Voya (VOYA) Q1 2026 Earnings Transcript

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DATE

Wednesday, May 6, 2026 at 10 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Heather Hamilton Lavallee
• Chief Financial Officer — Michael Robert Katz
• Head of Workplace Solutions — Jay Stuart Kaduson
• Chief Investment Officer — Matthew Toms

TAKEAWAYS

• Adjusted Operating EPS -- $2.26 per share for the quarter and $9.11 per share trailing twelve months, reflecting 13% and over 20% growth year over year, respectively.
• Return on Equity -- Over 18%, demonstrating ongoing capital discipline and profitability across the business.
• Excess Capital Generation -- Approximately $200 million generated in the quarter, matched by $200 million returned to shareholders via repurchases and dividends.
• Retirement Segment Adjusted Operating Earnings -- $209 million this quarter, and $960 million trailing twelve months, with a 14% increase year over year and segment margin of 39%.
• Retirement Fee-Based Revenues -- Gained 8%, now comprising close to 60% of total net revenues for the segment.
• Annual Recurring Retirement Deposits -- Over $50 billion reported, supporting business resilience.
• OneAmerica Integration -- Expected completion in the second quarter and addition of nearly 10 million retirement accounts to Voya Financial (NYSE:VOYA)'s platform.
• Wealth Management Revenue Growth -- Exceeded 12% year over year in the quarter, as internal expansion stays on track.
• Investment Management Segment Earnings -- $46 million in adjusted operating earnings this quarter, up 12% year over year with a trailing margin of 28.6%.
• Net Flows in Investment Management -- Positive in the quarter with approximately $7 billion of net inflows reported over the past twelve months.
• Employee Benefits Segment Operating Earnings -- $63 million this quarter and $169 million trailing twelve months, reflecting margin improvement and favorable underwriting.
• Employee Benefits Rate Increase (Stop Loss) -- Approximately 24% rate increase obtained, with in-force premium held flat due to tightened risk selection.
• Reserve Releases—Stop Loss -- $25 million reserve released for prior-year blocks as claims experience improved; over 90% of 2025 business now considered complete and well reserved for second quarter.
• Capital Return Strategy -- Continued 90%+ cash conversion; additional $150 million in share repurchases planned for the second quarter.
• Dividend and Share Count Trends -- Dividends grown steadily over five years; diluted share count reduced by roughly 14% since 2022.
• Group Life Loss Ratio -- Reported at 70 in the quarter versus a long-term target of 77%-80%; Q1 is typically the worst mortality quarter.
• Employee Benefits Sales Growth -- Segment sales rose 8% and Supplemental Health and Voluntary sales climbed 13% year over year, with block growth of 4% and a pipeline increase of 10%.
• Recordkeeping Plan Retention -- Plan retention rate above 95% including OneAmerica business, with large recordkeeping wins expected to fund in subsequent quarters.

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RISKS

• GAAP net income was lower than adjusted operating earnings this quarter due to non-cash items, as explained by CFO Michael Robert Katz.
• Stop Loss business loss pick for 2026 was cited at 87%, characterized as "conservative" and potentially indicating uncertainty around future claim development.
• CEO Heather Hamilton Lavallee stated, "we are not pivoting to growth" in Stop Loss, maintaining a focus on margin improvement and emphasizing ongoing caution in underwriting over expanding the business.

SUMMARY

Management highlighted the successful integration of OneAmerica, noting enhancement in scale, improved earnings power in Retirement, and retention above internal expectations following anticipated outflows. Investment Management maintained organic growth guidance at 2%+ for the year, supported by institutional demand and positive, though seasonally light, net flows in the quarter. The Employee Benefits segment demonstrated substantial progress in margin recovery, driven by disciplined underwriting actions, reserve management, and significant rate increases, all contributing to higher segment profitability. Strategic focus remains on disciplined capital deployment, with an active return of capital through both repurchases and dividends, and continued investment in organic platforms over acquisitions. Management cited recent legislative and regulatory tailwinds for workplace retirement savings, positioning the company to serve a growing and underserved market segment.

• CFO Michael Robert Katz said, "Margins remained strong at over 39%," underscoring the Retirement segment’s profitability alongside expense reductions expected from the OneAmerica integration.
• Head of Workplace Solutions Jay Stuart Kaduson reported, "In large recordkeeping, our wins are scheduled to begin funding in Q2 and Q3. Additionally, in Q1, we saw full-service sales in Emerging Markets, which is an important market for us, up 13% year over year." and Government segment sales up 200% year over year, expanding growth channels for Retirement.
• CEO Heather Hamilton Lavallee addressed activist shareholder interest by stating, "there is no daylight between the Board and management on the strategic path forward," reaffirming alignment and commitment to existing strategy over divestitures or structural change.
• Management described a two-year journey to restore Stop Loss profitability to targeted levels, citing that pricing, underwriting, and operational changes have now substantially de-risked the block and compressed the range of outcomes for the 2025 and 2026 cohorts.
• Chief Investment Officer Matthew Toms confirmed, "organic growth expectation, the 2%+ for the remainder of the year remains intact" for Investment Management, citing strong pipelines in insurance and international fixed income channels.

INDUSTRY GLOSSARY

• Stop Loss: Employer health insurance that protects organizations from large, unpredictable medical claims by reimbursing costs above a specified threshold.
• Reserve Release: The reduction of insurance reserves previously set aside for potentially payable claims, reflecting improved claims experience or lower-than-anticipated losses.
• Shock Lapse: The elevated policy surrenders or account outflows typically occurring after major portfolio acquisitions or migrations, distinct from routine or average attrition rates.
• RFP (Request for Proposal): A formal solicitation from employers or plan sponsors seeking bids from insurers for group benefits or risk transfer products.

