluted a little bit and hopefully that means there is upward movement as we talked about Mike just said a second ago wage inflation wage growth. Those are the things that also helped the business overall, so it's a little bit more complicated than it used to be but let me just sort of take a pause there and see if you want me to go deeper.

Speaker 7: You know, wage inflation, wage growth, those are things that also help the business overall. So it's a little bit more complicated than it used to be, but let me just sort of take a pause there and see if you want me to go deeper.

Yeah.

Speaker 11: I think you said the book is yet to be written, but is there any movement at all on price?

Yeah, I think you said the book is yet to be written but is there any movement at all on price.

Well again, I think it's hard to say at this point in time and part of why I say that is like look we're getting in the national account season, as we speak have we've seen meaningful change in price I would say the answer to that is no.

Speaker 7: Well, again, I think it's hard to say at this point in time and part of why I say that is like look we're getting into national account season as we speak.

Speaker 7: have we seen meaningful change in price? I would say the answer to that is no, but it's something that obviously we continue to assess and see where the market settles in. And then you throw in the factor as I was alluding to at the end there. I think there's other bigger elements that are gonna drive decision making, which in theory will allow for some price drift.

But it's something that obviously, we continue to SaaS and see where the market settles in and then you throw in the factor as I was alluding to at the end there.

There is other bigger elements that are going to drive decision, making which in theory will allow for some price drift up but again I don't want to declare it just yet I think there is a lot more complications around those decisions and they are used to be.

Speaker 7: But again, I don't want to declare it just yet. I think there's a lot more complications around those decisions than there used to be.

Well that was helpful. And then my second question would be for Mike Smith around.

Speaker 11: Well, that was helpful. And then my second question would be for Mike Smith around the earlier comment about capital.

The earlier comment about capital and and I'm, just kind of thinking to myself about share repurchases and Mike you talked about.

Speaker 11: And I'm just kind of thinking to myself about shared purchases and Mike, you talked about capital return to shareholders being seven to nine percent of the 12 to 17%. The other backdrop I'm thinking about is organic generation of...

Capital return to shareholders being 7% to 9% of the 12% to 17%.

The other backdrop I'm thinking about as organic generation of.

Speaker 11: Close to a billion again this year, excess capital of 1.5.

Close to $1 billion again, this year excess capital of one five so I'm looking at $2 5 billion of potential re deployable capital last year, you bought back over 1 billion of stock.

Speaker 11: So I'm looking at 2.5 billion of potential redeployable capital. Last year you bought back over a billion of stock. That would create probably more than 10% EPS upside as I eyeballed the number. So the question.

That would create.

More than probably more than 10% each.

Subside as I eyeball the number so the question is.

Speaker 11: Would you be willing to go for a year of over a billion in buybacks or maybe well over a billion in read purchases if there's that opportunity to lean in?

Would you be willing to go for a year of over $1 billion in buybacks or maybe well over a $1 billion and repurchases.

If there is that opportunity to lean in.

Andrew Thanks for the question.

Speaker 4: I think part of the reason that we're not giving specific humor at this point is because we have, I think, an enormous amount of flexibility.

I think part of the reason that we're not.

Not giving specific numbers at this point is because we have I think an enormous amount of flexibility.

Speaker 4: And so I think we're open to whatever opportunities present themselves that make the most fence for shareholders at the time we're given them. So I'm not going to maybe comment specifically on any given number other than that's going to be our focus, it has been our focus and we'll continue to be our focus. Shareholder value.

And so I think we're open to whatever opportunities present themselves that make the most sense for shareholders at the time, we give them so.

I'm not going to.

Maybe comment specifically on any given number other than that is going to be our focus has been our focus.

And we will continue to be our focus.

Shareholder value.

And Andrew just to just to.

Well honestly reinforced that.

Speaker 3: Certainly in a best or day and on this call we can...

Certainly at Investor day, and on this call.

We continue to.

<unk>.

Barry.

Speaker 3: Clearly to the 12 to 17% EPS growth rate. And as you well point out,

Clearly to the 12% to 17% EPS growth rate and as you well pointed out.

Speaker 3: That is a, you know, that is a lever that we can use that we have used and we will continue to be very open to using prospectively. So...

That is that is a lever that we can use that we have used and we will continue to be very open to using prospectively. So.

I think as you think about Voya.

After we completed the de risking far simpler company.

Speaker 3: After we completed the de-risking, a far simpler company, a very attractive EPS growth rate.

Attractive EPS growth rate.

Speaker 3: we will continue to lever and exercise those tools following to...

We will continue to lever and exercise those tools are fully too.

