Voya Financial, Inc. Aktie

Good morning. Welcome to Voya's First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the call over to Mei Ni Chu, Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining today's call. We will begin with prepared remarks by Heather Lavallee, our Chief Executive Officer; and Mike Katz, our Chief Financial Officer. Following their prepared remarks, we will take your questions. Also joining the call are Jay Kaduson, CEO of Workplace Solutions; and Matt Toms, CEO of Investment Management.

As a reminder, materials for today's call are available on our website at investors.voya.com. As noted on Slide 2 of our analyst presentation, some of the comments during today's discussion may contain forward-looking statements and refer to certain non-GAAP financial measures within the meaning of federal securities law. GAAP reconciliations are available in our press release and financial supplement found on our Investor Relations website.

And now I will turn the call over to Heather.

Thank you, Mei Ni. Good morning, and thank you for joining us today. Let's turn to Slide 4. 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 commercial 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'd like to touch on a few highlights from the quarter.

In Retirement, we generated over $200 million in adjusted operating earnings, delivering trailing 12-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're 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-plus percent organic growth this year. We drove margin expansion by continuing to scale key strategies across insurance, private and alternative assets in 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 3 years and 82% outperforming over 10 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 is 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. Mike will provide additional detail in a moment. Our strong results this quarter reflects the durability of our cash generation, our strong earnings power and our continued commitment to disciplined execution.

With that, I'll turn it over to Mike to walk through the financials in more detail. Mike?

Thank you, Heather. Our 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 12-month basis, adjusted operating EPS totaled $9.11 per share representing a 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 noncash 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 7. 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 12 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 8. 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 12-month basis. Overall net revenues drove to the result, supported by higher Institutional and Retail fees. Our trailing margin of 28.6% and 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 remain 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 9. We continue to execute a deliberate strategy to expand margins which has meaningfully improved run rate earnings and 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 12 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've 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 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 and 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% plus 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've steadily grown dividends over the past 5 years, and at the same time, we've 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're 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'll turn it back to Heather.

Thanks, Mike. Turning to Slide 12. Looking ahead, our priorities are clear and compelling and are driving tangible financial results. We're growing excess cash generation while maintaining balance sheet strength and flexibility. We're advancing commercial momentum across Retirement and Investment Management, and we're 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 midsized employers who have lacked a clear path to workplace savings. These policy initiatives include coverage mandates, mandatory auto enrollment and protections for caregivers and nontraditional workers. These important measures will help address the overwhelming need for additional retirement savings, particularly among the most vulnerable segments of our workforce.

Voya 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 #1 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'll turn it over to the operator so we can take your questions.

[Operator Instructions] Our first question is from Bob Huang with Morgan Stanley.

My first question is actually on the Group Life business. Group Life loss ratio was very favorable, 70.6% versus a long-term target of 77% to 80%. It's been trending fairly favorable over the past 4 quarters and the industry does look like that's where things are going. Can you maybe talk -- give us a little bit more detail about what you're seeing there?

Generally, first quarter tends to be the worst quarter for the loss ratio for Group Life. Are we thinking that 77% to 80% maybe isn't where we're going to land this year? Can you maybe give us a little bit of color on that?

Bob, it's Mike. Yes, look, I think you're thinking about it right. And we do typically see Group Life is running a little higher than the 77% to 80%, Q1 usually is the worst mortality quarter for Group Life. So we're certainly very encouraged by what we're seeing in the quarter and has been a good trend for us. We're spending a lot of time. We talk a lot about Employee Benefits and the margin expansion there.

Group Life is another area we're focused on. I think it's a little early right now for us to suggest, hey, we think there's going to be 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 and third, fourth quarter.

Okay. Got it. Really, really helpful there. 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 the Investment Management, right, net flow was about -- net inflow is about $65 million for the quarter. If we're thinking about a positive flow, we're looking at probably $6 billion or $7 billion of net inflows in the rest of the year. Is that ballpark sound about right? Like can you maybe give us a little bit more color on how we think about the Investment Management flows going forward into the rest of the year?

Sure, Bob. Yes, this is Matt. I'll unpack that a little bit for you. So looking back, the trailing 12-month number is right in that ballpark that you referenced, that's a $7 billion number and that's a roughly 2% organic growth rate for the trailing 12 months.

So as you acknowledge, 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 actually 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's a channel that's demonstrated really nice growth over recent years, 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've 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, we've called out -- Mike called out in his remarks as well. That continues to be a stalwart for us, nice performance, first quarter. We think that continues for the year. Where there was some volatility in broader equity markets where we had market volatility was in thematic equities internationally.

We're already seeing with stronger markets in the second quarter, some bounce back there. We'll see where that ends. Obviously, a lot of dynamism in the broader markets. But broader strength in Retail, including U.S. fixed income makes us feel pretty good about the forward look. Bottom line, the organic growth expectation, the 2-plus percent for the remainder of the year remains intact.

Our next question is from Andrew Kligerman with TD Cowen.

With regard to the Group Stop Loss business, if I'm 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've attained that it's a pretty conservative loss pick, and perhaps we could see releases as we're seeing for the 24 and 25 years. Am I thinking about that right? Do I have the number for the loss pick, right?

Andrew, it's Mike. So just 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're thinking about it right from that perspective. And what gives us a lot of confidence around how the '26 business is really going to perform or some of the things I mentioned in my remarks, we -- 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 just strengthening the teams, ensuring we got the best risk selection and frankly, getting to do that with even more RFPs. RFPs continue to build in Stop Loss.

So we're getting a look at a lot of different things. So this is really the best we felt around Stop Loss in quite some time. We feel good about the '26 business. Stepping back, we're seeing improvement now. That's encouraging, but we think there's more to come.

Got it. And then it's pretty clear in the media we've been hearing about an activist. And the talk has been around their interest in you either divesting of Group Stop Loss and/or putting the company up for sale. So it's been out there. Hate to ask about it. But maybe you could comment a little bit about that.

Andrew, it's Heather. And I certainly appreciate the question. So we're regularly engaging with our shareholders. And at the end of the day, our actions and our -- and how we deploy capital are guided by what is in the best long-term interest of our shareholders, frankly, as well as our customers. And as part of our normal governance with our Board, we're constantly evaluating different strategic options that we can do, frankly, across the whole portfolio to drive shareholder value. But where we have aligned very, very clearly is that the path we laid out 18 months ago in terms of 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 '25 and again, are off to a great start. That's where we have full alignment and sole conviction. And maybe the last thing I'd say, Andrew, on this one is there is no daylight between the Board and management on the strategic path forward. And what we've laid out very clearly in the presentation and what you heard Mike and I talk about in our prepared remarks, we've got tremendous conviction in our ability to deliver on that and drive further shareholder value.

Our next question is from Ryan Krueger with KBW.

I guess I wanted to come back on Stop Loss. Last quarter, you said you expected calendar year improvement. The Stop Loss loss ratio, which was 84% last year. I think just mathematically, if I take your 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. So I guess maybe just, am I looking at that right? Are you still confident that you'll get calendar year improvement this year?

Ryan, it's Mike. Yes, that's the base case. And maybe just first, like when you think about claims experience and the emergence of the claims that we saw '24 into '25 or what we're seeing now from '25 to '26, claims are coming in faster. When we were in the fourth quarter, we were only 2/3 complete. Now as we look at the '25 business, we're 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, 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 just seeing where the reserves were set a year ago on the '24 business versus where we have '25 right now, it's a couple of points better. So that's what we're seeing. We're seeing that through April, frankly. If we continue to see that in May and June and in the third quarter, that's exactly what's going to happen.

Yes. And Ryan, it's Heather. The only add that I would have is, I quite honestly have not been this confident on Stop Loss for 18 months. And for all the reasons that Mike laid out, we've got 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.

And then this is slightly different, but also on Stop Loss a little bit. Just how intertwined is your Stop Loss business with the Voluntary and other Group products in Employee Benefits? In other words, as you've been pulling back on Stop Loss to reprice the business and improve profitability, like 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?

Ryan, it's Jay. I'll take this one. We see Stop Loss right now as another important risk transfer solution. It is rising in demand from our employers. And while we're not seeing Stop Loss and maybe 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 it as a door opener for new brokers who are entering the space as the demand is increasing, but it's also driving tighter alignment and value with the existing Employee Benefit broker relationships. Since I joined 16 months ago, we've been focused on the workplace strategy, structure and the people, and I couldn't 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're seeing today is a really tight flying formation with our leaders in risk, pricing, underwriting and distribution. And 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's having in our Employee Benefits business, Employee Benefits sales were up 8% year-over-year, with persistency remaining strong. In our Supplemental Health and Voluntary business where we continue to grow from a top 3 provider position, we're really pleased with the results to start '26. Our pipeline is up 10%. Sales are up 13% over prior year, and that's resulted in a block growth of 4%.

So overall, the positive commercial momentum we're emerging in Employee Benefits, and what we're seeing is this connection point on additional risk transfer and Stop Loss is deepening our relationships with our intermediaries and our customers.

And Ryan, if I can just add -- it's Heather. It's again -- maybe 3 additional points on Stop Loss and why it's so important is, first, we're seeing increasing demand from employers for Stop Loss. RFP volumes are up 200% year-over-year. And it just goes to -- there's a real need in the market for this, but there's also limited supply. And why that's so important is, if you think about that increased RFP activity, we can continue to be selective when we're doing our underwriting. But that limited supply also holds up on the hardening market and our ability to get pricing for this business.

Our next question is from Pablo Singzon with JPMorgan.

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's driving that? Or is it claim amounts just being larger and therefore, hitting retentions faster? I think one of the difficulty with Stop Loss is your excess position, but I was wondering if you're getting better line of sight into the claims even before the break retention levels.

Pablo, yes, I think it depends if you look at it from a reported or paid perspective. If you're looking from a pay perspective, absolutely. The operational effects matter, and we are turning through claims faster. We've got more people. Jay just talked about the talent we brought in, we're excited about that. It's really what we're trying to get at more is around the reported side. And what we're seeing from '24 to '25 and now again, '25 to '26, where the claims experience has come in faster. We've talked a lot about cell and gene therapies. We talked a lot about the severity of claims coming in. And frankly, some of the health care providers are trying to move that through the system because they're thinking about their P&L faster.

Stop Loss is a tail product. We would typically see that more on the later side. '24 to '25 was the first time we saw that. And so now -- and we were sitting here in the fourth quarter, only 2/3 complete with experience. We weren't sure if that was necessarily going to be a trend once again. So you're certainly going to want to be on the higher end of the best estimate range being put in that position. I think the good thing now that we're 90% through, we're seeing that again. We think this is the new normal coming out of COVID and so we're post-COVID. And so I think that's a good thing. Again, we're running a couple of points better when we look at it from a reported perspective, year-over-year, you can see that through the reserves and the disclosure. I think that has us feeling really good.

And again, April has us feeling really good. And this is as Heather was mentioning, it's a big part of the cash generation expansion story for us in '26 and beyond. So we're really looking forward to letting the experience speak for itself, and we expect it to in the balance of the year.

Yes. And my follow-up is also on Stop Loss, right? So taking a step back, I think if you just look at stat results, for example, the other insurers you compete within the market have historically reported loss ratios in the low 70s. You've run high 70s, low 80s, which is fine in a more normal environment and then you have the health insurers that run much higher. I was just wondering that just given the experience of the past couple of years, if you think that entails a change in your approach to pricing, just given the fact that maybe there's more volatility in this business more than you had previously appreciated, right? And maybe running at an 80% loss ratio is not the right level considering the volatility.

Pablo, look, I think you're thinking about it very similar that we do. I think maybe just the only caveat too is that sometimes when you're looking at other companies, they do have captive businesses that's different than more the fully insured Stop Loss. Sometimes that can conflate what you're looking at. But as far as just where's the end state on this, I think we're thinking about it exactly like you are.

Our next question is from Wilma Burdis with Raymond James.

From some of the health care insurers' 1Q '26 reporting, it sounds like medical trend is moderating somewhat still high. And of course it's 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're planning for this year.

Yes. Wilma, we're definitely seeing a bit of that. I think it's really early. I think it's a good sign. Yes, if you look peripherally at some of the health care companies out there, you're definitely seeing some of the turnaround there. That's very encouraging for us. It's really early, though, for us to just, in any way, declare that, that's going to come through results in a big way. But as we've been talking about, the fact that we got 24% on this '26 business, everything Jay talked about on the team, the risk selection we're getting, as Heather mentioned, the number of RFPs we're getting a look at. I think these are all very, very good signs around the trajectory of where this business is headed. And so we're encouraged by that, but we're going to let the results kind of play out, and that will illustrate the progress.

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

Yes. Wilma, let me start. And first, appreciate the support and as we think about it, we don't 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're seeing in Retirement. And I think Matt answered the commercial momentum question. But if not, we could certainly circle back to that. Jay?

Yes. Thanks, Wilma. I'll highlight a little bit what we're seeing in Retirement and Wealth. I think I talked just briefly about Employee Benefits and where we were seeing the growth. I'm happy to answer any follow-up questions on that. As it relates to Retirement, as I referenced last quarter, we expected strong flows in '26 with most of that growth back half weighted.

So as we've 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 '26, and that's going to result in positive net flows, not only in quarter 2 but for the full year. So our full year '26 outlook is unchanged. We're on track for a fifth consecutive year of positive organic DC net flows. Now it's worth noting our sales momentum remains solid across our key segments. So in large record keeping, our wins are scheduled to begin funding in Q2 and Q3. And 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.

So in addition to all that, I also look at planned retention and seeing that our planned retention was over 95%. And 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. So overall, in Retirement, I'm seeing really strong commercial momentum for the business in '26 and if I kind of translate that over to Wealth Management, where we're starting to see early days in the build, but I'm starting to see success.

So when I mean success is, I'm pleased with the team and they've achieved some meaningful growth year-over-year of 12%. That's both on a revenue and an asset view. In addition, we've seen real strong adviser productivity particularly, those that we've onboarded in '25 and '26 as we've been stepping up our recruitment of advisers. The step back here on the Wealth Management build is that it is embedded in the Retirement business's strong 39% margin. This is a really solid result.

Now our clients are increasingly asking for more advice and guidance at the workplace. We're really well positioned to fill this demand. And overall, I'm pleased with Wealth Management builds and the overall growth, particularly in the alignment with our Retirement business.

And Wilma, if I can just add one other perspective from the enterprise, if you kind of think about the collection of points have been made today about commercial momentum in Investment Management, the confidence we have in the Employee Benefits earnings outlook, the Retirement that Jay just talked about, all of those collectively give us the confidence in us further growing cash generation. Which is one of our #1 priorities and our commitment to returning that capital to shareholders.

Our next question is from Tom Gallagher with Evercore ISI.