Full Conference Call Transcript

Heather Hamilton Lavallee: Good morning and thank you for joining us today. Let us turn to slide four. Building on our 2025 performance, we are off to a strong start in 2026. In the first quarter, we delivered significant growth in revenues, earnings, and cash flows. We grew adjusted operating EPS by 13% year-over-year through strong execution across the enterprise while continuing to deliver a return on equity above 18%. And we generated approximately $200 million of excess capital, returning that same amount to shareholders through repurchases and dividends. Executing on our priorities, we are building on our strong momentum, maintaining robust margins in Retirement and Investment Management, and continuing to drive margin and earnings improvement in Employee Benefits.

Our momentum is clear and our advantage comes from our diversified, resilient business model built to perform across markets and business cycles. I would like to touch on a few highlights from the quarter. In Retirement, we generated over $200 million in adjusted operating earnings, delivering trailing twelve-month margins of 39% while continuing to invest in future growth. We continue to expect positive net flows for the full year, more than offsetting the exit of a large recordkeeping plan in the first quarter, which was expected. Revenues grew year-over-year supported by more than $50 billion in annual recurring deposits, giving the business a resilient foundation across market conditions. Our acquisition of OneAmerica has been a strategic and operational success.

It has meaningfully strengthened both the scale and earnings power of our Retirement business, which now serves nearly 10 million retirement accounts. We expect to complete the integration in the second quarter. And we are building on that strong foundation by expanding the advice, guidance, and planning we provide through our Wealth Management business, helping customers better meet their financial needs. In Wealth Management, expansion remains on track, with first-quarter revenues up more than 12% year-over-year. In Investment Management, we entered 2026 with strong momentum driven by continued demand from clients across both institutional and retail markets. We remain confident in our ability to deliver 2%+ organic growth this year.

We drove margin expansion by continuing to scale key strategies across insurance, private and alternative assets, and international retail markets. These are the channels where we have clear competitive advantages and are seeing strong commercial momentum. Our investment performance shows we are delivering for our clients, with 78% of assets outperforming peers or benchmarks over three years, and 82% outperforming over ten years. In Employee Benefits, we generated significantly higher operating earnings through disciplined execution across the portfolio. Across all lines within the business, decisive underwriting and pricing are resulting in higher margins. In Stop Loss, the pricing, underwriting, and reserving actions we took last year have us firmly on the path to full margin recovery in this business.

Our near-term focus on restoring the profitability and earnings power of this business is the most value-accretive path we can take for shareholders. And this value is already emerging in the results we delivered this quarter. Michael Robert Katz will provide additional detail in a moment. Our strong results this quarter reflect the durability of our cash generation, our strong earnings power, and our continued commitment to disciplined execution. With that, I will turn it over to Michael Robert Katz to walk through the financials in more detail.

Michael Robert Katz: Thank you, Heather. Financial results this quarter were strong, providing a solid start to the year. In the quarter, adjusted operating EPS was $2.26 per share. On a trailing twelve-month basis, adjusted operating EPS totaled $9.11 per share, representing growth of over 20%. EPS growth highlights our consistent execution and capital discipline. We generated higher revenues across all segments, and our continued expense discipline is sustaining our robust margins in Retirement and Investment Management while expanding margins meaningfully in Employee Benefits. In the quarter, GAAP net income was lower than adjusted operating earnings primarily due to non-cash items. Overall, our results highlight the durability of our business mix and the resiliency of our capital generation.

With that, let me turn to our segment results. Turning to Retirement on slide seven. Retirement continues to demonstrate the strength of our scaled franchise. We generated $209 million of adjusted operating earnings in the quarter and $960 million over the trailing twelve months, representing a 14% year-over-year increase. Higher net revenues were primarily driven by an 8% increase in fee-based revenues. Fee-based revenues have grown meaningfully over the last several years and now represent close to 60% of total net revenues for the segment. Spread income remained resilient, reflecting disciplined portfolio management and continued focus on risk-adjusted returns. Margins remained strong at over 39%.

Looking ahead, we expect expenses to step down in the second quarter due to normal seasonality and, as the year progresses, we anticipate further reduction in spend as the OneAmerica integration work concludes and the organization transitions to steady-state operations. Turning to flows. Our outlook for flows remains unchanged. We expect strong net inflows in the second quarter and full year supported by healthy retention and a robust pipeline. The first-quarter commercial result was primarily timing-driven and as expected. Reinforced by disciplined execution, Retirement is delivering strong profitability and is well positioned for continued growth. Turning to Investment Management on slide eight. The business’s differentiated client-focused solutions continue to deliver investment performance and financial results.

We generated $46 million of adjusted operating earnings in the first quarter, up 12% year-over-year and up 8% on a trailing twelve-month basis. Overall net revenues drove the result, supported by higher institutional and retail fees. Our trailing margin of 28.6% reflects the benefit of these higher revenues and expense discipline. Net flows were positive in the first quarter and the pipeline remains healthy. In institutional, we continue to see strong demand from clients for private market strategies including private fixed income and commercial mortgage loans. Clients continue to value high-quality investment grade private credit solutions where we have a long track record, and we see structural demand for the asset class.

In retail, international demand for our differentiated income and growth strategy remained resilient, which helped to offset industry-wide headwinds in the U.S. market that affected domestic flows. Over the past year, we generated approximately $7 billion of net inflows. And with a healthy pipeline in place, we remain confident in building on that success and driving strong organic growth at attractive margins in 2026. Turning to Employee Benefits on slide nine. We continue to execute a deliberate strategy to expand margins, which has meaningfully improved run-rate earnings in Employee Benefits. Our progress is clear in both the $63 million of adjusted operating earnings we generated in the first quarter and the $169 million we reported over the last twelve months.