For shareholder outcomes.

Speaker 1: Thank you. Ladies and gentlemen, in the interest of time we are asking the remaining analysts to please limit themselves to one question.

Thank you, ladies and gentlemen in the interest of time, we are asking the remaining analysts to please limit themselves to one question our.

Speaker 1: Our next question is coming from John Barnagy, a Piper Sandler. Please go ahead.

Our next question is coming from John Carnegie of Piper Sandler. Please go ahead.

Thank you very much my question the Investor Day slides you talked about.

Speaker 7: Thank you very much. My question, the investor day slides you talk about.

Speaker 4: private and alternatives, three to four percent versus organic from other markets. So you're clearly expecting more growth out of private and alternatives. Now you're breaking out disclosure around that around all of the private and fixed incomes. So thank you. You currently sit at 30%.

Privates and alternatives, 3% to 4% versus organic from other market. So you are clearly expecting more growth out of private as an alternatives now you're breaking out disclosure around that around often private fixed income. So thank you.

Currently sit at 30%.

Speaker 4: Where do you aspirationally assume the growth for that 2024 target of 5% percent per year? Thank you.

Where do you aspiration, we assume it grows to it so that 2024 target of 5% to 7% per year. Thank you.

Christy.

Okay.

Speaker 9: Well, you know, John , how how we think about it is certainly, you know, we have forecast based on

Well you know.

How do we think about it. It's certainly you know we have forecast based on it is driving significant growth within investment management. You know we do have targets nor are we specifically, saying that we're gonna be X percent of the U N at a certain point in time no.

Speaker 9: It is driving significant growth within investment management. We do have targets. Are we specifically saying we're going to be X percent of AUM at a certain point in the high-know? And so how we think about it though, and what we see is it is a higher margin product. As you said, it's about a third of our assets to do.

So how do we think about it though and what we see is you know it is higher margin products. As you said, it's about a third of our assets today.

Speaker 9: you know, we had a strong quarter in private, you know, in 4Q. So again, you know, it's going to contribute to our margin expansion. And one of the things that I just love about F.

You know we had a strong quarter in private you know in for Q2.

So again you know.

It's going to it's going to contribute to our margin expansion and one of the things that I just love about asset management here employee that's sort of our Untold story is we just have such a good diverse.

Speaker 9: Meant here. voy sort of our untold story as we suggest, such a good diverse.

Speaker 9: product line, whether it's private asset class.

Product line, whether it's private asset classes that you see as well as the public asset classes. So we're focused on also we're focused on investing strategically in our private capabilities with fund launches that we have in the pipeline already this year such as the commercial real estate impact fun, So think of the beauty of <unk>.

Speaker 9: as well as public asset classes. So we're focused on alpha. We're focused on investing strategically in our private capabilities with fund launches that we have in the pipeline already this year, such as a commercial real estate impact fund. So think of the beauty of green or ESG coming to private markets with that. bye.

Green or ESG coming to private markets with that.

Speaker 9: So again, we're investing in it. It's growing, but we have a broad look of business and so we're really focused on delivering alpha for clients.

So again, we're investing in it it's growing but we have a broad book of business and so we're really focused on delivering alpha for clients because they have complex needs that they are facing every day in this world in which they live as long, it's really focusing on driving our operating margin expansion.

Speaker 9: I could say have complex needs that they're facing every day in this world in which we live, as well as really focusing on driving, you know, our operating margin expansion. And so again, when you see that, it's gonna be based on fundamental growth, client demand, as we go on our journey to continue to deliver for shareholders as well.

So again when you see that it's going to be based on fundamental growth client demand as we go on our journey to continue to deliver for shareholders as well.

Speaker 1: Thank you. Our next question is coming from Eulee's green span of Wells Fargo. Please go ahead.

Thank you. Our next question is coming from Elyse Greenspan of Wells Fargo. Please go ahead.

Hi, Thanks, Good morning, Mike.

Speaker 1: I think some good morning. My question is just I was hoping to get some color if you guys have any line of sight into the reduced full service free fee pressure that you guys have guided you.

My question is just I was hoping to get some color. If you guys have any.

Line of sight into the reduced full service fee pressures that you guys have guided to.

Heather would you like to begin.

Speaker 12: Sure, thank you and good morning, Elise. So, you know, a couple of things that I would point to you around the fee pressure and as, you know,

Thank you and good morning, Elyse so.

Things that I would point to around the fee pressure and and as you know.

We've noted in the presentation in the quarter, we did see.