Just a few follow-ups on Stop Loss. So Heather, if I listened to your comments about everything, including the activist and the way you're thinking about things, is it fair to say that you think Stop Loss is a core part of the long-term Voya franchise? Or is that something you would consider divesting if the situation was attractive enough?

Yes. So first, thanks for the question. What we have talked about is that we see the earnings improvement in Stop Loss as most immediate source of value creation for shareholders. Right? We've already made great progress with $100 million earnings improvement in '25 on a year-over-year basis and the $140 million earnings improvement on a trailing 12-month basis, if you just look at the first quarter.

So it is very valuable for us in terms of that earnings and the cash generation. Now if you think about it more broadly across the portfolio, what I would say is we see this as a real valuable part of our portfolio. And it goes to some of the points we've made earlier is, first, there's a lot of client demand, growing client demand, limited supply, hardening of the market and the ability to get the price. And we see this as continuing to be an earnings grower for the firm. So at the end of the day, Stop Loss is one where it's going to be value creation for shareholders as also -- as well as a strategic asset for Voya at the enterprise.

Got you. And then just based on your description of what you're seeing, it sounds like you're more constructive on where this business is headed. And I know you're approaching the '26 renewals and certainly '25 renewables is very cautious and more focused on risk selection. As you think about mid-year renewals, are you thinking about leaning into growth now? Or are we still at the part of your process where you need to further risk select and you may not grow yet?

Yes. Tom, I didn't want to jump in and cut you off, but the quick answer on that is no, we're not pivoting to growth. We continue with our focus on margin improvement and Stop Loss and being very disciplined with pricing. And frankly, we're focused on margin improvement across overall Employee Benefits. So right now, it's continued steady as she goes on that margin improvement plan and delivering on the earnings that we know we can deliver with this business.

Our next question is from Wes Carmichael with Wells Fargo.

A couple of follow-ups as well. So just one question on Stop Loss and loss trend. I'm just curious if there's any update on how that's tracking relative to your 24% rate increase and I know 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 have kind of doubled, maybe that was the last quarter or the quarter before. Just curious if you still have that view.

Wes, it's Mike. Yes. No. Look, I think, first off, we're pricing everything to get back to target. I think as you just alluded to at the end, as we stood here in the fourth quarter with 2/3 complete. There definitely was a wider range of outcomes. That has narrowed for the '25 block as we get into the first quarter now 90% complete. As I mentioned, we're running a couple of points better than where we were a year ago relative to the '24 business. That's a good sign.

And again, I think what we're seeing in April is a good sign. So if this continues, then we'll see some reserve release in 2025. And I think similarly, we feel well reserved on the '26 business given all the actions we've taken. So we're heads down on it. And as Heather was just referring to, we're going to take the same approach in the middle of the year. And just let the results speak for themselves, and we believe this is going to be a big part of that cash generation expansion story for the franchise at the Voya level that we've been talking about. We're the second year of the journey, and we like where we're at right now.

Got it. And just switching to Retirement during the quarter. It looks like there was some elevated outflows there. I know you spoke to the net inflows for 2Q and the full year, but just curious what you're seeing in terms of shock lapses from OneAmerica in the quarter and how long that should kind of continue.

I appreciate that question. On the OneAmerica integration, if you think about where we are, it's near complete.

We're really pleased with where the retention is landing. So I'd highlight that OneAmerica's retention is embedded into the comments around positive net flows in Q2 and for full year '26. So this transaction has enhanced our scale. It's also enhanced our distribution. And so when you look at the Retirement franchise, talked a little bit about distribution last quarter. We've onboarded the Edward Jones relationship fully engaged in this new distribution relationship.

And then maybe on a completion basis, the team is nearing completion of the final migration wave later this month, which is going to include approximately 3,000 plans. So I'm focused on the team's execution on this integration. The value we're giving for our customers and our intermediaries that we've onboarded through this integration has been really strong. And I think you're seeing the results of that. Really pleased with where we are overall in retention and OneAmerica is embedded in that.

Yes. And Wes, let me just -- I'll hit the finer point specific to OneAmerica, we had always expected to see higher surrenders than our normal book, the shock surrenders through the migration period, which ends the end of the second quarter of this year. So after that point is when we should certainly expect things to moderate, but you are seeing those in the first quarter.

Our next question is from Joel Hurwitz with Dowling & Partners.

Another one on Stop Loss. So Mike, you mentioned you're running a couple of points better on '25 at this point, but I think you might have pointed to the loss ratio on that. Can you just talk about paid trends or paid trends at this point running a couple of points better year-over-year?

Yes. Paid is actually maybe roughly 1 point better. It gets to the question earlier around just operational. Year-to-year, it's one of the things you always have to be careful with on paid. We have -- staffing levels are much higher in '25 than they were in prior year. And so that certainly is going to have effect on paid. So that's why I would point you to reported and why we're trying to anchor you to more of like, think of us about approximately 2 points better at this point in the journey.

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

Yes. I appreciate the question, Joel. I think what we're seeing right now is with the OneAmerica kind of planned surrenders that we've seen in outflows, we're still sitting at over 95% retention, which is a really strong number. I think you referenced back half, and I talked a little bit about where we see flows coming in. I talked about it being back half weighted last quarter, positive development. We're seeing some early funding in Q2, we'll be seeing positive flows. And so that's in the mix of business that sits today. I don't think you're going to see a materially different mix of business between full service and record keeping.

Now as a reminder, as we think through this business and providing advice and guidance in wealth management, those recordkeeping plans provide tremendous value to us as we're bringing advice and guidance. And those record -- those plan sponsors are looking for that advice and guidance. So there's value through the ecosystem in those record-keeping plants. But you should see a very similar mix as we complete through the year with a high retention rate. So pleased with where that is. And clearly, a fifth year consecutive of positive flows, you should see that through the end of the year.

Our next question is from Josh Shanker with Bank of America Securities.

Much of it has been answered. I just want to, I guess, one more Stop Loss question. Given that you're marking the new book at 87% combined with double-digit rate increases and 2% premium decline, I'm trying to just better understand the unit volume. And as Mike said, it's being booked for the hope that it's conservative, so it might later yield favorable development. How should I think about that 200, 300 basis point reduction in the benefit ratio against the backdrop of double-digit price increases?

Yes. Josh, I would just think of it as what Heather was talking about. We're just being really, really careful about what we led into our block. And that includes what already exists in our block and then new business that could potentially be in our block. So we're just being very, very careful with risk selection coming out of this health care cycle.

I think we understand that the relative value of a point of margin is meaningfully better than a point of growth. And so to the point around even in the middle of the year, it's the same philosophy. And so we just want to make sure the block is as clean as possible. We think that's the most productive and fastest way to the earnings expansion that we've been talking about and the progress in the second year of this 2-year journey.

Yes. And Josh, this is Heather. I would just reiterate that the kind of the parts and pieces, the 24% rate increase, the 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 the '26 year.

Is there any relationship between policy renewal persistency and the potential for adverse selection and you putting up such a conservative mark? I mean, with these amount of rate increases, presumably, the year-over-year improvement in the margin should be much, much better, but maybe you're sort of worried that you have a book of business that is at greater risk?

Not really, Josh. Like -- and we -- there's -- not to get too deep into this on an earnings call, but happy to get into it deeper with you afterwards. But we look at the block under just different risk dimensions. So there's parts of the block that are going to get rate increases much higher than 24%. And there's 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 books.

So think of the 24% as an aggregate, think of us just being very selective around what we like and what we think requires much, much higher rate increases. So it's the right question thinking about it in aggregate, but it's -- we really dive into this to make sure that, again, the block is as healthy as possible.

Our next question is from Suneet Kamath with Jefferies.

I wanted to go to Stop Loss again and 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? Or I guess, what's behind that?

Yes, Suneet, so if you think about it, as I mentioned, our Board, we're always looking at different options across all of our portfolios. We're laser-focused on the earnings improvement as the most immediate and value-accretive action that we can take for this book of business.

Okay. And then maybe just sticking with the Board, and I appreciate the comments about line of sight -- or alignment, excuse me -- between management and the Board and all the commercial momentum you've shown over the past couple of years, including the first quarter here. But if I look at the stock's PE, it's at a pretty significant discount to what I would consider to be your peers. That occurred or that has come despite the fact that you've exited some risky businesses like CBVA and Individual Life. And that was the case even before Stop Loss had issues. So I guess when you think about these conversations you're having with the Board, I mean, how do you explain that? And what's the path to try to get a better valuation here?

Yes, Suneet, it all comes down to execution, right? You go back and look at the priorities that we've laid out, our focus is on executing every quarter, every year and delivering that shareholder value. And what I would look to the proof points is, first, it starts with how we're delivering for our customers. And our customers are voting with their feet. You look at the commercial momentum, we're coming off 2 record years in Investment Management, strong margins, great investment performance and the confidence we have in continuing to drive that growth.

As Jay mentioned, 5 years of positive flows in Retirement and margins that are industry leading. We've got a lot of confidence in continuing to grow and the proof points that we've delivered already on the Employee Benefit improvement of $100 million earnings improvement in '25 and $140 million on a trailing 12-month basis. And I think the last thing I would kind of lead you with, Suneet, is that the collection of those businesses, I'm going to go back to our focus, which has been on continuing to drive growth in our free cash flow generation and then making sure we are returning that and deploying that into the most accretive opportunities, and that's in returning that capital to shareholders. So we think the collection of doing all of that, Suneet, is going to continue to further drive our share price and the value of the franchise.

Our next question is from Mike Ward with UBS.

I was just wondering, in Retirement, if you guys could give us an update on the inorganic pipeline potential?

Yes. Mike, thanks so much for your question. We've been active. We've been vocal on how pleased we are with OneAmerica, the integration and adding new clients in and delivering over a 30% return on that acquisition. So we're active. We're looking for Retirement roll-ups, but we don't see anything imminent, which goes to what Mike and I have been talking about of the cash that we generate, the excess cash. It's the expectation that we're going to deploy that into the highest value, and that's in buying the company we know, which is Voya through share repurchases.

Heather, and then on the Wealth business, you guys said revenues up 12%, I think. Just kind of wondering like how that is going so far and how much of that is driven by organic conversion versus markets? And just kind of overall, curious like how the reception is in terms of kind of turning on the advice switch.

Yes. And Mike, I'll let Jay cover it. But you're absolutely right. And our focus there is on the revenue growth. And that's kind of the metric that we're looking at for success. But it's been just 10 months since we stood up this office and we're really, really pleased with what we're seeing. So I'll turn it to Jay to elaborate.

Yes. If we look at the Wealth business and you look at where we have a right to win, I mean between the roughly 10 million customers we have through our Retirement business and equal that through our Employee Benefits and Benefitfocus 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. And so when you look at our business, we really are well positioned. When we service our customers the right way through Retirement and Employee Benefits, we build their trust. And that trust translates to the ability to bring that advice to the workplace.

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

And overall, there's more and more demand for digital self-service, which is a future component of our build. So I like where we're at. I also love the fact that, that build is sitting inside our 39% margin in our Retirement business. So overall, a really productive build for us in alignment with where our employers and plan sponsors are looking for on the advice and guidance.

Our next question is from Alex Scott with Barclays.

I do have one follow-up on Stop Loss, so apologies for that ahead of time. I just heard a comment that we're 2 years into a 2-year journey, and I thought that was interesting. I mean that sounds like next year, you'd be back at targeted margins. And I just want to understand if I'm hearing that correctly and the timing associated with that kind of comment. And maybe if you could help us understand like how we get there. Because even if we give you the benefit of the doubt on some of the reserve development, it still seems like we're a decent amount above where you'd be targeting right now. So yes, I mean, do I have that right? And anything you can tell us about the IBNR or something you're seeing to help us put numbers behind your optimism?

Yes, Alex, thanks for the question. I'll start with the thematics and then toss it over to Mike. So you're absolutely right. When all of this started coming out of COVID, and we saw the impact on the broader industry, we've always said we expect this to be a 2-year journey and not something that was done in 1 year. We really, really like the progress. And as Mike mentioned, we're pricing the business to be back within the target loss ratio. So that is certainly the goal we have laid out, and we're going to see how things progress through the year, but we've got confident in seeing that improvement.

Okay. Follow-up question is just related to couple of peers engaged in a merger of equals. I know both of them, I think, were much smaller peers in terms of their Group Retirement businesses specifically, but it does sort of indicate an increasing importance on scale. And just thought I'd get your take on where Voya is situated relative to that competitive positioning. And as a result of some of the peers scaling up, do you see any more fee compression in the competitive environment? Are you expecting to see that?

Yes. First, Alex, frankly, I really love the question because it gives me an opportunity to highlight how our businesses are firing on all cylinders and really the scale that we have across. So if you think about, as I hit on some of these things earlier, retirement, we're a top 5 provider in the space. The acquisition that we did last year with OneAmerica now serving close to 10 million participants. We would not be a scaled provider if we could not operate at a 39% margin for 10 years. So Retirement, really, really like our position. The expansion into wealth management is absolutely the right strategy where we're building on a core foundation. In Investment Management, you think about the 2 years of outpacing the industry in terms of organic growth, delivering strong investment performance.

Our fees are holding up really well. We're improving margins. So all of those to me are signs of scale. And I go back to it's really about the client demand in the market and the fact that we are winning and we are retaining the business and we're delivering for them. Even in Employee Benefits, right? We're still -- you're still seeing sales growth in the core business while we're on this margin improvement plan across.

So we frankly really like our position in the market. And maybe I'd close with it is also buoyed and strengthened by a solid balance sheet, right? We're one where we don't have a lot of noise in our balance sheet. We generate a lot of free cash flow, and we've got scale where we play.

We 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.

[Audio Gap] the Institutional Investors Conference. I'm here with Voya's CEO, Heather Lavallee; and CFO, Mike Katz. And with that, I'll turn it over for their presentation.

Okay. Good morning, everyone, and thank you, Wilma. I'm going to begin by highlighting what makes Voya such an attractive investment opportunity. And it starts with our complementary businesses, where we operate at scale, which is durable, and we've got a leadership position in the workplace businesses. Now the collection of these businesses generate high return on equity, high free cash flow, and that's important because it allows us to continue to invest in our businesses, deliver for the customers while returning meaningful capital to our shareholders.

I'm going to turn and talk a little bit about our business mix. Simply put, our businesses serve our customers at every stage of life. We offer financial solutions that help from the brand-new employee who is enrolling in their retirement plan for the first time or the employee benefit offerings all the way through to retirement, where people are enjoying the retirement savings to and through and every stage in between. And our retirement business is at the center of the workplace, which is where we operate. And it's complemented by an asset management and an employee benefit business that offers financial solutions to help ensure our customers can secure a financial future as well as protecting against an unforeseen event in life.