The key driver of the year-over-year improvement was strong net underwriting results. In Group Life, claims experience was favorable in the quarter, driven by lower frequency and severity. And in Voluntary, results are tracking in line with our expectations. In Stop Loss, the actions we have taken with underwriting and risk selection have us well positioned to return margins back to target levels. In the quarter, we released $25 million of reserves. 2024 is now behind us, which drove the majority of the reserve release. We also released a portion of the reserves for the 2025 blocks as experience improved in the first quarter.

We are now over 90% complete with the 2025 business and are well reserved heading into the second quarter. The work we did last year has positioned the 2026 business for meaningful improvements. We strengthened the team with new leadership and specialized resources, improving risk selection through more selective quoting and deeper clinical reviews. That discipline, combined with an industry-wide repricing environment and an increase in RFP volumes, helped drive approximately 24% rate increases while keeping in-force premium flat. With pricing and underwriting actions now firmly embedded, we are on a clear path to restore Stop Loss margins back to long-term targets.

Looking ahead, our first-quarter results reflect continued progress in improving earnings power, and we remain confident in the path to further margin expansion in Employee Benefits. Turning to slide 10. This was another strong cash flow quarter as excess capital generation was approximately $200 million. We continue to convert cash at 90%+ levels. In the quarter, we returned approximately $200 million of capital to shareholders through a combination of share repurchases and dividends. And we are executing an additional $150 million of share repurchases in the second quarter, underscoring the durability of our cash generation. Our business mix and earnings growth are driving a return on equity of over 18%.

In summary, our balance sheet remains a strength supported by durable free cash flow generation that positions us well to drive long-term shareholder value across a range of market conditions. Turning to slide 11. This view looks beyond any single quarter and reflects how execution supports capital deployment over time. We have steadily grown dividends over the past five years and at the same time we have returned significant capital through share repurchases. This has reduced diluted shares outstanding by roughly 14% since 2022. Our ability to consistently repurchase shares allows us to increase dividends each year while maintaining a payout ratio of approximately 20%.

Importantly, these returns have been balanced with ongoing investment in our business to enhance customer and client outcomes and support future business growth. In closing, we delivered a strong quarter driven by consistent execution, high free cash flow, and disciplined capital deployment to create long-term shareholder value. We are executing on our strategy and our priorities are unchanged: grow the franchise, maintain balance sheet strength, and return excess capital to shareholders. With that, I will turn it back to Heather Hamilton Lavallee.

Heather Hamilton Lavallee: Thanks, Mike. Turning to slide 12. Looking ahead, our priorities are clear and compelling and are driving tangible financial results. We are growing excess cash generation while maintaining balance sheet strength and flexibility. We are advancing commercial momentum across Retirement and Investment Management, and we are laser focused on realizing additional margin improvement in Employee Benefits. Together, these priorities define how we run the company with unwavering focus on creating long-term shareholder value.

Before we close, I want to share that we are encouraged by the recent legislative and regulatory momentum that is expanding access to retirement savings for Americans who have historically been underserved, especially workers at small and mid-sized employers who have lacked a clear path to workplace savings. These policy initiatives include coverage mandates, mandatory auto-enrollment, and protections for caregivers and non-traditional workers. These important measures will help address the overwhelming need for additional retirement savings, particularly among the most vulnerable segments of our workforce. Voya Financial, Inc. is a leader in providing retirement security to the American worker and their families.

We welcome these policy developments and are among those companies best positioned to serve the growing demand for financial solutions that will allow more Americans to retire securely. I want to thank our employees, who relentlessly work to create better financial outcomes for the customers and clients we serve, which is always our number one priority. We remain focused on executing our strategic priorities, returning capital to shareholders, and driving outcomes for our customers over the long term and across market cycles. With that, I will turn it over to the operator so we can take your questions.

Operator: We will now open the call for questions. Our first question is from an Analyst with Morgan Stanley. Please proceed.

Analyst: Hi, good morning. My first question is actually on the Group Life business. Group Life loss ratio was very favorable, 70 versus a long-term target of 77 to 80. It has been trending fairly favorable over the past four quarters, and the industry does look like that is where things are going. Can you maybe give us a little bit more detail about what you are seeing there? Generally, first quarter tends to be the worst quarter for the loss ratio for Group Life. Are we thinking the 77 to 80 maybe is not where we are going to land this year? Maybe give us a little bit of color on that?

Michael Robert Katz: Hey, Bob. It is Mike. Look, I think you are thinking about it right. And we do typically see Group Life running a little higher than the 77% to 80%. Q1 usually is the worst mortality quarter for Group Life. So we are certainly very encouraged by what we are seeing in the quarter and it has been a good trend for us. We are spending a lot of time. We talk a lot about Employee Benefits and the margin expansion there. Group Life is another area we are focused on. I think it is a little early right now for us to suggest a lower loss ratio for the balance of the year.

If you factor in the first quarter from a calendar-year perspective, certainly we would expect to be better than the 77% to 80% given the result in the first quarter. But right now I think the base case is back to range in the second, third, and fourth quarter.

Analyst: Okay. Got it. Really helpful there. Thank you. My second question is on the net flows. You gave some decent color in terms of where things are going. But if we think about Investment Management, net inflow was about $65 million for the quarter. If we are thinking about positive flow, we are looking at probably $6 billion or $7 billion of net inflows in the rest of the year. Is that ballpark sound about right? Can you give us a little bit more color on how to think about Investment Management flows going forward into the rest of the year?

