Voya Not Sure About Keeping Its Life Business

Voya Financial will decide the fate of its individual life business once it sheds its annuities, company executives said Wednesday.

Wall Street analysts had sought guidance and clues from the New York-based asset management and retirement company about the future of its life insurance business.

Voya Financial disclosed in December that it would sell its closed block of variable annuities (CBVA) and its portfolio of fixed and fixed indexed annuities as the company concentrates on the asset management and benefits business, which is more profitable.

As part of that announcement, the company said it would conduct a review of its individual life business.

Overhead in the life insurance business “will be a consideration as we think about what we’re going to do. But it’s a little early for us to get into those kinds of details,” said Voya CFO Mike Smith in a call with analysts on Wednesday.

“I think as we get to clarity around where we are going to go, and that should happen in the next few months, then we’ll give you a better sense of how that could flow through when we are there,” Smith said.

New Buffered VA Product on Ice

Voya’s annuity business is combined with the individual life business so once the two businesses are disentangled and the annuity business sale is completed, Voya will have an opportunity to take a new look at the life business, executives said.

“We’re looking at a number of strategic paths and really the strategic fit of the individual life business as part of Voya,” said Carolyn Johnson, CEO of Annuities and Individual Life.

Voya, which late last year announced plans to launch a buffered variable annuity in 2018 and brand it as Voya Ascend Annuity, now has “no immediate plans” to launch the product as the company prepares to sell its annuity business.

The buffered variable annuity segment is growing while the overall variable annuity market is shrinking.

The company will continue to process new business on its current annuity products until the transaction closes, the company also said in an email.

Voya anticipates closing the sale of its annuity business in the second or third quarter of 2018, subject to regulatory approval, the company said.

Write-Down of $2.4 Billion

Money raised from the sale of the company’s annuity business will go toward repurchasing shares, Voya executives said.

"As we begin 2018, we have a number of initiatives and priorities in place to make Voya a simpler, more valuable company that is well positioned for continued growth,” said chairman and CEO Rodney O. Martin Jr., in a news release.

Voya took a fourth quarter write-down of $2.4 billion to account for the sale.

The company reported a fourth-quarter 2017 net loss of $3.1 billion compared to a net loss of $417 million in the year-ago period.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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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 cyril.tuohy@innfeedback.com.