If I start with retirement, we are an at-scale retirement provider, we are top 5 in the industry, and we have generated industry-leading margins for over a decade. We have meaningfully grown this business in the last couple of years. In 2025 alone, we added nearly $100 billion in assets. We did that both organically and inorganically. And in the last 2 years, we've grown our participant account base by 40%, and we now serve nearly 10 million participant accounts to and through retirement.

In our Employee Benefit business, simply put, we help employers to be able to manage their overall benefits programs. Benefits have gotten quite complicated. And if we think about what we do for the customer, it's helping the employees and their families protect against unforeseen medical events. In employee benefits, we hold a #3 position in supplemental health and a #3 position in medical stop loss.

And finally, if I turn to investment management. We have breadth and depth in this business. We operate both in the U.S. and internationally in both retail and institutional. And we have meaningfully increased margins while outpacing our peers in terms of organic growth. Now what sets us apart is the financial performance. Return on equity of close to 19%, which has been driven by the strong earnings from our retirement and our investment management businesses and the high margins they generate. In addition to that is the fast-growing wealth management business we have inside retirement. It's also been driven by the margin improvement in employee benefits, and Mike will talk a little bit more about that.

On the right-hand side, our free cash flow is really second to none. 2025 was a great example of this, where we generated 90% free cash flow on after-tax earnings. And if you look back at our track record over the last decade, on average, we have generated a 90% free cash flow over that entire time. And why that's so important is it has allowed us to continue to invest in our businesses do smart accretive acquisitions while continuing to return meaningful amounts of capital to our shareholders. And as we think about 2026 and beyond our focus is on continuing to grow cash generation, deliver for our customers and increase value for our shareholders. Mike?

Heather, when I think about companies with strong balance sheets, and strong businesses, it really reveals itself in how they're deploying capital. And when you look at our track record, both across dividends and share repurchases, we have that. We've been able to increase the dividend each year. You look at 2025, we generated $775 million of excess capital, $775 million, that's a testament of the businesses that we're in. And frankly, when we think about our conviction on dividends, it's because the durability of that free cash flow generation prospectively persists.

From a share repurchase perspective, we view this as an important part of the value proposition in Voya. We look at the first half of 2026, and we've already signaled to the market, expect $300 million of share repurchases in the first half, so nearly $400 million of capital deployment back to shareholders in the first half of the year. The other good thing about this is that as we're buying back shares, it positions us to increase the dividend while maintaining the nominal amount that we're returning through dividends each and every year. So if you look at 2026, we're going to be buying back shares. And later this year, we're going to be increasing our dividend.

If you go to the next slide, and we look at this balance sheet, from an RBC perspective, very strong, well above our target range. When you look at the amount of excess capital that we have heading into 2026, we feel really good about that. And then leverage, right in the middle of our 25% to 30% range. We had over $1 billion of pretax adjusted operating earnings in 2025. Leverage was exactly the same. We did not use leverage to increase earnings frankly exactly the same. We grew earnings over $150 million on the back of the businesses that are growing and delivering so much commercial momentum.

In the middle, when you look at the way we're investing our general account, and by the way, we've got a group of investment professionals that not only do this for Voya, they do this for 70 other insurance companies. And so we feel very well positioned. We know it's volatile out there, but we've come into 2026 in a position of strength, very well diversified. When you think about what we're investing in, very much investment grade. And then the other part about the general account, it's an important part of the value proposition at Voya, because it unlock synergistic value between Investment Management and our Retirement and Employee Benefits business, the Investment Management business earns a fee for managing the general account.

And it's also an important part of the commercial momentum because we're showing what we can do. We're eating our own cooking in our own general account, that's been part of the value that we've been able to deliver to those over 70 insurance companies. Part of the big organic growth we delivered almost $15 billion, $15 billion of organic flows in 2025 in Investment Management. And then it also delivers that durable spread income, primarily in retirement, but also our employee benefit business.

And then finally, on the next slide, when we look at the value prop, we're at Raymond James, obviously, we want to share the investment proposition with all of you. But as I just mentioned and Heather signaled as well, like we're doing the same thing. Like we know Voya better than anybody. We see the valuation opportunity, and we're leaning into it. We're not just asking you to. And you can look across these 3 pieces here, but really at the end of the day, we've got our near-term priorities really moving with pace. We talked about commercial momentum in our businesses, investment management, retirement, Heather talked about that. And we've also talked about the OneAmerica transaction, we bolted on a small retirement company at 30%-plus returns. We've integrated the majority of that in 2025, realizing what we said we'd realized.

And then finally, in employee benefits, which we know there's a lot of questions around that, that we've been getting from investors. We delivered over $100 million earnings improvement in 2025. It's a part of the value proposition as we move forward. And frankly, when we think about the story on Voya, all those questions in the past have driven this valuation discount. We believe the story has moved. EB did not get in the way of an incredible 2025 and the actions we took in 2025 positions us to be able to say the same in 2026. Heather?

Thanks, Mike. And before we open it up for questions, I'll close by just reiterating that we see meaningful near-term catalysts to improve our multiple expansion in our business. It starts with the commercial results we drove in Retirement and Investment Management, where we now serve $1 trillion in combined assets between both of those businesses. Mike mentioned, record flows in both businesses in '25, which creates a catalyst, and then I talked about our expansion in wealth management.

Second is the continued improvement of margins and employee benefits. And finally, it is our shareholder-friendly approach to capital deployment. As Mike mentioned, we are going to continue to deploy capital into the most accretive opportunities and so we believe that our value proposition is clear and Voya is a compelling and attractive investment opportunity. Thank you.

Thank you for the great presentation. Just going to move to a little bit of Q&A here.

First, we'll start with Voya's strong cash flow generation, which has been very impressive. What drove strong results in 2025? And what are the key contributors in 2026?

Mike?

Yes, sure. And it's really an outcome of what I was talking about just a moment ago. We have clear near-term priorities around commercial momentum, organic growth, the acquisition that we did at OneAmerican and then finally the EB piece. So we look at the organic growth in retirement, over $20 billion of flows plus the $60 billion that we brought in from OneAmerica, Investment Management, I just mentioned nearly $15 billion of organic flows in IM, different than I think a lot of other companies out there. We made a lot of progress in integrating OneAmerica. We talked about $75 million of earnings from that transaction. We're exceeding that target.

And then finally, as I mentioned with EB, that margin improvement story. And we grew earnings in 2025 over $100 million. And that's not the end of the story there. We see margin expansion in '26 and beyond. And so we continue to make progress. That's going to be part of the value proposition in '26. And that $775 million that Heather and I talked about, we expect that to be higher this year and for the years to come.

Yes. And the only thing I would add is we've always had an approach of being really disciplined with expenses, which gives us the opportunity to reinvest into the highest opportunities within the business.

Great. And could you talk a little bit about what makes the industries you operate in appealing?

Yes. So if you think about the businesses we're in. So first, in the retirement business, we're going to have roughly 100 million millennial and Gen Z workers in the workforce. And it's going to be one of the largest wealth transfers, $84 trillion of assets that are going to transfer to the next generation. So we see that as incredibly attractive. The other piece of it is that if you just think about the retirement and then the overall benefit landscape, it's gotten complicated. And if you think about the U.S. worker, they've got to make close to 20 different decisions every year in their benefits. And that's difficult for people. I think about my adult kids that are enrolling in their benefits and they call mom and say, I'm not sure what I should do.

So being able to offer guidance and benefits of the workplace, which is where most employees are looking for trusted advice is key. We love that. And then finally, in Investment Management, we continue to see a traction for the U.S. dollar-denominated funds in Asia, and continued growth of not only accumulation vehicles, but income-generating vehicles and retirement.

And could you talk a little bit more about why Voya is competitive in these industries?

Yes. So I mentioned a little bit, again, I start with retirement. You have to be a scaled provider in this business. And why that's so important is it allows us to continue to invest in capabilities, digital, cybersecurity to be able to deliver for customers but operate at industry-leading margins. Otherwise, you just -- you can't have both together. So that's number one. We've got an incredible brand, we're well-known, great distribution, same in employee benefits. We are viewed in the market as a workplace company. We're not just a wealth manager who happens to do workplace along the side, this is our core business, and that is important in -- within the markets that we serve.

And then finally, I think about Investment Management and it goes to something Mike mentioned, as an insurance-owned asset manager that manages their own general account, the fact that we can take that to 80 different insurance clients that we serve, we think about the breadth and depth, the strong investment performance. We've got a reputation and we've delivered for our customers across all 3 businesses.

How are your businesses working together to serve your customers?

Yes. So this is one, and we love the collection of the businesses. And so if I think about it, first, for employees. Today, employees need advice and guidance. And more and more, there's an interesting trend in the workplace where 5, 7 years ago, employers would say, I just want you to be my retirement provider, and I don't want you to offer retail planning and other solutions. Today, they're asking for those services. So the fact that we've got 10 million participants in retirement, we've got close to another 10 million through employee benefits. We're able to leverage that access to the workplace and bring broader advice and planning into the employees. So broader advice and planning, so really, really complementary.

We're also able to take the proprietary solutions, we manufacture in our investment management business directly into our clients. And then as Mike mentioned, we talked about managing our own general account. That is an incredible asset for us to be able to take that, drive yield and returns for institutional clients at the same time, driving strong earnings growth for Voya.

And could you talk a little bit about your strategy to drive medium-term growth?

Sure. As we think about it, I'll hit each of the businesses quickly. In retirement, it's about continuing to grow organically. Mike mentioned over $20 billion of flows last year was actually $28 billion of organic flows. We also want to be opportunistic about doing additional bolt-ons like we did with OneAmerica. Right now, we've got a really high bar for that just given where we trade in the market, but we see that as an attractive opportunity. And then finally, it's the build-out, the thoughtful build-out, we'll do -- we're doing of our wealth management business. In employee benefits, it's all about continued margin expansion. And then finally, Investment Management, it's continuing to leverage the growth that we've done within the insurance channel, privates and alternatives as well as global expansion. Our clients are really looking for income solutions.

And organically, just to build on Heather's point, like we do see continued consolidation in the retirement space, and we see us as a company that can participate in that. We are going to be looking for returns well north of 20%, factoring in how we see the execution risk of a particular opportunity. And part of it is just, Heather, as we've talked about just a moment ago that we -- there's a retirement company, a workplace company, we know better than anybody in Voya. And so buying back shares, the bar is very, very high right now.

Why we talked about $300 million of share repurchases in the first half is because we don't see anything imminent in the near term that would take us off course of returning capital through that dimension. But the other thing that's important too, and something that Heather and I take really seriously is that we believe that it's important for us to continue to be in the market buying back shares. You should expect that for the foreseeable future. But we can do that and still participate in retirement opportunities.

We structured a deal where there was a small upfront with an earnout. Those are the kind of things that we're going to do that if we see a really good opportunity and we want to be able to both take advantage of that opportunity, but continue to take advantage of valuations, we're going to find a way to do both. That's really, really important to us. And we feel like we've got the strategic flexibility based on where the balance sheet right now is to take advantage of that.

How do you approach wealth management to retain assets as boomers approach retirement?

Yes. So with Wealth Management, I think what's first important to notice or to mention is that we already have established wealth management business inside retirement. Today, it has generated $200 million of revenues in '25 which is roughly 10% of our broader retirement business. So we're building from a strong foundation. But what we realized was we frankly did not have enough advisers to be able to serve those clients. And we weren't getting to all of the inbound calls of people who wanted to roll over into an IRA or consolidate assets.

So the first thing we've done is we've expanded our phone channel reps. Ultimately, we want to get to, say, 500 to 700 advisers over a period of time gradually. We probably sit at about 200 today. We've got about 450 field-based advisers that have for probably 30 years supported our tax-exempt clients very holistically. So helping them make decisions around should I roll money in? Do I need to have an annuity? Should I roll money over? So that's a key component is adviser expansion. We're also investing modestly in building out digital self-service. And while we're attracted to baby boomers, our real focus is on serving millennials and Gen Zs because most Americans do not have access to a financial adviser.

And we're not going after high net worth individual. We're going after the average American that we are serving today in our workplace businesses who need these solutions and are looking to their employer and be able to have digital solutions to be able to address those needs. So that's really how we think about it. And then maybe the final bit is we also have proprietary products that we sell through third-party distribution. And that's been an important component as well. Think about that as more of a mutual fund IRA products. We've had a real track record of delivering value for clients in that space as well.

And Heather, I think one of the challenges is the CFO is investing, investing in fact, you know revenue growth is so critical. I think one of the things that we have a privilege at Voya is that key investments like wealth management, which we see as an important part of expanding the retirement revenue growth over time is that we're able to self-fund the majority of these investments. So at the same time, we're making the critical investments in technology, growing our adviser base. We're also finding the efficiencies within the company so that it's not taking us off course in what we talked about earlier on growing excess capital, which leads to the strategic flexibility, which leads to the value proposition we talked about a moment ago. So just to be clear, like we're able to do this while still delivering on the financial goals that we have.

Yes. And maybe one other bit, and then we'll move back to you on the wealth management. One of the reasons we think it's so attractive is this is fee-based business, capital-light, it's fast growing. And again, you think about the modest returns, we don't have to really overstretch what we think is possible to have a meaningful impact in what we're driving. So when we think about this, think about double-digit revenue and earnings growth at the same high margins we've generated in retirement. So we think really accretive and over time can help drive that multiple expansion.

And can you maybe talk a little bit about any tech advantages or AI and how you can use that in the retirement segment. Just talk about -- is that something you could see helping the margin going forward?

Yes. So first on tech advantages, one of the things that is not always fully understood is our retirement platform is built on a technology called Omni. And what makes it unique. There are some providers who will say, we have a proprietary record-keeping platform. Well, we don't need to have a proprietary record-keeping platform because we work with the largest in the industry, but we also -- we own the source code. We actually have more omni developers than FIS that owns Omni. So it is an important leverage point for us where -- when there are certain things that are coming in as regular updates, we leverage those from Omni, and then when there are other things that we want to do our own specific code to meet client needs, we can do that. So that's actually been a competitive advantage for us.

The second thing I'd mention is we have a global capability center in India. And this is not about labor arbitrage. This is actually where a lot of our technology advancements come from. So this kind of goes to the point Wilma, it's been an important leverage point for us to be able to maintain those high margins I talked about in retirement for a decade. So that has set us up well to be able to lean in on AI. We were one of -- we were the first actually retirement provider with a transactional mobile app capability close to a decade ago. We have had behavioral finance Institute, which helps people make smart decisions around the retirement and where to allocate those dollars.

And so when we think about AI, we're going to be leaning in on things that drive easier RFP processing, things around claims, things around the way we're driving operational efficiency. So we do think this is going to be an important leverage point for us to continue to deliver a better experience for our customers while driving efficiency. Call center is another great example. We've had chat for a number of years. It's very natural to be able to move into natural language conversation with our clients to give that first call of resolution in a very efficient manner.