Matthew Toms: Sure, Bob. This is Matt. I will unpack that a little for you. Looking back, the trailing twelve-month number is right in that ballpark that you referenced. That is a $7 billion number and that is roughly a 2% organic growth rate for the trailing twelve months. As you acknowledged and as we mentioned, the flows in the individual quarter this quarter were a little light. But as we look forward, our confidence around maintaining that growth level is driven by, in the institutional space, our continued strength in insurance. We saw a good first quarter in insurance, and we have good visibility into the second quarter and the rest of the year in insurance.

And again, that is a channel that has demonstrated really nice growth over recent years, a differentiated value prop, and one where you can see volatility quarter to quarter but feel very good on the forward look. More broadly on the institutional side, we see opportunities we have been working on for some time internationally on the fixed income side. And then domestically, CLO creation is likely to improve into the second quarter and the rest of the year. On the retail side, a little bit more detail there. The income and growth franchise internationally continues to be a stalwart for us. Nice performance first quarter. We think that continues for the year.

Where there is some in broader equity markets, where we had market volatility, was in thematic equities internationally. We are already seeing, with stronger markets in the second quarter, some bounce back there. We will see where that ends. Obviously, there is a lot of dynamism in the broader markets. But broader strength, including U.S. fixed income, makes us feel pretty good about the forward look. Bottom line, organic growth expectation, the 2%+ for the remainder of the year remains intact.

Operator: Our next question is from an Analyst with TD Cowen. Please proceed.

Analyst: With regard to the Group Stop Loss business, if I am reading slide 43 of the supplement correctly, it appears that the 2026 loss pick is 87%. And my sense is, given all the rate increases you have attained, that it is a pretty conservative loss pick and perhaps we could see releases as we are seeing for the 2024 and 2025 years. Am I thinking about that right? Do I have the number for the loss pick right?

Michael Robert Katz: Hey, Andrew. It is Mike. Maybe first on the reserving part of this. We continue to set reserves on the high end of reasonable outcomes. And so I think you are thinking about it right from that perspective. What gives us a lot of confidence around how the 2026 business is really going to perform are some of the things I mentioned in my remarks. When you look at this from a price perspective, getting 24% on that book of business, we feel really good about that. But more importantly, the work we did last year around strengthening the teams, ensuring we got the best risk selection, and getting to do that with even more RFPs.

RFPs continue to build in Stop Loss. So we are getting a look at a lot of different things. This is really the best we have felt around Stop Loss in quite some time. We feel good about the 2026 business. Stepping back, we are seeing improvement now. That is encouraging, but we think there is more to come.

Analyst: Got it. Thank you for that, Mike. And then it is pretty clear in the media we have been hearing about an activist and the talk has been around their interest in you either divesting Group Stop Loss and/or putting the company up for sale. So it has been out there. Hate to ask about it, but maybe you could comment a little bit about that.

Heather Hamilton Lavallee: Yes. Good morning, Andrew. It is Heather and I certainly appreciate the question. We are regularly engaging with our shareholders. And at the end of the day, our actions and how we deploy capital are guided by what is in the best long-term interest of our shareholders, as well as our customers. As part of our normal governance with our Board, we are constantly evaluating different strategic options that we can pursue across the whole portfolio to drive shareholder value.

But where we have aligned very clearly is that the path we laid out eighteen months ago—continuing to grow Retirement and Investment Management, where we had a terrific 2025 and are off to a great start—and importantly, the earnings improvement in Stop Loss, where we demonstrated real value in 2025 and again are off to a great start. That is where we have full alignment and full conviction. And there is no daylight between the Board and management on the strategic path forward.

What we have laid out very clearly in the presentation and what you heard Mike and me talk about in our prepared remarks, we have tremendous conviction in our ability to deliver on that and drive further shareholder value.

Operator: Our next question is from Ryan Joel Krueger with KBW. Please proceed.

Ryan Joel Krueger: Hey, thanks. Good morning. I wanted to come back on Stop Loss. Last quarter, you said you expected calendar-year improvement. The Stop Loss ratio was 84% last year. I think just mathematically, if I take a loss pick of 87% and your 1Q loss ratio, it would imply it would be higher than 84%. So the only way to get that is more reserve releases. Am I looking at that right? Are you still confident that you will get calendar-year improvements this year?

Michael Robert Katz: Hey, Ryan. It is Mike. That is the base case. Maybe just first: when you think about claims experience and the emergence of claims that we saw 2024 into 2025, or what we are seeing now from 2025 to 2026, claims are coming in faster. When we were in the fourth quarter, we were only two-thirds complete. Now, as you look at the 2025 business, we are about 90% complete. And as Andrew was asking, we still are on the high end of reasonable outcomes from a best-estimate reserving perspective. So the base case, if that gets to more middle or low end of the range, absolutely we would expect the calendar-year loss ratio to perform better than 84%.

One way you can look at that is seeing where the reserves were set a year ago on the 2024 business versus where we have 2025 right now. It is a couple points better. That is what we are seeing. We are seeing that through April. If we continue to see that in May and June and in the third quarter, that is exactly what is going to happen.

Heather Hamilton Lavallee: And, Ryan, it is Heather. The only add that I would have is I quite honestly have not been this confident on Stop Loss for eighteen months. For all the reasons that Mike laid out, we have real conviction in our ability to drive continued margin improvement and get this business back to the full earnings potential we know it can generate.

Ryan Joel Krueger: Thanks. And then this is slightly different, but also on Stop Loss a little bit. How intertwined is your Stop Loss business with the Voluntary and other group products in Employee Benefits? In other words, as you have been pulling back on Stop Loss to reprice the business and improve profitability, to what extent is this having a negative impact on the growth of the other product lines in that business? Or are they not that interrelated at this point?

