Agents, Distribution Power Voya 1Q Results

Voya Financial's first-quarter, after-tax operating earnings rose 37 percent to $157 million compared with the year-ago period on the strength of new products, expanded distribution and higher agent productivity, executives said Wednesday.

“Our first-quarter 2017 results demonstrate a very good start to the year as we continue to execute on our plan to make progress toward achieving our 2018 financial targets,” said Chairman and CEO Rodney O. Martin Jr.

Voya plans to trim at least $100 million in expenses through the end of 2018 as the company upgrades platforms, sharpens its product focus, and improves company interaction with customers and agents, executives said in an earnings call.

Broader broker/dealer relationships, expanding sales teams and more advisors returning to selling Voya products all increased new retirement plans sales to small and midsize companies, said Alain Karaoglan, chief operating officer.

FIA deposits in the first quarter shrunk 15 percent to $458 million compared with the year-ago period, the company reported.

The drop was due to questions surrounding the Department of Labor fiduciary rule, executives said. The rule, which raises investment advice standards into retirement accounts, is slated to go into effect next month.

New York-based Voya, which manufactures and distributes life, retirement and investment management products, released a new fixed indexed annuity (FIA) in February aimed at banks and broker/dealers.

Individual life sales in the first quarter rose to $25 million compared with $24 million in the year-ago period, the company said.

Voya managers have indicated the company will focus on indexed life insurance products, which are less capital intensive and provide higher returns than some other types of life insurance.

First-quarter indexed life sales rose 24 percent to $21 million compared with the year-ago period, the company reported.

Company Reports Net Loss

The company reported a first-quarter net income loss of $143.5 million, after reporting a profit in the same period a year earlier.

The loss was due to changes in the fair value of derivatives connected to Voya’s closed block variable annuity segment, which is in run-off and not included in operating earnings, the company said.

Voya stopped selling the variable annuities in 2010.

On a per-share basis, the New York-based company posted a loss of 75 cents. Earnings, adjusted for non-recurring costs, came to 81 cents per share.

The results beat Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of 74 cents per share.

The retirement, investment and insurance company posted revenue of $2.21 billion in the period.

Its adjusted revenue was $303.2 million, which also topped Street forecasts. Fourteen analysts surveyed by Zacks expected $293.8 million.

Voya shares have declined 3 percent since the beginning of the year. The stock has risen 16 percent in the last 12 months.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].