And you're not going to hear from us like, oh, here's this big cost takeout because AI that you're not going to hear that. We're really focused on is the education and the adoption within our disciplines in our company. So while we monitor at the top, we think it's really important that the individuals within each particular function understand the new capability. It's moving really fast. We're training our folks in a very tailored way. So the folks in the finance organization are getting trained differently than the folks in the sales organization. They are getting different training in the underwriting side because they understand what they're trying to do every day. right? There's not a one solution fits all here. They understand the data that's necessary to understand what the customer needs that they're trying to serve.

And so we're really trying to enable our people to be able to understand how they can take advantage of it and then fund it. But to the point earlier around whether it's wealth management or other key areas that we want to invest in, we think, from a productivity and an efficiency perspective, that this is going to be one of the tools that's going to allow us to continue to invest for growth as we maintain strong margins in retirement, in investment management and then that expansion in EB.

Great. And could you talk a little about some of the biggest opportunities in the Employee Benefits segment as well?

Yes. So one of the important opportunities right now, we have launched leave management capability January 1 of this year. And why that's so important is administering and managing employee leaves is incredibly complicated for employers. You've got federal leave, if you got state leave, you've got paid, you've got unpaid and being able to have a capability that creates a very easy interface for employees through the digital as well as proper reporting for employers is very important. And why we did that is because more and more the insurance provider that wins the leave is winning the bundle. They're winning the life, the disability and the supplemental health. So that's incredibly important.

And as a #3 provider in supplemental health, we want to both that position, but continue to accelerate it. And then the second I'd mention is just high cost of health care. This is something we're all facing, right? We saw a rebound in the cost and utilization coming out of COVID, employers are struggling to figure out how do they absorb the high dollar medical expenses and their overall benefit program. And so having medical stop loss, which is essentially a reinsurance layer for those employers that are self-insuring their medical is an important lever for them to help them control costs. At the end of the day, it's about serving employees, it's about providing the right benefit offering and about retaining and attracting those workers.

Can you touch on where you're different in the investment management?

And I can start here. Look, I think one of the things -- because we'll get questions around -- as you all know, I mean you're in this business that it shifts, right? What's in demand and what's not in demand, year in, year out. We don't -- we're not concentrated in any way in where we play. Like we play internationally, Heather mentioned the distribution we have of our income and growth products in Asia. Domestically, we have that both from an institutional and a retail perspective. And so very broad-based in where we play. We're not overly susceptible if something comes in or out of favor.

Investment performance has been phenomenal. I think that's really been key. We have heritage in fixed income. It's part of the reason why we do so much for other insurance companies. So this is -- we've got a track record, Wilma, of really delivering strong organic growth. And when we look at '26, we see the setup being just as strong. Our target is 2% plus organic growth. So that's no macro at all. We expect to grow organically 2% year in, year out. And we don't see anything at this point, even with a difficult backdrop right now, taking us off course and been able to do that.

Yes. And the only thing I would add is that as we think about the wealth build-out bringing proprietary solutions into that channel is important. We launched active ETFs in the fall. We'll continue to expand that, but we're also going to be able to launch model portfolios that our advisers can take to our clients. So it just kind of goes back to that complementary nature of the business.

Great. And could you talk about what you think is most underappreciated about your company or in stock?

Yes. I think what's most underappreciated about the company is a track record we have with this 90% cash flow generation, growing the cash generation, the consistency that we have delivered on returns. We've navigated through different environments. But I think what's underappreciated is the leadership positions we have, the discipline in terms of how we manage that and how we're going to continue to make decisions that are in the best interest of shareholders and growing that value in our belief, we should be a $12 billion market cap company, trading at 12x, not where we are today. And I think underappreciating the fee-based businesses we have, particularly growing and what we've been able to generate in retirement and investment management, which is roughly 85% of the firm are underappreciated in my opinion.

And Heather may, if you went back to the slide on valuation just briefly if you still have the clicker. But I think we get compared to insurance companies, right? And obviously, I think valuations have been depressed there. And I think in some ways, that's fair, right? We -- employee benefits, the benefit business is an insurance business, but it's short tail liabilities. These are not long-tail liabilities. These are not guarantees that sit on your balance sheet for years and decades. These are short-term liabilities that we repriced every single year. Investment management is certainly not an insurance business in retirement has elements with the general account, but we talked about the synergistic values there.

And so part of the reason why we're comparing versus Russell here. I think we think that's a -- it makes more sense in the small mid category and part of the reason we're here at this conference because look, there's -- it's inertia is a powerful thing. We have had -- we have been an insurance company in the past. We had a life insurance business. We had a big variable annuity business back in the early days of Voya. And those businesses we've divested, and what's left has been done in a tailored way in a way that really works in a synergistic way in the workplace, but really is not insurance in the way that I think most people think about it. And I think that's part of the reason, Wilma why where we're trading is probably not fair again. We think it's yesterday's story, and we're pretty excited to tell today.

Well, and if I can close with just some key stats and you think about what we delivered in 2025, record commercial results in Investment Management, $15 billion of flows, $28 billion of flows in Retirement, $60 billion of additional assets in an acquisition with a 30% IRR, over $1 billion in pretax earnings, 20% EPS growth, significant cash generation, right? I think those are incredible stats. We've got confidence in our ability to deliver going forward, which is why we've made the commitments on the share repurchase, why we've expanded the dividend and we're confident in our leadership team and our ability to continue to grow and deliver for shareholders.

Great close. Thank you very much, everyone. Appreciate it.

Thank you Wilma.

Thank you.

All right. Thank you, everyone, for being here with us. I am Michael Ward, North American Life Insurance analyst at UBS. Very happy to have Voya with us today. We have Heather Lavallee and Mike Katz, CEO and CFO, and we're very excited to be here today. So we'll get right to it. I figured, Heather and Mike, we could start with some key messages after the 4Q into '26.

Yes, I'll start. And I think the first is that we had an exceptional year in '25. You look at what we achieved from significant growth in cash generation, $775 million, significantly up from the prior year. You look at the record commercial results that we drove in our retirement and our investment management businesses, where we now sit at a combined $1 trillion of assets between those two businesses. We had record earnings growth in our retirement business, and we made a significant improvement in our employee benefits margin. And so that carries a lot of momentum for us.

As we think about -- second major point is we see a significant opportunity to grow our cash generation into 2026. So that momentum that we delivered in '25 will carry us into 2026, really fueled by the commercial growth in Retirement and Investment Management and the ongoing improvement in margins in Employee Benefits. The third main point I'd highlight is the fact that we have a really strong balance sheet and highly cash-generative businesses. And that gives us a lot of flexibility as we think about how to deploy that capital into '26.

Mike and I have talked about on our call and in follow-on meetings that we are deploying more capital towards share repurchases in the first half of the year. We've talked about $300 million in the first half kind of equally split between first and second quarter. But that does not prevent an opportunity for us to be able to do a retirement roll-up.

We've been very clear on our focus of consistent cash generation and return back to shareholders while still creating optionality for us if we see another opportunity like OneAmerica, which we were really pleased with how we delivered. So I think I'd wrap with we've got a really clear and compelling value proposition for investors, complementary businesses, highly cash generative and a really strong balance sheet as an organization.

Great. And I forgot to mention anyone on the line, you can submit questions virtually, and we can take them towards the end and of course, anyone in the room as well. But thank you, guys.

So I figured we could start with the core retirement business, strong commercial momentum, record net flows. I thought we could dive into your strength there in '25 and what you're seeing into '26.

Sure. Yes. As you think about our retirement business, again, our largest business, we've overachieved on the margin targets for the last couple of years. So last year, we delivered close to 40% margin, which is above the 35% to 39% guide. As you mentioned, Mike, we had record organic growth, $28 billion in flows, and then we added the $60 billion of OneAmerica flows on top of that. So you just think about that growth of close to $90 billion of assets. We added close to 2 [ billion ] participants. We're sitting close to 10 million participants. And so we just think this is a business for us where we've got a lot of scale. We've got a lot of commercial momentum.

Our retention level remains really strong. And as we think about the investments we're making in wealth management, that allows us to both fortify but continue to be able to grow the business and serve our clients much more holistically as we continue to scale and grow that business.

Yes. We -- you're not going to hear from us talking about big expense takeout programs. It's not really what we had planned. What we have planned is just consistent discipline around how we run the franchise. And retirement being the biggest business, obviously, we see opportunity there. And to Heather's point, I mean, it's why we're seeing margins above our target range. I mean, certainly, a lot of success around the OneAmerica transaction. We're moving into year two. So that piece is going to give us the ability to get into even more integration and opportunities. So that allows us, to Heather's point, to both invest for growth at the same time, we're maintaining strong margins and growing earnings.

Maybe just on OneAmerica. I think that was a pretty solid deal and a tremendous add for you guys. Just kind of wondering any key learnings so far? I do wonder if we could go into maybe the potential for other assets out there that might exist similar to OneAmerica, but maybe we could dig into that deal a little bit.

Yes. I'll start and Mike can certainly add. So if you think about OneAmerica, we had set out targets of $200 million of revenue growth, $75 million of earnings, about 90% plan retention. And we have significantly exceeded the revenue and earnings targets we set. But I think even broader than that, so we achieved financially, we did -- the team did an excellent job with the integration. So we are at the point right now where we've done two of the four integrations completed. The retention is incredibly strong from those. We've got clients that are really pleased with the additional capabilities that we've added to -- for them, just being an at-scale retirement provider. But we've also added new capabilities for clients, the ESOP plan. We've added distribution through the Edward Jones relationship.

And so this is something that not only had over 30% unlevered returns for shareholders, but it really positioned us in the market to be viewed as a net consolidator and a firm that is going to be growing in the space. And so that's something that has resonated with clients and advisers. And I think as we look at opportunities for more on OneAmericas, we're certainly active in the market. We see that if you think about the industry as a whole, it is in secular consolidation, right?

There are roughly 60 different retirement providers and the top 10 control 80% of the assets. And we squarely sit as a top 5 provider. So we are truly a grower consolidator. And those bottom 20, it's going to be very hard to continue to compete. So we do see opportunities. Maybe the final thing I'd mention is that we do have a very high bar for M&A, right? Obviously, OneAmerica was really a terrific acquisition for us. We want to make sure we're disciplined and you can never necessarily control timing. So we're active. We're going to be disciplined, and we're going to look for more opportunities to do further roll-ups.

I mean, Heather, you hit it all, right? I mean the only thing I'd be doing right now is just reinforcing it. I mean, tremendous returns out of this opportunity for us. And I get excited because we're into year two on this. So there's going to be more things that get unpacked by the teams as they have the opportunity to further optimize the asset. And then, Heather, to your point, like we're going to be incredibly disciplined, right? We -- the returns on that particular transaction well above our return on equity. So this is one we felt like looking at the execution risk around this relative to the return made a ton of sense. To Heather's point, there's going to be more opportunity, but what you should expect from us is we're going to be incredibly disciplined about it.

And so when we talked about and Heather just mentioned earlier, the $150 million of return of capital through share repurchases quarter 1, we do it again in quarter 2 is because we don't see anything imminent right now. But that doesn't mean that there won't be opportunities as we move forward throughout the year, especially when there's a lot of volatility in the markets, that tends to shake out some of these opportunities. But we can also participate in those bolt-ons and still return capital at the same time. So that gives us a lot of flexibility.

We feel like we have a lot of flexibility coming into the second half of the year. And frankly, we have the earn-out already set aside. So when we come out of the end of the year with approximately $400 million of excess capital, that includes the earn-out that we expect to pay later this year.

One of the things I'm kind of wondering is, so record keeping is consolidating. There's some competitors that are more actively trying to consolidate, but there's not a ton, right? So I'm just curious, how that competition has developed for these targets?

Yes. I think there are some that are really just looking for a large-scale acquisition, right? We've seen a number of those over the past 4 or 5 years where they're sizable. So I do tend to think that the very large want to do something that is of a significant takeout. I think for us, we're more uniquely positioned to pursue the bolt-ons because if I go back to OneAmerica, one of the reasons why we were the -- we were the one who kind of were victorious in being selected for that is we had a good relationship with OneAmerica.

And they wanted to have a really good home for their clients and for their employees. And so the culture matters. So that's something where when we go through these and we treat people well, we executed really well on the technology migrations, positions us well to be able to do more of those. And so I just think there's going to be different types of buyers in the space. And it's one where people are going to, I think, continue to be disciplined around it. But I just think that you've got some focus on the large end and not as many that are going to be focused in on the spot where we're pursuing.

Okay. So maybe on the next sort of stage of the retirement phase, but wealth, I think, is an exciting area of focus for the industry, specifically for you guys. Wondering if you could maybe give a quick rundown size and scope of your wealth business today.

Sure. Maybe I'll start and then maybe Mike can hit on the investments and the returns. So first, one of the things we want to be very clear on is our wealth management business is an established business. So we talked about on the call, $200 million of existing revenues that are coming from retirement. You think about that as roughly 10% of that business. And so we're not building from greenfield. And I think that's a really important point. As you think about where we're growing and why we think we're uniquely positioned, when we talk about 10 million participants in retirement, 20 million across the workplace, these clients are looking for support, advice and guidance from us.

So we've got a bit of a captive audience. And what has been a limiter is just the number of advisers being able to scale and reach to serve those clients. So for us, making thoughtful investments to grow our field and phone-based advisers is going to allow us to serve those clients in a broader way. And again, they're looking for us to do this. We also don't have distribution and acquisition costs the way some other wealth managers do where they've got to go out and really try to generate the leads. We have this existing population for us. And maybe the last bit, and I'll toss it over to Mike, is we're being incredibly thoughtful as we think about the investments, how do we fund those and what we expect to get from returns from this business.

Yes. And to that last point that Heather referenced, we view this as a business that's going to be at or better than the margins we report in retirement over time, right? Obviously, there's going to be a bit of a J-curve as we invest this year. But as we were talking about earlier, I think a lot of people asked us a number of questions around how much we were investing in third quarter. We were very transparent around that. But what we didn't get as deep into was, look, we were right in the middle of planning and the teams were thinking about, okay, how do we self-fund as much of this as possible.

And that's the work that really happened over the course of the fourth quarter. And so that's the mindset we have coming into this year is that while we're investing within this wealth management business, we see 20% plus returns out of this. We feel very good about where we're investing both from a technology, very targeted. And then as we're adding advisers, making sure that we do that with an eye towards the productivity gains that we expect to get with every adviser that we bring in or existing -- or have from an existing perspective, we feel good about that.

And we have a lot of flexibility on how fast we hit the gas or if we want to hit the brakes a little bit throughout the year. But it's a tremendous opportunity for us. That's why we're leaning into it. And we see it as one of the key reasons why the retirement business goes from more low single-digit revenue growth type of business to more mid-single digit over time. That's why we're making the investments along with the customer reasons that Heather just called out.