Jay Stuart Kaduson: Hi, Ryan. It is Jay. I will take this one. We see Stop Loss right now as another important risk transfer solution. It is rising in demand from our employers. While we are not seeing Stop Loss and broader Employee Benefits in a bundled sale today, it is another important solution for our employers and, even more importantly, for brokers who are actively looking to grow their Stop Loss books given the heightened demand in the market. So Stop Loss we see as a door opener for new brokers who are entering the space as the demand is increasing. It is also driving tighter alignment and value with the existing Employee Benefit broker relationship.

Since I joined sixteen months ago, we have been focused on the workplace strategy, structure, and the people. I could not be happier with the new workplace leadership team, specifically for Stop Loss. We focused on bringing in strong leaders with deep expertise, and what you are seeing today is a really tight flying formation with our leaders in risk, pricing, underwriting, and distribution. As you can see in our results, the new team is already driving meaningful change. Our commercial momentum and results, as you referenced and talked about the impact it is having in our Employee Benefits business—Employee Benefits sales are up 8% year-over-year with persistency remaining strong.

In our Supplemental Health and Voluntary business, where we continue to grow from a top-three provider position, we are really pleased with the results to start 2026. Our pipeline is up 10%. Sales are up 13% over prior year. And that has resulted in block growth of 4%. Overall, the positive commercial momentum we are seeing in Employee Benefits is deepening our relationships with our intermediaries and our customers through this connection point on additional risk transfer and Stop Loss.

Heather Hamilton Lavallee: And, Ryan, if I can just add, it is Heather again. Three additional points on Stop Loss and why it is so important. First, we are seeing increasing demand from employers for Stop Loss. RFP volumes are up 200% year-over-year, and it shows there is a real need in the market for this, but there is also limited supply. And why that is so important is if you think about that increased RFP activity, we can continue to be selective when we are doing our underwriting. That limited supply also holds up the hardening market and our ability to get price for this business.

Operator: Our next question is from an Analyst with JPMorgan. Please proceed.

Analyst: First question is for Mike on Stop Loss. You had mentioned that Stop Loss claims are coming in faster. Is there something you changed in your operations that is driving that? Or is it claim amounts being larger and therefore hitting retentions faster? I think one of the difficulties with Stop Loss is your excess position, but I was wondering if you are getting better line of sight into the claims even before they break retention level.

Michael Robert Katz: Hey, Pablo. I think it depends if you look at it from a reported or paid perspective. If you are looking from a paid perspective, absolutely, the operational effects matter and we are turning through claims faster. We have got more people. Jay just talked about the talent we brought in. We are excited about that. What we are trying to get at more is around the reported side and what we are seeing from 2024 to 2025 and now again 2025 to 2026, where the claims experience is coming faster. We have talked a lot about cell and gene therapies.

We have talked a lot about the severity of claims coming in and, frankly, some of the health care providers trying to move that through the system because they are thinking about their P&L faster. Stop Loss is a tail product. We would typically see that more on the later side. Q4 2025 was the first time we saw that. As we were sitting here in the fourth quarter only two-thirds complete with experience, we were not sure if that was necessarily going to be a trend once again. So you are certainly going to want to be on the higher end of a best-estimate range being put in that position.

The good thing now that we are 90% through, we are seeing that again. We think this is the new normal post-COVID. That is a good thing. Again, we are running a couple points better when we look at it from a reported perspective year-over-year. You can see that through the reserves and the disclosure. That has us feeling really good. And April has us feeling really good. This is, as Heather was mentioning, a big part of the cash generation expansion story for us in 2026 and beyond. We are really looking forward to letting the experience speak for itself, and we expect it to in the balance of the year.

Analyst: Thanks for that. And my follow-up is also on Stop Loss. Taking a step back, if you look at results of other insurers you compete with in the market, they have historically reported loss ratios in the low 70s. You have run high 70s, low 80s in a more normal environment. And then you have the health insurers that run much higher. Given the experience of the past couple of years, does that entail a change in your approach to pricing, given the fact that maybe there is more volatility in this business than previously appreciated? Maybe running at an 80% ratio is not the right level considering the volatility. Thank you.

Michael Robert Katz: Hey, Pablo. I think you are thinking about it very similarly to how we do. Maybe just the only caveat is that sometimes when you are looking at other companies, they do have captive businesses. That is different than more fully insured Stop Loss. Sometimes that can conflate what you are looking at. But as far as where is the end state on this, I think we are thinking about it exactly like you are.

Operator: Our next question is from an Analyst with Raymond James. Please proceed.

Analyst: Hey, good morning. From some of the healthcare insurers’ 1Q 2026 reporting, it sounds like medical trend is moderating somewhat. Still high and, of course, it has been unprecedentedly high over the last couple of years, but maybe rising at a more modest pace. Are you seeing any of that? And just talk about what you are planning for this year. Thanks.

Michael Robert Katz: We are definitely seeing a bit of that. I think it is really early. It is a good sign. Yes, if you look peripherally at some of the healthcare companies out there, you are definitely seeing some of the turnaround there. That is very encouraging for us. It is really early though for us to in any way declare that is going to come through results in a big way.

But as we have been talking about, the fact that we got 24% on this 2026 business, everything Jay talked about on the team, the risk selection we are getting, as Heather mentioned, the number of RFPs we are getting a look at—I think these are all very good signs around the trajectory of where this business is headed. We are encouraged by that. We are going to let the results play out and that will illustrate the progress.

Analyst: Okay. Thank you. And then this kind of goes back to the question on the activist a little bit, but we think Voya Financial, Inc.’s management team is strong and we think you are doing a great overall job running the company. But results were a bit soft across a few important metrics this quarter. Of course, there is a lot of volatility in the market and also medical inflation. Could you give us some visibility into the coming quarters and some of the areas where you plan to show progress on growth? Thanks.