Speaker 12: was noted in the presentation. In the quarter, we did see a little bit of movement in the full service fees that were driven by one time accounting items that, you know, we don't expect to repeat going forward. Now, our guidance on fee pressure has remained unchanged since investor day.

A little bit of movement in the full service fees.

Driven by one time accounting items that we don't expect to repeat going forward now are our guidance on fee pressure has remained unchanged since investor day.

Speaker 12: We talked about it in the investor day that we expect our fee pressure to ease down from one basis point for quarter down to a half a basis point. And really it's driven by three main funds.

Yeah, we talked about at Investor day that we expect our fee pressure to ease down from one basis point per quarter down to a half a basis point and really it's driven by three main fundamentals number. One is we are focused on strong pricing discipline in our existing book of business.

Speaker 12: Number one is we are focused on strong pricing discipline our existing book of business.

Speaker 12: Second is the focus on writing profitable new business and then deepening our client relationships and and we've got a lot of paths to be able to diversify revenue through growth of managed accounts and some of the enhancements we've made to our own target date funds. And at the end of the day, we are very focused on driving the revenue growth of 2 to 4% while maintaining the operating margins that we've done so since our IPO.

Is the focus on writing profitable new business, and then deepening our client relationships and we've got a lot of paths to be able to diversify revenue through growth of managed accounts and some of it.

The enhancements, we've made to our own target date funds and at the end of the day, we are very focused on driving the revenue growth.

2% to 4%, while maintaining the operating margins that we've done so since our IPO.

Thank you. Our final question today is coming from Josh Shanker of Bank of America. Please go ahead.

Speaker 1: Thank you. Our final question today is coming from Josh Shanker, a Bank of America. Please go ahead.

Speaker 13: Yeah, it's just an easy one. On the VII and thinking about the private equity, what has been your long term view of the return on that asset class and how does that fetcher into your modeling for normalize journeys?

Yes. This is just an easy one on the VII and thinking about the private equity.

What has been your long term view.

You have the return on that asset class and and how does that factor into your modeling for normalized earnings.

Christine.

Well yeah.

Speaker 9: Yeah, you know that maybe Yeah we don't Yeah

Maybe.

I can take that.

Yeah.

So it had.

Speaker 4: So we had mine. So thank you. So we assume 9% returns. That's our normalized amount. I think if you look back historically.

So thank you.

So we assume 9% returns that's our normalized amount I think if you look back historically.

Speaker 4: over the last several years, you know, and certainly, but it's supposed to be a push this meaningfully above that, but even excluding last year, 2021, we've been a little above that, but I think nine is a reasonable assumption going forward, and that's what we've built into our models, and when we say above expectations, that's what we're comparing it to.

Over the last several years and certainly.

Most recently her pushed us meaningfully above that but even excluding last year or 2021, we've been a little above that but I think nine is a reasonable assumption going forward and that's what we built into our models and when we say above expectations. That's that's what we're comparing it to.

Speaker 1: Thank you. At this time, I'd like to turn the floor back over to Rod Martin for closing comments.

Thank you at this time I'd like to turn the floor back over to Rod Martin for closing comments.

Thank you our success throughout 2021 reflects the purposeful decisions that we've made as a company as well as the commitment and dedication of our people.

Speaker 3: Thank you. Our success around 2021 reflects the purposeful decisions that we've made as a company, as well as the commitment and dedication of our...

Speaker 3: Despite the challenges posed by the pandemic over the past two years, we've remained committed to our plans, to our communities, and to our employees.

Despite the challenges posed by the pandemic over the past few years, we've remained committed to our plans to our communities into our employees.

We benefited from the diversification and strength of our businesses and this has benefited all of our stakeholders now as we look forward. We're excited about the opportunities before us as a leading health wealth and investment company, our focus on driving net revenue growth along with our strong free cash flow and increasing margins.

Speaker 3: that we've benefited from the diversification and strength of our businesses, and this has benefited all of our states.

Speaker 3: Now as we look forward, we're excited about the opportunities before us as a leading health, wealth and investment company.

Speaker 3: Our focus on driving net revenue growth along with our strong free cash flow and increasing margins will enable us to drive further earnings per shared growth. We look forward to updating you on our progress. I hope you and your families stay healthy and safe. Thank you and good day.

<unk> will enable us to further drive further earnings per share growth.

Look forward to updating you on our progress I Hope you and your families stay healthy and safe. Thank you and good day.

Ladies and gentlemen, thank you for your interest and participation in today's Voya Financial Conference. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Speaker 1: Ladies and gentlemen, thank you for your interest and participation in today's Royal Financial Conference. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your

Yeah.

Speaker 14: The.

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Yes.

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