And I feel like one sort of distinction that I think is important as we think about this for Voya, but wealth management is a broad term, right? And UBS is a significant one, right? That caters to a specific set of clients, whereas having that -- the foot in the door on the retirement side, the average sort of 401(k) customer that might literally not know what to do with their retirement savings once they retire, there's real value in just being there, I think, I'm not sort of pitching your product, but having someone on the phone able to say, well, you could consider this or this, right? I think that's sort of -- that is kind of -- that market is underserved. Would you agree?

Absolutely. And Mike, as you think about it, so exactly to your point, we're targeting a different client than many of the other wealth managers that may be focusing in on the ultra high net worth individuals. We're focused on mass affluent, which is your average worker who is sitting inside a 401(k) plan, a 457 plan of various ages. We actually are very excited about the millennial population. This is a population that does not have access to advisers and they're very often going to look to their employer. They're also going to look to different digital tools.

So as we think about what we're building here, it is having, first, field and phone-based advisers that can service those clients either face-to-face or over the phone as they're looking for what should I do with my old 401(k) or I'm approaching retirement or how do I think about planning. We're also -- the digital is so important because, again, you've got a client base that wants to do things in a much more digital savvy way. So that's why investing in the digital self-service is so important. But the third element of this is and something you're going to hear us get a little bit louder about is we also have proprietary products that we sell through third-party distribution. And those are also a significant portion of that $200 million of revenue.

So as I think about where does the revenue go, grow here in terms of how we serve those clients, it comes through rollovers from the DC business. It comes through us being able to do retail planning for those clients. So think about held away assets or it could be rollovers from another retirement plan. But this third-party proprietary where we're able to distribute our own mutual fund IRA products into third-party advisers is -- creates a very compelling opportunity for us to serve in a more broad way.

Yes. I'm going to jump ahead to actually that sort of topic. You touched on the millennials. I think that when we talk about recordkeeping, one of the things that comes up is the large population of baby boomers, the assets they've accumulated and I think 11,000 are retiring each day at this point. But what we rarely talk about is the generations under them. I'm a millennial. I started contributing to a 401(k) early because that's what we were taught, right, whereas boomers earlier in their careers may have had pensions, they actually didn't even contribute as early, even though they do have accumulated wealth at this point.

So I just feel like that part isn't talked about as much. And at the same time, the earlier generations are earning more, right, and saving more. So I was wondering if you could sort of comment on that and that dynamic in terms of the outflows versus the inflows that you're seeing.

Yes. And I think I'm glad you brought that up because there has been such a focus on the baby boomers and the headwinds in retirement. And I think we missed the fact that by the time we get to 2028, the millennials will represent the largest portion of the workforce, which is close to 50 million workers. And then you think about the Gen Z population, 5 years later, the Gen Z population, that's another 50 million. So this is a younger generation that is actually focusing in on active savings. We're seeing a lot of younger investors and younger savers that are actively engaging and being able to first take advantage of the employer doing auto plan enroll, auto escalate.

So they're learning the discipline around saving being part of the retirement plan, but they're also much more open and engaging with IRAs and Roth IRAs and thinking about investing in a broader way at a younger age. Many of these populations have grown up in an era of having higher student debt. So as they are coming into a phase where they're starting to see higher earnings, they're seeing the importance of engaging not only in the retirement plan and the broader benefits, but really in engaging with financial planning earlier. So we're really focusing in on that 100 million population that is fast approaching in the workforce and how do we engage them? And I'd emphasize the fact that this generation does not have access to advisers, right?

I've talked before of -- I have two boys, almost 24 and 26. And who do they call when they've got a question about the retirement plan. Of course, they call mom, right? And really understanding, but they're very active on how much should I save and should I max out and how are they thinking about it? And we want to be able to give them more access to advisers and planning in a more democratized way than exists.

The only other piece I would add, Heather, is that third shot on goal, right? So we're focused on the millennials. We're focused on that mass affluent today. But as the baby boomers age, there's going to be a transfer of wealth as well that's going to happen throughout all of that. And I think it's part of what we think about more in the longer term of the investments on the wealth management side, well positioning us for that transfer of wealth to be able to take advantage of it.

Yes. Totally agree. So defined contribution sort of as a topic. It feels like it's been in the news more frequently last 12 months or so. Department of Labor sort of being more active in defending employers, private credit, of course, inclusion in some of these products, the White House having ideas about helping people access liquidity for home purchases. So my question is, how do you see these different topics? And do you think that this business, I think it is exciting -- more exciting today than in recent history?

Yes. I think the -- one of the things that is central to all of these themes is that retirement is at the crux of financial well-being for the American worker. And what we're seeing is if you think about the changes the administration is doing with the Department of Labor, there has been a lot of pressure on the plan sponsor, the role as a fiduciary. There's been a lot of lawsuits, which have made them a little bit more difficult to engage in certain investment vehicles or thinking about what is the fee structure. And so I think, number one, we see a more favorable environment for the plan sponsor and the fiduciary. Perfect example is the direction of being able to create legislation that is allowing private credit inside these plans.

And we are having more and more clients who are asking around how do they best engage having them part of an adviser-managed account today, but being embedded in a multi-manager target date fund solution is something that they find quite appealing. And so having a regulatory and legislative environment that is shifting, I think, is favorable. The second is a lot of the other focus -- you think about -- I know recently, there's been focus around retirement savings and is that a vehicle for purchasing homes. I think that takes away from all of the legislation that's passed in the recent years of the secure 1.0 and 2.0 plans that have been really promoting increasing ways to drive more savings into retirement plans.

And so we see that the retirement plan, the environment is incredibly favorable. I think what is central and again, hearing the administration now talk about retirement plans are working quite well. You look at the account values have grown tremendously the last couple of years. People are saving more. So I think it goes to your point, Mike, I think this is an incredible industry and an exciting industry for us to be in and being one of the top 5 writers and having this be our largest business really positions us to continue to grow in a space that is so central to financial well-being for the American worker.

Great. Maybe we could pivot to investment management. Definitely exceeded organic growth targets in that segment. That's been certainly a bright spot for you guys. I think you -- we saw you launched active ETFs. Like we said, you're engaging on the private side more. Anything else in the pipeline, we could sort of touch on those, but -- and any other else in the pipeline?

Maybe I'll start, and then I'll pass it over to you, Mike. I think with investment management, so first, two fantastic years, really thrilled with the business that has been outpacing the industry in terms of organic growth. We've had steady margin improvement, really strong earnings, terrific team we have on the field. And as you think about where we've had success and where we expect to continue to have success, first is in the insurance channel. We're serving close to 80 distinct insurance clients today. We see an opportunity to continue to broaden those relationships with those clients. So insurance channel is incredibly important as a first pillar.

Second is the continued growth in privates and alternatives. Much of that is into those insurance clients. But again, we think we're well positioned there. Third focus is around the expansion into the U.S. intermediary market. And so that's why the launch of the active ETFs was so important. But it dovetails really nicely with the focus on the crossover between our retirement and our Wealth Management business because as we continue to expand our wealth management business, that is a great distribution avenue for our investment management arm. And then finally, as we think about the continued growth in the international space with our income and growth franchise, bottom line is we've got a lot of breadth and depth and scale across this business to be able to set us up for continued growth.

Yes. And just a couple of things. I think 2% organic growth, that's our long-term target. Nothing to change there, even though we had a fantastic 2025. I think what gives us a lot of comfort is we're not relying on one particular channel or one particular distribution outlet. It's very broad-based. Like we're doing it internationally. We're doing it domestically. We're doing it across the different investment channels. And so whether it's retail or institutional, I think that gives me a lot of comfort that it's going to continue in '26 and beyond. And to Heather's point, a lot of it is also on the partnership side.

We do leverage the retirement business to help Matt do what he wants to do in the insurance channel because sometimes we don't manufacture every solution. We understand the liability side. And so we understand how to build an asset portfolio around what's needed for other insurance companies. But sometimes we're sourcing those other assets from other manufacturers. And it will be true with the retirement business over time, too, as we talk about alternatives getting an opportunity to be in retirement plans more and more in the future. So that's the playbook we've had for a long period of time. I think it's working. We've had two great years under Matt's leadership, and we expect a third.

So I guess pivoting or continuing on with that, is it safe to say between retail and institutional, sort of equal push? Or is it kind of a pivot towards one or the other?

i mean institutional has been where we've been quite successful, right? I think so when you think about retail, we've really been able to attack that in two ways. One, obviously, with the AGI partnership internationally. And then retail, it's been just a constant steady push. And I feel like that you mentioned active ETFs, that's certainly going to help us on some of the products that we've acquired through the AGI piece, you think about incoming growth and getting more momentum in the U.S. around that particular product. So retail U.S. is one we've been more focused on as that's typically been the laggard in the past, but was not the case in 2025.

Okay. And maybe just because they're here at the conference, but the Blue Owl, curious how that partnership is going so far? Anything new to report there?

Yes. Our teams have been actively working on product launch for the first half of '26. which is the multi-manager target date fund. We already have it embedded into adviser managed accounts. And kind of going back to the thesis of why we selected them as a partner is we have some very, very good capabilities on the private side. We thought that much of what they brought in was complementary to that. And again, when you think about this in a multi-manager vehicle, the fact that we can leverage the best of the organization to kind of build a product together that we can bring to the market in the DC space, we're excited about what lies ahead.

Great. Maybe we'll just do a quick pause. Any questions in the audience before we move on? All right. And just to remind -- we do have some questions. No.

All right. So pivoting to EB stop-loss. I thought maybe we could refresh key messaging from the fourth quarter, what -- and the reserve actions, right, and what drove those?

Yes, happy to, Michael. First, just when we talked about on the call was that if you look at where claims are coming in with the '25 business relative to '24 business, it is modestly better. But what we talked about on the call is like we're in this kind of once-in-a-generation type health care backdrop. And the range of outcomes around stop-loss business today is much different than what we've seen pre-COVID. We typically talk about a 3-point delta on our target range of 77% to 80%. That's what we're trying to price all our new business at. But right now, it's probably something double that, especially coming out of the fourth quarter.

We see a lot of claims experience coming in the first quarter, a lot come in the fourth quarter. Third quarter, typically, we're about 1/3 complete on a paid basis. Fourth quarter, we're about 2/3 complete, and we expect to be about 90% complete in the first quarter. So given the range of outcomes, given the importance of making sure that stop-loss doesn't take us off course in 2026, we want to be on the higher end of that best estimate reserve range. So that's what we did. I think there was some confusion around where does the Jan '25 business finish versus where is it reserved at this point in time. We need to see the first quarter play out. But importantly, we feel like we've taken the right actions to put ourselves in a position again, so it doesn't take us off course.

You look at EB 2024, we had $40 million of pretax adjusted operating earnings. It was over $150 million in 2025, and we expect an improvement in 2026. And so this is just part of that road to recovery within EB, and we continue to take the right actions across the three dimensions of what is going to fix it. One is pricing. One is how we're doing our risk selection. And third is making sure that we're reserving for the products appropriately.

So I spoke with a couple of stop-loss brokers and actuarial consultants. And at least the sense is that it seems pretty clear that the underlying claim volatility, I guess, higher, more expensive claims and the frequency, right, seems like it's probably going to persist. But the beauty is it's a short-tail product. You have been obviously taking rate where necessary, managing the book. And just kind of wondering though, should we expect because the cohort that I was speaking about sort of expect this to persist, makes sense, you can attack that with rate. And your competitors are also seeing it, right? I think that's been pretty clear, right?

100%. And we expect the same -- in the near term, we expect the same thing. We expect enhanced volatility around this product line. It ties to just the comments on reserves I just made. And I do think, particularly at the end of '24, there were a lot of questions, folks thought this was a Voya-only issue. I think in '25, people realize what's happening in the health care backdrop and what's happening around Stop Loss. We actually got a 21% rate increase on the Jan '25 business was more difficult because we were one of the only ones going out with that kind of rate. And we -- the persistency on the block was 2/3. We're typically in the 70% to 80% range.

When you look at what we did in the Jan '26 block, we got 24%. But because you see other companies doing the same thing, we were able to hold premiums relatively stable. We were able to hold premiums stable versus being down in Jan '25. And so I think that speaks to what you're alluding to, Mike. And the other piece I'd say, too, is we're still seeing a ton of RFPs on this product. RFPs are up meaningfully. And when we look at the need in the market for this type of product, it's never been greater because a lot of people are focused on stop-loss. What we're focused on is our customers and trying to help them manage through what's happening from a health care backdrop. And what they want is they want stable benefit spend. And so they're willing to spend 4%, 5% of their benefit spend on health care to get a stop-loss product to lock in what it's going to look like them for the year. And so the value is there, the RFPs are up, and that also lets us get better on the risk selection.

And so we feel like we've made progress in 2025 with the teams on making sure we're even better around risk selection, more thoughtful about things that are happening in the marketplace. We've talked about cell and gene therapy. We've talked about cancer in younger ages. Those themes are elevated. And so we're taking the tack that we want to protect the balance sheet, margin over growth. And so those are the actions we're taking. But just circling back to where we started, Mike, we think it's going to be like this for a little bit for sure.

Over time, I think manufacturers are going to figure out ways to just balance things back to the way they were and make sure profit margins get to where they should. That -- it's not a matter of if, it's just a matter of when, but it will take a little bit of time, and that's why we talked about a 2-year progress.

Yes. And one thing I want to emphasize, I think it's really important is we effectively made progress on Stop Loss, as you said, two year, we made really good progress in '25. We're not declaring victory, but it didn't take us off course for delivering on an exceptional year in '25. And we think that we've got it ring-fenced. We think we're effectively managing it, but it's not going to take us off track with our cash generation in '26. And I do think that's incredibly important. There is more work to be done. We're seeing the market harden. We're seeing a lot of companies that are leaning in doing the same thing. And so most important message is around the fact that we do think we've got this managed, and it's not something that's going to throw us off as we think about what we're aiming to deliver for '26.

and that's sort of a segue into the next part. But I guess I just wanted to reiterate the value proposition for Voya for your customers, the employers. Stop-loss is one of several products that you offer. And at least as I understand it, when you're sitting down and speaking with the employers and working -- obviously, they're under pressure. I would think that the stop-loss product is still advantageous relative to health insurance plans. That's certainly an area of pressure. But you -- I guess it could be an opportunity maybe I'm thinking about it correctly, but let's say, you have maybe a little bit of lower profitability than you'd like with one customer, but they're a record-keeping customer or they participate elsewhere in [ EB. ] But how does that interplay factor in for you guys?