Heather Hamilton Lavallee: Let me start, and first appreciate the support. We do not necessarily look at progress on a quarter-by-quarter basis, but really on a full-year basis. We are pleased with the results in the quarter with earnings up, but let me toss it to Jay to talk a little bit about the commercial momentum, specifically what we are seeing in Retirement. I think Matt answered the commercial momentum question, but if not, we could certainly circle back to that. Jay?

Jay Stuart Kaduson: Thanks. I will highlight a little bit of what we are seeing in Retirement and Wealth. I talked briefly about Employee Benefits and where we were seeing the growth. I am happy to answer any follow-up questions on that. As it relates to Retirement, as I referenced last quarter, we expected strong flows in 2026 with most of that growth back-half weighted. We had visibility into the planned first-quarter outflows, which are largely timing-driven in OneAmerica and due to a known single large plan outflow. We equally have visibility into the known plan implementations in 2026 and that is going to result in positive net flows not only in Q2, but for the full year.

Our full-year 2026 outlook is unchanged. We are on track for a fifth consecutive year of positive organic DC net flows. It is worth noting, our sales momentum remains solid across our key segments. In large recordkeeping, our wins are scheduled to begin funding in Q2 and Q3. Additionally, in Q1, we saw full-service sales in Emerging Markets, which is an important market for us, up 13% year-over-year. And in Government, where we are a leader, we were up 200% year-over-year. In addition to all that, I also look at plan retention and see that our plan retention was over 95%. A reminder, this includes the expected impact of OneAmerica surrenders.

All of that speaks to the strength we have right now with our sponsors and intermediary relationships. Overall, in Retirement, I am seeing really strong commercial momentum for the business in 2026. Translating that over to Wealth Management, we are starting to see early days in the build, but I am seeing success. I am pleased with the team, and they have achieved meaningful growth year-over-year of 12%. That is both on a revenue and an asset view. In addition, we have seen really strong adviser productivity, particularly those we have onboarded in 2025 and 2026, as we have been stepping up our recruitment of advisers.

Stepping back on the Wealth Management build, it is embedded in the Retirement business’s strong 39% margin. This is a really solid result. Our clients are increasingly asking for more advice and guidance at the workplace. We are well positioned to fill this demand. Overall, I am pleased with the Wealth Management build and the overall growth, particularly in alignment with our Retirement business.

Heather Hamilton Lavallee: And if I can add one other perspective from the enterprise: if you think about the collection of points made today about commercial momentum in Investment Management, the confidence we have in the Employee Benefits earnings outlook, and the Retirement momentum Jay just talked about, all of those collectively give us the confidence in further growing cash generation, which is one of our number one priorities, and our commitment to returning that capital to shareholders.

Operator: Our next question is from Thomas George Gallagher with Evercore ISI. Please proceed.

Thomas George Gallagher: Good morning. Just a few follow-ups on Stop Loss. Heather, if I listen to your comments about everything, including the activist and the way you are thinking about things, is it fair to say that you think Stop Loss is a core part of the long-term Voya Financial, Inc. franchise? Or is that something you would consider divesting if the situation was attractive enough?

Heather Hamilton Lavallee: Good morning, Tom. Thanks for the question. We have talked about seeing the earnings improvement in Stop Loss as the most immediate source of value creation for shareholders. We have already made great progress with $100 million earnings improvement in 2025 on a year-over-year basis and $140 million earnings improvement on a trailing twelve-month basis if you just look at the first quarter. It is very valuable for us in terms of earnings and cash generation. More broadly across the portfolio, we see this as a valuable part of our portfolio. There is a lot of client demand, growing client demand, limited supply, hardening of the market, and the ability to get price.

We see this as continuing to be an earnings grower for the firm. At the end of the day, Stop Loss is one where it is going to be value creation for shareholders, and it is also a strategic asset for Voya Financial, Inc. at the enterprise.

Thomas George Gallagher: Got it. Thanks for that. And then based on your description of what you are seeing, it sounds like you are more constructive on where this business is headed. As you approach the midyear 2026 renewals, are you thinking about leaning into growth now? Or are you still at the part of your process where you need to further reselect and you may not grow yet?

Heather Hamilton Lavallee: The quick answer is no, we are not pivoting to growth. We continue with our focus on margin improvement in Stop Loss and being very disciplined with pricing. Frankly, we are focused on margin improvement across overall Employee Benefits. So right now, steady as she goes on that margin improvement plan and delivering on the earnings that we know we can deliver with this business.

Operator: Our next question is from Wesley Collin Carmichael with Wells Fargo. Please proceed.

Wesley Collin Carmichael: Hey, good morning. Thank you. A couple of follow-ups as well. One question on Stop Loss and loss trend. Any update on how that is tracking relative to your 24% rate increase? You mentioned that claims are coming in faster. Are you seeing any change in trends in the type of claims that are inflecting inflation? And, Mike, I think you made the comment that maybe the range of outcomes for the business has kind of doubled—maybe that was last quarter or the quarter before. Do you still have that view?

Michael Robert Katz: Wes, it is Mike. First, we are pricing everything to get back to target. As you alluded to, at the end of the fourth quarter with two-thirds complete, there definitely was a wider range of outcomes. That has narrowed for the 2025 block as we get into the first quarter, now 90% complete. As I mentioned, we are running a couple of points better than where we were a year ago relative to 2024 business. That is a good sign. And what we are seeing in April is also a good sign. If this continues, then we will see some reserve release in 2025. Similarly, we feel well reserved on the 2026 business, given all the actions we have taken.

We are heads down on it, and we are going to take the same approach in the middle of the year and let the results speak for themselves. We believe this is going to be a big part of that cash generation expansion story for Voya Financial, Inc. at the franchise level that we have been talking about. We are in the second year of the journey, and we like where we are right now.