Yes. I think that as you think about Stop Loss, this is a product that most other benefit products, the HR head is the decision maker. This is one where it really comes down to the CFO often making a decision. So it's going to have a different focus. Of course, benefits person is still having a decision in it. But because of that and given the fact that this is the most significant spend, it does go to a few points Mike mentioned. Is that, number one, the demand for self-insured is up because many employers cannot afford the fully insured plan. So we see that continuing to grow.

There's a scarcity issue. There are fewer providers that offer this. So that scarcity gives us the ability to leverage the fact that we are in the market, we can be more, I think, disciplined and selective as we're looking at RFPs. But as we're working with brokers and employers, we are focused in on that broad bundle. So how do we leverage the scarcity fact that brokers have access to our product, employers have access to our product to be able to grow in the other lines of employee benefits or even scale it more broadly across the workplace. What we don't want to do is to sacrifice margin in that focus. So it still continues to be margin improvement over growth, but there is -- we do think there's a broader leverage with brokers.

Yes. We think that's a shift, right? If you go back years ago, probably not the case as much, but we think just given all the points Heather just made heading into '26 and what's happening with the market, we think there's a shift in that regard.

Okay.

Great. Just a reminder, we can take any virtual questions in the last 5 minutes here. We do have a question from the audience here. Just one second.

Just other people are suffering in the stop loss business. I don't know as well, but you don't have the same market share you might have in other businesses, in terms of the industry sorting itself out, would you consolidate in this area to become bigger to own it? Or would you lose that business? Like how much would it hurt you to not have that business and I guess linked to this, this increase in cost of health care, how much do you think is structural versus just the [indiscernible]?

I think the -- I guess the first bit of the question is we -- where we're sitting today about a $1.2 billion, $1.3 billion book. We're a scaled provider in the market. And so from our perspective, we'd frankly rather lose a little bit of that to be able to improve the margins. One of the things that Mike and I have said for years is this is a business where when running at normal loss ratios, we didn't necessarily need to capture market share to continue to grow it because you've got the leverage trend in that. So that continues to be our mindset. But we've been focused on, frankly, reducing the exposure to any bit of volatility that comes from stop loss and growing the revenue and earnings in, frankly, the fee-based businesses, retirement, wealth management, investment management.

And we still think that it is -- to the point we've just been discussing, it's an important product for employers and for our employee benefit business, but really finding that right balance to it. And then to the point about is this -- how do we see this? Is this just kind of a new normal of a trend? I think to Mike's point, and I'll let him add is that the higher claims costs we're seeing, we probably need to expect that this is a newer normal that we're seeing more people with diagnoses. We're seeing increases in costs, I do think that the industry is going to figure it out and that we will get our arms around it from a pricing standpoint, from managing it. But we -- the days of 5% to 6% medical trend are probably in the distant future for a period of time. But I think that we can absolutely get our arms around it and manage that. I think the industry will as well.

Yes. Maybe just two builds. I think first, we have about a 4% market share in stop-loss we have for a long period of time. There's only a handful of companies that have that kind of scale that are offering stop-loss to self-insured employers. That's important because this is a law of large number of gains. Like -- and you'll see it sometimes people try to get in the business. We get a lot of volatility there out, not just now, that's happened over decades. So you need that scale to be able to be competitive in the space.

To Heather's point, this margin over growth concept, we -- there are well-running cases we're happy to have in the book, but there are cases that are poor performing. And if we feel like we don't get the rate or we don't like the risk, we're okay not having that in the book. That's what we should do. Longer term, on the health care side, I don't think stop loss is going to be really the barometer for it per se. But because as I mentioned, the percentage of premium relative to benefit spend is still relatively modest. It's a really good trade for employers. So even though you see these big rate increases, it's something that CFOs are happy to spend. I think it's more a question for health care. Like can they continue to roll out at high single-digit, 10% single dollar inflation? Like over time, I think that gets difficult. That's why that's a big conversation in Washington.

Great. So a minute or so left here, but capital generation, capital return. One of the things that's resonated with me is you're being vocal about consistency in capital return. So I thought we could sort of end it with the outlook there.

You want to start?

Yes, we've been touching on it, and we've talked about it, whether it's the capital return in the first half of the year. We've talked about it from the perspective of being able to do bolt-ons and still be returning capital through share repurchases and dividends. We think we're very well positioned for this. And I think Heather and I talk about it, even though we're looking at bolt-ons, it's like there's no company we know better than Voya. And it's trading at -- we got a return on equity close to 19%. You all know the multiples.

And so it's just hard not to want to do that. And so that's what we're doing, and we'll continue to update you along the way, but that's going to be a big part of the value proposition, along with just growing cash generation. As you talked about, Mike, we feel like we're going to do that in '26, more than we had in '25, and we're going to do that through the commercial momentum, the expense efficiencies across retirement and IM and continuing to get the improvement in margins in EV. So the road map is there. We're just going to go out and execute on it.

Yes. And I would just close with, I think it is such an incredible value proposition. You think about commercial generation that we're committed to and we're delivering on, as Mike mentioned, the cash generation and the higher ROE, it's hard to find a value and an opportunity like that in the marketplace. And we think that it's incredible compelling, and we're going to lean into to purchase our own shares, and we hope you will as well.

Great.

Thank you, everyone.

Thank you, guys.

Good morning. Welcome to Voya Financial's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the call over to Mei Ni Chu, Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining us this morning for Voya Financial's Fourth Quarter 2025 Earnings Conference Call. As a reminder, materials for today's call are available on our website at investors.voya.com. We will begin with prepared remarks by Heather Lavallee, our Chief Executive Officer; and Mike Katz, our Chief Financial Officer. Following their remarks, we will take your questions. I'm also joined on this call by the heads of our businesses, specifically Jay Kaduson, CEO of Workplace Solutions; and Matt Toms, CEO of Investment Management.

Turning to our earnings presentation materials that are available on our website. On Slide 2, some of the comments during today's discussion may contain forward-looking statements and refer to certain non-GAAP financial measures within the meaning of federal securities law. GAAP reconciliations are available in our press release and financial supplement found on our Investor Relations website.

And now I will turn the call over to Heather.

Thank you, Mei Ni. Good morning, and thank you for joining us today. Let's turn to Slide 4. In 2025, Voya delivered strong financial and commercial results that exceeded our targets and accelerated our growth strategy. We delivered over $1 billion of pretax adjusted operating earnings for the full year and significantly grew earnings across all segments. We generated $775 million of excess cash, well above our target.

And in 2025, combined Retirement and Investment Management assets surpassed $1 trillion. This achievement illustrates our scale and reinforces the value of our integrated business model. These financial results reflect our outperformance against the priorities we set at the start of the year, accelerating commercial momentum in Retirement and Investment Management, successfully integrating OneAmerica and improving margins in Employee Benefits. Voya's financial performance and strategic progress show the strength of our franchise and our team's consistent focus on execution.

Before Mike walks through the quarterly and full year numbers, I'd like to touch on a few key highlights from 2025. In Retirement, we delivered exceptional results across our business. Defined contribution net flows surpassed $28 billion, the highest in Voya's history, and our participant base is fast approaching 10 million accounts, demonstrating our expanding reach. The OneAmerica integration significantly exceeded our financial targets while expanding the capabilities we offer clients and broadening our reach with advisers.

We also continued to expand wealth management as a high-margin growth engine. The business generated over $200 million in net revenues in 2025, contributing to our exceptional financial results in Retirement and helping us serve our customers to and through retirement. Across Retirement, our strong margins reflect our scale, our focus on driving profitable growth and our disciplined expense management as we invest in key growth initiatives.

In Investment Management, we delivered strong results, reflecting the scale and breadth of our platform and the momentum we're seeing across the business. We delivered a record $1 billion in annual net revenue and 4.8% organic growth, well above our long-term target. Our platform is well positioned in the areas where the industry is growing, including private assets, insurance asset management and the continued expansion of our intermediary platform with actively managed ETFs.

We're an established leader in the third-party insurance channel built on our expertise in managing Voya's general account. This channel continues to build momentum heading into 2026 and is a clear competitive advantage. Our record net flows in 2025 drove AUM to $360 billion, highlighting both the competitiveness of our offering and the trust our clients place in our investment capabilities.

In Employee Benefits, we made meaningful progress in improving margins and expect further improvement this year. In Stop Loss, we have increased our rates, enhanced risk selection and been disciplined with reserving. Our actions position us well for 2026.

Across the enterprise, our results this year reflect the competitive strength of our franchise and the progress we're making against our strategic priorities. Our strong performance drove significant cash generation and positions us well to further increase excess capital in 2026. Together, our growth in excess capital and strong balance sheet gives us flexibility to deploy capital to the most value-accretive opportunities.

With that, I'll turn it over to Mike to walk through the financials in more detail. Mike?

Thank you, Heather. 2025 marked a strong year of execution. We generated over $1 billion of pretax adjusted operating earnings, $168 million higher than a year ago. And we increased earnings per share 22% to $8.85. This included EPS of $1.94 in the quarter, which was up 39% from last year. These results were driven by management action throughout the year as we delivered above-plan financial results across all our strategic priorities.

We continued our commercial momentum in both Retirement and Investment Management. We significantly exceeded our financial targets integrating OneAmerica, and we achieved substantial margin increases in Employee Benefits. This led to approximately $775 million of excess capital generation in 2025, including approximately $175 million in the fourth quarter. And looking forward, we expect further excess capital improvement in 2026.

Turning to Retirement. 2025 was an exceptional year, marked by record commercial results, robust earnings growth and higher value accretion from OneAmerica. We generated nearly $1 billion of adjusted operating earnings in Retirement stand-alone, 17% higher than 2024. This included $255 million of earnings in the fourth quarter. Earnings growth was primarily driven by higher fee-based revenues, which now exceed $1.4 billion.

Commercial momentum and our integration of OneAmerica are driving a 21% increase in fee-based revenues year-over-year. Importantly, we finished the year with an adjusted operating margin of 40% as we both drove efficiency across the business while investing in key priorities that accelerate our strategy.

We generated a record $28 billion of organic defined contribution net inflows in 2025, and we added $60 billion of assets from OneAmerica. Together, this supported a 30% increase in total defined contribution assets to approximately $730 billion at year-end. We now have a base of approximately 10 million participant accounts for us to serve both to and through retirement.

Looking ahead to '26, we anticipate meaningful defined contribution net inflows underpinned by plans expected to fund in the back half of the year. And our scale and leadership position in Retirement provide a strong foundation for durable fee-based revenue growth, increasing cash generation over the long term.

Turning to Investment Management. 2025 was a year of record commercial results and revenue. Net revenues exceeded $1 billion in 2025. Both institutional and retail revenues grew year-over-year, contributing to overall adjusted operating earnings of $226 million. This included another year of exceptional investment results as we realized $35 million of performance fees in the fourth quarter.

We generated flows of approximately $15 billion, well exceeding our long-term organic growth target of 2%, further scaling our franchise. Flows for the year were broad-based across channels and strategies. In institutional, insurance channel demand for investment-grade credit, commercial mortgage and private credit strategies remain strong.

And in retail, international demand for income and growth remained robust, while fixed income and specialty equity strategies drove positive flows in the U.S. intermediary channel. We enter 2026 with significant momentum and are on track to deliver another year of organic growth.

Turning to Employee Benefits. Adjusted operating earnings were $152 million in the full year, significantly improved from $40 million in the prior year. A key driver of this improvement included Stop Loss, which I will discuss in a moment. In Group Life, full year loss ratios were at the low end of our target range of 77% to 80%. This included favorable loss ratios in the fourth quarter, driven by better-than-expected frequency and severity of claims. In Voluntary, our full year loss ratios were approximately 50%, consistent with our plan to drive enhanced value for our customers.

Turning to Stop Loss. In 2025, we delivered meaningful improvement supported by higher rates, tighter risk selection and disciplined reserving. Full year reported loss ratios improved by 10 percentage points from 94% to 84%. This reflects in part a reserve increase of $37 million in the fourth quarter.

Claims experience on the '25 book is developing modestly better than the prior year. However, ensuring we have a well-supported reserve level heading into first quarter is essential. And as a reminder, claims experience for January cohorts will move from approximately 65% to 90% credible on a paid basis through the first quarter.

Looking forward, we continue to embed recent experience into our pricing and risk selection. For the January 2026 business, we achieved an average net effective rate increase of 24%, above the 21% increase secured last year. Different than a year ago, we were able to maintain in-force premiums. And we have more opportunities to select our risks with RFP volumes rising, driven by employers seeking greater certainty in their medical spend. Collectively, these actions, reserving, pricing and risk selection have materially strengthened our positioning and support further margin expansion in 2026.

Turning to Slide 11. We generated approximately $775 million of excess capital in the full year, including approximately $175 million in the fourth quarter. This meaningfully exceeded our $700 million target in 2025. Exceptional earnings drove a more than 200 basis point expansion in our adjusted return on equity, which now stands at 18.6%.

We have been disciplined with our capital in 2025, including our acquisition of OneAmerica, which is generating earnings and returns well above our original targets. More broadly, our strong balance sheet, healthy excess capital and highly cash-generative businesses provide us significant flexibility to deploy capital in the most value-accretive way.

In the near term, the best use of that capital is for share repurchases. We will repurchase $150 million of shares in the first quarter and expect to do the same in the second quarter, subject to macro conditions. Longer term, we will continue to be strategic, opportunistic and disciplined with our deployment of capital as we accelerate our strategy. We head into 2026 with clarity on our priorities and great momentum. We exceeded our financial targets in 2025 and expect to do the same in 2026.

I'll now turn it back to Heather to share those priorities.

Thanks, Mike. Turning to Slide 12. I want to thank the entire team here at Voya. Collectively, we delivered for our customers and positioned Voya for another strong year in 2026. Our priorities for 2026 are clear and compelling: growing excess cash generation, maintaining balance sheet strength and capital flexibility, driving continued commercial momentum in Retirement and Investment Management, and further improving margins in Employee Benefits. These priorities and our continued focus on execution, accelerate our growth strategy and create meaningful value for our customers and shareholders. We are helping our customers build financial confidence and clearing a path for better outcomes today and in the years ahead.

With that, I'll turn it over to the operator so we can take your questions.

[Operator Instructions] Our first question is from Bob Huang with Morgan Stanley.

My first question is on Stop Loss, especially regarding the reserve that you've added. Can you maybe give a little bit more details behind the reserve actions? Is it more of a -- you have the reserves mainly just to pad the reserves to be conservative? Or is it more you're actually seeing some losses developing that would cause you to take the actions you've taken?

Bob, yes, first, just let me start by saying and reiterating what I shared in the prepared remarks. When we talk about the January '25 business relative to the January '24 business, it's running modestly better than where we were at this point last year. That includes when we set the reserves coming out of December and frankly, where we stand right now.