Wesley Collin Carmichael: Got it. Thanks. Switching to Retirement, during the quarter it looks like there were some elevated outflows. I know you spoke to the net inflows for 2Q and the full year, but what are you seeing in terms of shock lapses from OneAmerica in the quarter and how long that should continue?

Jay Stuart Kaduson: Thanks, I appreciate that question. On the OneAmerica integration, we are near complete. We are really pleased with where the retention is landing. OneAmerica’s retention is embedded into the comments around positive net flows in Q2 and for full-year 2026. This transaction has enhanced our scale and our distribution. On distribution, we have onboarded the Edward Jones relationship and are fully engaged in this new distribution relationship. On completion, the team is nearing completion of the final migration wave later this month, which will include approximately 3 thousand plans. I am focused on the team’s execution on this integration.

The value we are delivering for our customers and our intermediaries that we have onboarded through this integration has been really strong. You are seeing the results of that. I am really pleased with where we are on overall retention and OneAmerica’s embedded outcomes.

Heather Hamilton Lavallee: And, Wes, on the finer points specific to OneAmerica: we had always expected to see higher surrenders than our normal book—the shock surrenders—through the migration period, which ends at the end of the second quarter of this year. After that point is when we should expect things to moderate, but you are seeing those in the first quarter.

Operator: Our next question is from Joel Hurwitz with Dowling & Partners. Please proceed.

Joel Hurwitz: Another one on Stop Loss. Mike, you mentioned you are running a couple of points better on 2025 at this point, but I think you might have pointed to the loss ratio on that. Can you talk about paid trends? Are paid trends at this point running a couple of points better year-over-year?

Michael Robert Katz: Paid is roughly a point better. It gets to the question earlier around operations. Year to year, it is one of the things you always have to be careful with on paid. Our staffing levels are much higher in 2025 than they were in the prior year, and that will have an effect on paid. That is why I would point you to reported and why we are trying to anchor you to approximately two points better at this point in the journey.

Joel Hurwitz: Got it. And then back to Retirement. How much of the full-service redemption pressure is OneAmerica? Can you comment on how the legacy Voya Financial, Inc. full-service book has been performing from a retention standpoint? And sounds like the pipeline is very strong for the back half. Any color on the mix between recordkeeping and full service there?

Jay Stuart Kaduson: What we are seeing right now is with the OneAmerica planned surrenders and outflows, we are still sitting at over 95% retention, which is a really strong number. On the back half, I talked about where we see flows coming in and it being back-half weighted last quarter. A positive development is we are seeing some early funding in Q2, and we will be seeing positive flows. On the mix of business, I do not think you are going to see a materially different mix of business between full service and recordkeeping.

As a reminder, providing advice and guidance in Wealth Management—those recordkeeping plans provide tremendous value to us as we are bringing advice and guidance, and plan sponsors are looking for that. There is value through the ecosystem in those recordkeeping plans. You should see a very similar mix as we complete the year with a high retention rate. I am pleased with where that is, and you should see a fifth consecutive year of positive flows through the end of the year.

Operator: Our next question is from Joshua David Shanker with BofA Securities. Please proceed.

Joshua David Shanker: Thank you for taking my question. Much of it has been answered. One more Stop Loss question. Given that you are marking the new book at 87% combined with double-digit rate increases and 2% premium decline, I am trying to better understand the unit volume. As Mike said, it is being booked with the hope that it is conservative, so it might later yield favorable development. How should I think about that 100 to 300 basis point reduction in the benefit ratio against the backdrop of double-digit price increases?

Michael Robert Katz: Josh, I would just think of it as—and this is what Heather was talking about—we are being really careful about what we let into our block. That includes what already exists in our block and new business that could potentially be in our block. We are being very selective with risk selection coming out of this health care cycle. We understand that the relative value of a point of margin is meaningfully better than a point of growth. So even into the middle of the year, it is the same philosophy. We want to make sure the block is as clean as possible.

We think that is the most productive and fastest way to the earnings expansion that we have been talking about and the progress in the second year of this two-year journey.

Heather Hamilton Lavallee: And, Josh, it is Heather. I would reiterate the parts and pieces: the 24% rate increase, reserving on the high end of the range, and the strengthening of the underwriting. Those are all the components of why we feel so confident in our ability to get continued margin improvement within 2026.

Joshua David Shanker: Is there any relationship between policy renewal persistency and the potential for adverse selection in you putting up such a conservative mark? With these amount of rate increases, presumably, the year-over-year improvement in the margin should be much better, but maybe you are somewhat worried that you have a book of business that is at greater risk.

Michael Robert Katz: Not really, Josh. Not to get too deep into this on an earnings call, but happy to get into it deeper with you afterwards. We look at the block under different risk dimensions. There are parts of the block that are going to get rate increases much higher than 24%. There are parts of the block that are getting rate increases that are much lower than 24% because we like that risk and we want to keep it on the book. Think of the 24% as an aggregate and think of us as being very selective around what we like and what we think requires much higher rate increases.

It is the right question thinking about it in aggregate, but we really dive into this to make sure the block is as healthy as possible.

Operator: Our next question is from Suneet Kamath with Jefferies. Please proceed.

Suneet Kamath: Thanks. I wanted to go to Stop Loss again, specifically the comment about the most value-accretive path is to return it to full margins. Does that imply that you tested the market in terms of interest from external parties when you make that statement? What is behind that?

Heather Hamilton Lavallee: Suneet, as I mentioned, with our Board we are always looking at different options across all of our portfolio. We are laser focused on the earnings improvement as the most immediate and value-accretive action that we can take for this book of business.