And then to your question, second, we did increase reserves in the quarter. The importance of the claims experience in the first quarter can't be understated. As I mentioned, we moved from 2/3 complete to 90% complete in the first quarter. And the range of outcomes today is different than what I would say historically for Stop Loss. You hear us talk about 77% to 80%, a 3-point range. But with this health care backdrop, that range is wider, probably double the normal range. And so when we look at the reserving, we think about being on the higher end of that best estimate range.

Now when we look forward and we think about the margin expansion that we expect in 2026, we certainly see that coming from not only the perspective of where we price the Jan '26 business, 24% increase we got on that business. And frankly, from a risk selection perspective, we've gotten more opportunities. RFPs are up. And as I just mentioned, we are seeing employers look for this type of coverage as they're really trying to get certainty with their medical spend.

I think the big step back here right now is that when we look at Stop Loss, it did not take us off course for an incredible year in 2025. And the actions we've taken across pricing, risk selection and how we reserve for this heading into 2026 positions us to say the same.

Got it. Really appreciate that. So it sounds like your path hasn't changed. So maybe a follow-up on that specifically is the 24% rate increase for the January 2026 cohort. As we go forward, obviously, that's a big rate increase. Do you feel that rate increase is enough or sufficient going forward as we think about just the broader Stop Loss environment where you feel like maybe going into the next few years, there should be more pricing. Just curious, any comments or dynamics on pricing.

Yes, we do. We do, Bob. We feel -- when we think about where trend is, we talked a lot about the fact that we expected higher trend in '25 and '26, and so we went out to get that rate. Certainly, it was easier for Jan '26 than it was for Jan '25 as we were ahead of many in going after that rate. But when we look at this relative to that kind of high single-digit, maybe 10% first dollar trend, you lever that up around, we think, in that 20% range.

And so the other piece I'd mention, too, is that demand we're seeing from employers that are looking for certainty of spend. We feel like as we move forward on the progress of margin improvement at the cohort level that we're going to have even more opportunity in 2026, because when you look at the demand, it's up, supply is at best, limited to down.

Yes. And Bob, it's Heather. Maybe one thing I would add, just to kind of do the broader step back on stop losses. We've always talked about this being a 2-year journey. And as Mike talked about the $100 million improvement in earnings in '25 is a significant step in the right direction. We aren't declaring victory. As Mike talked about, we're reserving for a wide range of outcomes, but we believe we only have upside from here, which is why we have reiterated our capital deployment plans for the first half of '26.

Our next question is from Tom Gallagher with Evercore ISI.

A couple of Stop Loss follow-ups. Mike, when you said your actions support further margin expansion in '26, are you -- is your baseline the 84% that you did for the full year? Or is it the 91% accident year loss ratio for the Jan '25 cohort like what should we -- when you say improvement from which number, the 84% or the 91%?

I think it's both, Tom. Like when you think about the 84%, I mean, certainly, that's the reported levels of loss ratios for the full year. And as Heather just mentioned, we took the EB business from $40 million to $152 million. That included progress with Stop Loss, but also from the 91% perspective. And I think Bob was getting at this just a moment ago, when you think about reserve levels, and frankly, we -- fourth quarter is super critical when we make that assessment of where do we think the range of outcomes are.

As I just mentioned, it's not a 3-point type of wideness in the range. We think it's frankly closer to double that. And we want to be in a position here where we're at the higher end of that best estimate range. Now we certainly need to see where things play out in the first quarter, and frankly, some of the second quarter before we decide where this is ultimately going to land or where we see where this ultimately is going to land. But the one thing I would just kind of encourage folks to think about here is don't conflate where we're reserved at with where this ultimately lands.

And Tom, I would just add to it, if you really compare where we were a year ago with our reserve levels, about this time last year, we were close to 95%. And while we're not fully complete, on the '25 book of business, you see it coming in closer to that 90%, 91% range, which is quite an improvement. And so we do think it's prudent given the backdrop to do the reserve adjustments that Mike mentioned. But as you saw last year, things only went in a one-way direction which was a positive direction. And so we see -- we like the progress we made, and we see further upside from here an improvement to build on what we delivered.

I appreciate that color from both of you. My follow-up is just if you look at the, I guess, the loss pick of 91%, it implies loss cost trend was up 20%-ish. Is that the right level that you think is happening across the board for Stop Loss? on a trend basis? Or was there something about your risk selection? Did you get selected against? Do you think your loss experience was worse. I just want to get a sense for like what did you see in the quarter? Was it material worsening? Or is this more conservatism?

I just want to get a sense for what do you think actually happened in maybe why -- I think people look at the 91% and they get scared because you went from 87% and 91% and think you don't have your arms around the situation. So maybe just to the extent that you can tell us how confident you are that you have your arms around the situation and you're not seeing adverse selection.

So from a risk selection perspective, it's about a well thought never one. I think when we talked about the Jan '24 business that was risk selection, not where we wanted to be, in any way, shape or form. We made improvements when we think about where we were at Jan '25, and we expect to make even further improvements on risk selection. So it's never perfect.

Tom, I think to your question around the trend, as I mentioned earlier, like we think it's in that, call it, 20% high teens level. And so it was more difficult to get rate in the Jan 2025 than it was for the Jan 2026 for the reasons that we were talking about around demand. So when we -- when you just kind of roll that all together, your -- the heart of your question, like do we feel like we have our arms around this? Absolutely, we do.

Our next question is from Mike Ward with UBS.

I was curious about maybe just utilizing the Stop Loss experience. And in terms of leverage in order to sort of cross-sell other products with specific employers, you know what I mean? Like how is that going? Is that becoming material? Is that contributing to your confidence in '26 for the Retirement side?

Yes. Mike, it's Heather. I'll let Jay add. But I think what's important to think about is that we're often selling Employee Benefit products to the same brokers and consultants, both the Stop Loss and the Voluntary. And it goes to the point of we see high demand for the products that we're offering. But maybe the last bit I mentioned before I toss it over to Jay is our teams have continued to be highly disciplined on margin over growth. So we're not leading into anything to drive unnecessary growth just given the backdrop. But Jay?

Yes. As we think through this heading into '26, as Mike referenced, the supply at best level, we think is actually down, but the demand is significantly up, and we're hearing that from our brokers and intermediaries. And so what it does is it does cause this kind of capacity conversation of there is only so much capacity in the marketplace for coverage. And getting a more fulsome book as we think through the areas of Employee Benefits and where we have and are in similar segments in Retirement, we definitely are changing that conversation. It's happening in front of us. We're engaged in those conversations now. We expect those conversations to continue.

We are also seeing more and more from a bundling perspective. So as we get into different questions on different parts of the book, we're seeing a greater opportunity to bundle given what we've done in some of the product lines. And so I think we'll come back to you as this conversation progresses, but it's definitely a leverage point and a conversation point we're having actively with our partners.

And then just for Heather and Mike, you both sounded confident on the idea of expanding your excess cash flow generation in '26. Wondering if you could unpack that a little bit more.

Yes. Look, it really boils down to what we've been talking about in 2025 and what we're signaling around 2026 from a priority perspective, Heather finished with this, really, there's really three elements. I think the first element is the commercial momentum that we've had in both Retirement and Investment Management, record years. Earnings have been fantastic. And then what we just talked about from an Employee Benefit perspective, we made good progress in 2025, but we're not satisfied, and we see even more margin expansion in 2026. That's going to be a contributor as well.

And then if you're looking at it from a per share perspective to Heather's point, just a moment ago, we see share repurchases as a key element of the value proposition. And frankly, when you look at our return on equity at close to 19%, we're more than happy to buy shares at these valuations.

Yes. And Mike, maybe to build and certainly makes sense while there's a lot of questions on Stop Loss. But if you think about the broader and, frankly, larger portion of our business, we've had an absolutely amazing year in '25. If I think about record revenue and Investment Management, record flows driven by a diversified breadth of solutions with strong investment performance. We've talked about and you heard Mike mention on the call, an absolute record year in Retirement that is setting us up well for continued growth at margins that frankly have been above our long-term target. We're making progress on the build-out of wealth management, which further diversifies that business.

And then the OneAmerica, where we've added additional capabilities for our clients. We brought in additional distribution partners but we've also demonstrated really good deployment of capital into an acquisition that generated over 30% unlevered return. So to your question, Mike, yes, we feel confident in our ability to continue to grow cash generation in '26 and are committed to returning that back to shareholders.

Our next question is from Suneet Kamath with Jefferies.

I wanted to go back to Stop Loss. Mike, as you were talking about the '25 block, I think you said it was modestly better than '24. And I had sort of expected it to be significantly better just given the pricing actions that you took. So I guess the question is, is this 2-step process that you talked about sort of extending to maybe it's going to take you another year to kind of get there in terms of the loss ratio?

Yes. Look, I think it's a stay tuned, Suneet. We're pricing this business, and we did it in the fall. We'll do it in 2026 to get our target margins. And as we've been talking about, we made a lot of progress in 2025. We're not all the way there. Our expectation is to continue to make progress in 2026, the exact amount of that, I think we'll have a better sense as we get to more in the middle, late part of 2026. But we'll update you along the way.

Like Tom was asking earlier, do we have our arms around this, we do, and we're taking action across the three dimensions. And those three dimensions are the pricing, the risk selection and the reserving. And so we think we've taken the appropriate steps in the fourth quarter to make sure that we're in a good position in 2026 to continue that excess capital generation growth that Heather just talked about a moment ago.

Okay. And then I guess when you go from 1/3 to 2/3 then to 90% of the experience, is there something in the latter part of how that experience earns in that gives you more information? Or is this just as you saw what happened in the fourth quarter, that's what caused you to take the reserve build?

Yes. It's just timing, Suneet, right? Like fourth quarter is really critical. First quarter is really critical. That's not new news. We've been trying to get that across for the reasons you just called out. And so even though the claims are happening in 2025, we may not be aware of them until 2026. There's just a lag between event and when it's reported. And so with that health care backdrop, I think it's just super prudent to be on the higher end of best estimate ranges for reserves. So that's what we did.

Our next question is from John Barnidge with Piper Sandler.

My first question is on Stop Loss. And Mike, you had some comments about range of outcomes is different today than historically and a lot wider. Is it one of these things with the Stop Loss business with the fourth quarter there just probably is going to be more seasonality going forward in this business, in this backdrop, setting aside the rate need?

Look, I think -- when we look at '24, we look at '25, we're in kind of a once-in-a-generation type of situation as it relates to the health care backdrop. Where this lands as we get deeper into 2026. And is this going to be something that's happening every fourth quarter? Yes, I wouldn't want to signal that. What I would want to signal is that the analysis, the work that we do and what we're putting on our book and the analysis and the work that we're doing in assessing what the right amount of reserves are, that's going to continue.

Does the range stay at a similar level in December of 2026 that it is December 2025. We would hope not, but if it is, that's the way we're going to assess it. And all the actions we've taken heading into this year, again, gives us a confidence level that we're going to continue to expand margins in EB, and it's not just a Stop Loss story. It's frankly across the board in that particular business line.

And my follow-up question, can you talk about the strategic rationale of Stop Loss in the context of what it brings in synergies to the growth opportunity in Investment Management and Retirement?

Yes, John, it's Heather. Happy to do that. And I think if you look broadly at Employee Benefits and Stop Loss, this isn't a very important product in our overall portfolio. If you think about within the workplace business, stop losses in incredibly high demand for employer clients to help them control really more volatile medical expenses when they choose to self-insure.

As you heard Jay mention, there is much greater demand and lower supply. And so we think we're in well positioned, specifically demonstrated by the 24% rate increase we achieved on the book, while maintaining the block size. But it also goes broadly. You think about the supplemental benefits we have is those are really critical for families and employees to cover out-of-pocket expenses when they're in a high deductible plan. It goes to the capabilities Jay talked about in terms of the lead management build-out is that our workplace benefits are designed to help people protect against unforeseen events.

And then you think about the complementary nature across Retirement, wealth management and asset management, those are all really around accumulation returns and planning. And so I see them as the opposite side of the same coin is that we've got the right capabilities to serve clients at the workplace. We've got the right capabilities to bring to institutional clients. And it goes back to our vision really helping clients to achieve and secure financial future. So it really is a great strategic asset for us.

Our next question is from Jimmy Bhullar with JPMorgan.

So I just had a question on the Stop Loss as well. And clearly, the results have improved over the past year as you've implemented price hikes. But it's hard to imagine that you're not seeing something that would have warranted you increasing the pace at which you're building reserves versus 3 to 6 months ago. Like I just don't think you would just willingly raise the reserves just for the hell of it to be conservative. So -- and you haven't answered anything on any of the questions on what it is that you've seen now versus maybe 3 months ago, 6 months ago that have caused you to raise reserves as much as you have. Like I realize you will eventually fix this, but you're just not answering the question on what's happened in the business in the last few months.

Yes. Jimmy, I think again -- and maybe just to give you a little bit of color on the types of that we're seeing, if that's what you're looking for. And it's not a different theme. Like we're seeing the same themes with respect to higher frequency related to cancer, particularly at younger ages. We're seeing the higher severity from a cell and gene therapy perspective. And again, like think about where we are in the development. I think that's the key here, right? We moved from really not developed until we get to the third quarter. But even in the third quarter, we're only about 1/3 developed. And we moved to 2/3 developed in the fourth quarter. That's when we're making the real assessment on the range of outcomes.

And then in the first quarter, we're getting a sense of where this lands. And so as I mentioned earlier, when Tom was asking, like, don't conflate where this is landing from where we're reserving at right now. The range of outcomes are wider, and so the prudent thing to do is to be on the higher end of that best estimate range. So the ultimate improvements are going to play out as we move through the course of 2026, but we feel good about where we are, and we feel good about the progress we're making.

But the range of outcomes, okay, that is wider, but you're choosing to be conservative based on something you're seeing in the market, right, or in the loss environment. Because you could have chosen to be conservative throughout the last several quarters as well. Like I heard all the other questions. That's the reason I asked or I heard all the other answers that you provided.

Jimmy, let me add on. I think Mike's been really clear in why we did what we did. But if you take a bigger step back and you think about what's going on in the U.S. health care market, right? We are seeing more cancer claims. We are seeing higher cost of pharmaceutical drugs. That gives a wider range of outcomes. So if we have historically given you a target range of 77% to 80% of a loss ratio, when you think about it, that's a really narrow margin, right? Think about -- if you think about a hurricane trajectory, several days out, you've got a much wider cone. And as you get closer you see a lot -- you have a lot more certainty. And that's really how Stop Loss develops. It is 1/3 complete through the first 9 months of the year. The completion doubles in the next quarter.

And so for where we are and given the claims that we see coming in, as Mike hit on that we see '25 coming in favorable to the '24 book. But it really is that range of uncertain outcomes given the broader healthcare backdrop that we just think it is prudent to take the reserves up, and we see opportunities to more surprise to the good versus surprise to the bad.