Suneet Kamath: Okay. Sticking with the Board, and I appreciate the comments about alignment between management and the Board and all the commercial momentum you have shown over the past couple of years, including the first quarter here. But if I look at the stock’s P/E, it is at a significant discount to what I would consider to be your peers. That has occurred despite the fact that you have exited some risk businesses like CBVA and Individual Life, and that was even before Stop Loss had issues. When you think about these conversations with the Board, how do you explain that? And what is the path to try to get a better valuation here?

Heather Hamilton Lavallee: It all comes down to execution. If you go back and look at the priorities we have laid out, our focus is on executing every quarter, every year, and delivering shareholder value. I would look to the proof points. First, it starts with how we are delivering for our customers, and our customers are voting with their feet. Look at the commercial momentum—we are coming off two record years in Investment Management, strong margins, great investment performance, and the confidence we have in continuing to drive that growth. As Jay mentioned, five years of positive flows in Retirement and margins that are industry-leading. We have a lot of confidence in continuing to grow.

The proof points we have delivered already on Employee Benefits—$100 million earnings improvement in 2025 and $140 million on a trailing twelve-month basis. The collection of those businesses ties back to our focus on continuing to drive growth in our free cash flow generation and then returning and deploying that into the most accretive opportunities, including returning capital to shareholders. We think doing all of that will continue to drive our share price and the value of the franchise.

Operator: Our next question is from Michael Augustus Ward with UBS. Please proceed.

Michael Augustus Ward: Thanks. Good morning. In Retirement, can you give us an update on the inorganic pipeline potential?

Heather Hamilton Lavallee: Good morning, Mike. Thanks for the question. We have been active and vocal on how pleased we are with OneAmerica—the integration and adding new clients—and delivering over a 30% return on that acquisition. We are active and looking for Retirement roll-ups, but we do not see anything imminent. That goes to what Mike and I have been talking about: with the excess cash we generate, the expectation is that we will deploy it into the highest value, which is buying the company we know—Voya Financial, Inc.—through share repurchases.

Michael Augustus Ward: Thanks, Heather. And then on the Wealth business, you said revenues up 12%. How is that going so far and how much of that is driven by organic conversion versus markets? Overall, how is the reception in terms of turning on the advice switch?

Heather Hamilton Lavallee: You are right. Our focus there is on revenue growth, and that is the metric we are looking at for success. It has been just ten months since we stood up this office and we are really pleased with what we are seeing. I will turn it to Jay to elaborate.

Jay Stuart Kaduson: If we look at the Wealth business and where we have a right to win—between the roughly 10 million customers we have through our Retirement business and equal that through our Employee Benefits and benefit-focused business—and looking at the request for advice, in my career this is probably the loudest employers have been in seeking advice at the workplace. We are well positioned. When we service our customers the right way through Retirement and Employee Benefits, we build their trust. That trust translates to the ability to bring advice to the workplace.

Because that advice is being sponsored by employers and plan sponsors, and we have an existing relationship and solution with that client, we think we have a unique advantage to continue to build lifetime value for our customers. That also allows us to connect into Matt’s business where he is helping us build some unique solutions in the marketplace. When you look at the overall Wealth Management business and how we have been building it, we have been building it through recruitment of our advisers. We are happy with the early development and productivity of those advisers. The tools we have onboarded have helped us create efficiencies.

There is more and more demand for digital self-service, which is a future component of our build. I like where we are at. I also like that the build is sitting inside our 39% margin in our Retirement business. Overall, a really productive build for us and aligned with where our employers and plan sponsors are looking for advice and guidance.

Operator: Our next question is from Alex Scott with Barclays. Please proceed.

Alex Scott: Hey, thanks for taking it. I have one follow-up on Stop Loss. I heard a comment that we are two years into a two-year journey, and that sounds like next year you would be back at targeted margins. I want to understand if I am hearing that correctly and the timing associated with that comment. Maybe help us understand how we get there. Even if we give you the benefit of the doubt on some of the reserve development, it still seems like we are a decent amount above where you would be targeting right now. Do I have that right?

Anything you can tell us about the IBNR or something you are seeing to help us put numbers behind your optimism?

Heather Hamilton Lavallee: Alex, thanks for the question. I will start with the thematics and then toss it over to Mike. You are right. When all of this started coming out of COVID and we saw the impact on the broader industry, we have always said we expect this to be a two-year journey and not something that was done in one year. We really like the progress. As Mike mentioned, we are pricing the business to be back within target loss ratio. That is the goal we have laid out. We will see how things progress through the year, but we are confident in seeing that improvement.

Alex Scott: Follow-up question related to a couple of peers engaged in a merger of equals. Both of them were much smaller peers in terms of their group retirement businesses, but it does indicate an increase in importance on scale. Where is Voya Financial, Inc. situated relative to that competitive positioning? As a result of some peers scaling up, do you see any more fee compression in the competitive environment? Are you expecting to see that?

Heather Hamilton Lavallee: I appreciate the question because it gives me an opportunity to highlight that our businesses are firing on all cylinders and the scale we have. In Retirement, we are a top-five provider in the space. The acquisition we did last year with OneAmerica now serves close to 10 million participants. We would not be a scaled provider if we could not operate at a 39% margin for ten years. The expansion into Wealth Management is the right strategy where we are building on a core foundation. In Investment Management, two years of outpacing the industry in terms of organic growth, delivering strong investment performance, fees holding up well, and improving margins—those are signs of scale.

It is really about client demand in the market and the fact that we are winning, retaining business, and delivering for them. In Employee Benefits, you are still seeing sales growth in the core business while we are on this margin improvement plan. We like our position in the market. It is also supported by a solid balance sheet. We do not have a lot of noise in our balance sheet. We generate a lot of free cash flow, and we have scale where we play.

Operator: You have reached the end of our question and answer session. This will conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.

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