Our next question is from Wes Carmichael with Wells Fargo.

Maybe first question off a Stop Loss. But in the Retirement business, could you maybe talk about the outlook for full service in 2026 in terms of organic growth? And also, are there any shock lapses that you expect to still come from OneAmerica? Or are we largely through that?

Sure. If you think a little bit about where we are heading into '26, we are building off of '25 strong organic DC net flows. If you think about the $28 billion we generated. We also had $60 billion in assets from OneAmerica. Our growing participant base is approximately $10 million, and we've done that in high 90s retention rates. So we do expect that the flows in to continue to be strong. And much of this, we expect to be back half weighted. We do have visibility into some of the plans that are funding in '26.

An important data point that we use is around planned RFP activity. And we saw that activity continuing to grow at a healthy and consistent pace heading into '26. We're really pleased with the strong commercial momentum in Retirement, and we'll continue to come back. Again, that's on the heels, if you think about where we finished in '25, Heather referenced this, earnings growth of 17% and above target margins of approximately 40%. So really heading into the year with a lot of strength.

Got it. That's helpful. And maybe just a follow-up on capital deployment. Mike, I hear you loud and clear on buybacks being a near-term use of capital. But could you maybe talk about a little bit further out? Are there more potential roll-up opportunities in the Retirement space? And maybe how many opportunities are out there that are similar to OneAmerica that you might be thinking of?

Yes, Wes, it's Heather. I'll take your question. So if you think about it, the industry -- retirement industry continues to be in secular consolidation. And we're viewed as a natural buyer. I think we demonstrated that very clearly with OneAmerica that we can do this quite successfully and deliver for our clients. So we're actively assessing opportunities. We think that the -- there is a number of opportunities that we can pursue. But having said that, we do have a high bar for M&A right now, given what Mike talked about as we see the most value accretion deployment of excess capital is into share buybacks.

Maybe the final comment I'd make Wes is, to go back to something Mike mentioned on the third quarter call, is that if we were to pursue a retirement roll-up, it does not take us off track to be able to return capital to shareholders. We understand that, that delivering and returning capital on a consistent basis is important to our shareholders. So if you think about the cash payment of OneAmerica, not a large size. So we think there's something that we can do both.

Our next question is from Alex Scott with Barclays.

I do have one Stop Loss question, and I promise I'll ask about something different. So when I think about the 91% policy year and I think about the 24% and the fact you took 21% and it didn't get better last year, it does feel like to believe that you can get better off the 84% calendar year, I need to be able to believe that what you're saying on the conservatism and reserves is real. And it's obviously a tough thing to believe just because like we've had this negative momentum broadly in the albeit you did have favorable development of last year, so I get it.

But I wanted to see if you could give us some metrics, right? Like usually, we could assess this using -- in property and casualty, something like a paid [ out ] ultimate. So if you could tell us how much in actual cash claims you've paid out so far this year on the '25 policy year versus last year versus maybe the historical average or IBNR as a percentage of reserves, something to help us like have some kind of quantitative evidence that what you're saying is real around this conservatism?

Yes. Again, Alex, I mean that's something we can think about for future calls to put out there. I think, again, as we've been talking about the first quarter is going to be able to put that in a more clear light because I think folks will take information on paid claims and try to compare that to 2024. And it's hard to do that. And why it's hard to do that is, number one, it's a smaller block. Second, we've improved the loss ratio experience and then even claim settlements, which we're doing faster today than we did a year ago can conflate how to think about those things. So we don't want to confuse the matter from that perspective.

But again, like we -- when we've been talking about this, we -- the uncertainty around claims in the fourth quarter was high and coming into 2025. It's high coming into 2026. We're happy with how the '24 block is developing, that's developed favorable relative to where things were reserved for coming into 2025. we cannot guarantee that's going to happen in 2026, but that's exactly how we're positioning ourselves.

Okay. All right. Understood. And then second question I wanted to ask about artificial intelligence. And maybe both the good and the bad, right? Like what are the opportunities you see broadly? But then also from a risk standpoint, are there any parts of your business that could get disintermediated. And I think the stocks kind of moved yesterday on the idea that maybe there's software concerns and investment portfolios broadly. So I'd be open to any kind of color you could provide on that as well.

Thanks, Alex, for the question. It's Heather. I'll start, and then I'll ask Matt to add some comments on just how do we see it in the broader investment arena. So first, as you think about AI, the opportunities, as you'd imagine, it's something we're leaning into. Our focus is on leveraging AI to be able to improve client experience to help us to drive efficiencies and to support scale and growth.

We are deploying it right now across a number of areas within our claims organization, within our contact center, certainly within technology as we think about how it allows us to speed up some of the software, the programming that we're doing. So it's something that we are leaning into. It's not new. We've been leveraging some bit of AI for a number of years. We're also paying attention to how it could disintermediate us.

I do think that given the businesses that we are in, we -- people need insurance, they need retirement planning. We see it as something that is a little bit less of a disintermediator, but we're paying attention to ways that it could disrupt us. But right now, we see a lot more opportunities than headwinds on AI. And a critical one goes back to something we've done for years, which is expense efficiency, being able to maintain and grow our margins, and we see AI as an important lever. But Matt?

Yes, Alex, an important question for the broader investor universe here. You're 100% right. I think it's important to think about where there's risk and where there's volatility. And I'll start with an insurance sense about our general account and how we view this really not an issue within the core GA bond portfolio. A broad technology makes up for us a little over 1%. I think you'll see some stats a bit higher across our peers. But again, I think you're going to be generally in the single digits there. We're a little over 1%. And software is about 0.5% if you look at that directly.

And in the investment-grade space, you're going to run in names like Alphabet, Microsoft, Salesforce and beyond. So you've got diversified business models that can actually do quite well with AI, if done correctly. So within a core GA sense, I don't view it as an issue within the private portfolio, less than 1% of our portfolio is in tech. And within high yield, we're not really exposed to below investment grade in a meaningful way as a balance sheet, and that's where you see more industry risk. We don't have anything notable there, nearly 0 in high-yield tech.

Over time, we view technology to be a much better investment from an equity standpoint than a debt standpoint. You can have very disparate outcomes. That plays itself better in an equity sense. Across the equity portfolio, you really have to get into our alternative portfolio for Voya. That's about 3% of our balance sheet within PE, you'll tend to see 25%-ish, 20%, 25%, we're lower than the 25% number in software related. So it's still meaningful. But you get, again, down to a number that's less than 1% of the GA. And I think that's where you have both upside and downside. But in the debt markets, we prefer to lean away from tech and feel very well supported.

But if you're going to look for volatility, look for those more the venture more the recent vintage PE, we don't feel meaningfully exposed there as far as even that alternative portion of our portfolio.

Our next question is from Joel Hurwitz with Dowling & Partners.

So just one on Stop Loss, Mike. I guess I'm just still trying to understand why you can't provide us with the paid claims experience, right? That's something that you guys provided as last year in the fourth quarter in your slide deck. And at the end of the day, I think we're all just trying to understand what does it actually mean that the book is performing modestly better year-over-year.

Yes. Look, I think that's again something we can think about taking forward, Joel. Like when I -- and I mentioned this just a moment ago from a reserving perspective and why we need to be cautious with this. The amount of reserves that we have up this year versus last year is meaningfully less. And part of that is because we've got a smaller block. A part of that's because of just timing of when reserves released versus incurred from the '24 to '25 block and then just the settlement part of it on paid claims. And so when we do the assessment of what we think the appropriate reserve level is, yes, we look at paid claims. We're looking at reported claims. There's more dimension to that than just, hey, how are paid claims developing.

But we certainly can provide more color as we move down the road and particularly in the first quarter, I think would be an appropriate time to do that because you're going to have the right comparison year-over-year. But we'd just be reiterating the same messages that we shared earlier with respect to how we think about reserve levels.

Okay. And then shifting, can you just provide some outlook on how the take-up of your new leave offering and short-term disability has gone, and how we should think about that from a revenue and earnings standpoint in '26?

Sure, Jay will start and Mike can address the revenue question.

Great. If you think about the leave investment, we did successfully launch the integrated leave and disability claims solution in January. We do expect that the offering is going to continue to contribute revenue throughout '26. While it's early, we are encouraged by the initial feedback from our clients and our intermediaries, and they are providing that feedback real time. The market demand for this is really strong. We did see that over 50% of the Group Life, disability and sub health RFPs for 1/1/26 were bundled with leave. It's a really positive sign given the in-source and the commitment we've made to the space.

But we are consistently hearing right now from our clients and brokers that leave administration is the most important capability they're looking for from carriers today. So specifically, they focus on the claims experience for their employees. We'll report back progress throughout the year, but we're really happy with the 1/1 launch.

Yes. The only thing I would add, and I want to come back to the question from Joel just for a moment. But when we look at -- just as you're looking at in-force premium growth, I think we just would encourage you to look at the growth from '23 to' 24 to '25. So growth has been more modest year-over-year. But when you look at 2-year growth across Voluntary, Group Life, very, very good. We had a fantastic year in 2024.

And just on paid claims too, I know that's come up a couple of times here at the end. Like we're not sharing a number. We're saying it's modestly better when you look at Jan '25 or Jan '24, you should be thinking low single digits better on a paid claim basis from where we were a year ago to today. More to come. We don't want people running with that number yet because we need to see how things play out for the balance of the year. But that -- just to size it a bit, that's kind of what I would have in your mind.

Our next question comes from Kenneth Lee with RBC Capital Markets.

One on Investment Management. You saw nearly 5% organic growth in 2025. What were your expectations are for organic growth this year? And in particular, any specific products or offerings you see as driving most of that growth.

Ken, yes. So as you referenced, very pleased with the overall momentum in 2025, the $14.6 billion net growth, really best in a market that still has headwinds. So very happy with that. The theme going into 2026 is, say, twofold. A, longer term, we continue to think about that 2-plus percent organic growth rate assumption. We entered '26 with momentum that has allowed us to grow above that. And we do expect the first quarter to be positive with good breadth across the domestic market. So that's good as we really come into the year on our front foot. That's driven by strong investment outcomes.

If you think about the 1, 3, 5, 7, 10 years, we deliver for our clients, and we get rewarded by our clients with net cash flows. And that's still the basis. And I think the performance fees at the end of the year were a testament to that as well. As far as where we're seeing products and channels, not a big change, insurance with fixed income, public and private still a stall work for us, very strong competitive position. We think more broadly in the U.S. institutional space.

In DC, our target date offerings and partnership and coordination with our Retirement business is a good forward look, new products coming there. and fixed income continues to resonate there. And then internationally, income and growth in thematic equities, again, driving that. So really, it's a continuation of a story of breadth while we're looking to continue to grow upon our strength. So we enter first quarter feeling quite good.

Great. Very helpful there. And just one quick follow-up, if I may. Just on the Voluntary benefits side, what's the outlook here for this year? Is still around 50% benefit ratios there?

Yes. Maybe I'll hit it from a loss ratio perspective margin. And then maybe, Jay, if you want to hit it from just a premium perspective. So we've talked about 50% throughout the course of 2025. We have been building up reserves to get in front of the fourth quarter when we see a lot of seasonality for that product line that worked exactly according to plan. So we saw the 50% come through.

The outlook, we say modest increase with respect to loss ratios. That's totally part of the plan of us providing more customer value with these products. These are important complements to high deductible health care plans. But from a net margin perspective and Heather was alluding to this before, I think it's true not just within EB, but across the board. I mean we are constantly finding areas where we're looking for efficiencies to offset either investments for growth or protect margins where we want to deliver more customer value. And so I think when you look at the Voluntary line, I would think of slightly higher loss ratios, but net margins intact.

Ken, I'll address a little bit how we see the voluntary market heading into '26 and maybe a quick step back on EB. We do expect growth in '26. 1/1/26 sales showed that commercial momentum. Just as a reminder, we are a top 3 provider of Voluntary. We've got about 10% market share. I did reference the newly in-sourced integrated leave and disability claims solution that is going to be kind of contributing to some of the growth and retention of our Voluntary products. That did show itself in 1/1/26, as I referenced, that 50% RFP with bundle.

With that said, our top priorities right now across all of EB really does remain focused on this margin expansion. We're doing it through pricing execution where it is driving stronger persistency in our customer base. That's important. And as Mike referenced, we're creating more efficiencies in the business through investments in claims automation and AI, which is starting to show itself into the efficiency line. And so really happy with where we are in the EB business. As it relates to Voluntary, 1/1/26 was a positive step.

Our next question is from Wilma Burdis with Raymond James.

What's the best way for us to -- or could you give us some insight into how you're thinking about the loss pick for the January 2026 Stop Loss business? Maybe if you could just pull together the pieces on the 24% rate increases, 20% medical trend and any benefits from risk selection.

Yes. Not a ton to add here, Wilma, on just how to think about trend that part of it. We've talked about that being an approximately 20% high teens is where we see trend. And so the other part of it is risk selection where we continue to make improvements, particularly versus where we were with the Jan '24 block. Jan '26 will come back to that in the first quarter. I think it's the same story here where we're going to look at the experience that comes in Q1. We talked about getting improvements. So we'll be in a better place than we were for Jan '25, but where we ultimately set that, we'll make that judgment in April.

Yes. And Wilma, the only thing I'd add to Mike's point is just something he said earlier is, as we're pricing this business, we are pricing it to be back within our target loss ratio range. So I just think that's an important element. And as Mike mentioned, we'll give you more details on the first quarter call.

Okay. And cash generation exceeded Voya's target for '25, could you drill a little bit more into the factors were reserve releases on '24 Stop Loss business. Is that something that would have supported the figure? Or how should we think about that?

Yes. I mean certainly had an effect on the cash generation in 2025. I think net, if you think about what we did in the fourth quarter with the prior period reserve releases in Q1, Q2 were net favorable with respect to just Stop Loss, EB in totality was better. I talked about expenses. So it certainly played a role. And we -- the base case is that it plays a role in 2026 as well.

Yes. And I would add, Wilma, is, again, you think about the cash generation of our Retirement business, the largest business is successful integration of OneAmerica above our targets. That was also a significant contributor to cash generation in addition to what we delivered for in Investment Management. So really, it is a portfolio story and something that we are confident we're carrying into '26.

Thank you. We 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.

Good morning. Welcome to Voya Financial's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the call over to Mei Ni Chu, Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining us this morning for Voya Financial's Third Quarter 2025 Earnings Conference Call. As a reminder, materials for today's call are available on our website at investors.voya.com. We will begin with prepared remarks by Heather Lavallee, our Chief Executive Officer; and Mike Katz, our Chief Financial Officer. Following their remarks, we will take your questions. I am also joined on this call by the heads of our businesses, specifically Jay Kaduson, CEO of Workplace Solutions; and Matt Toms, CEO of Investment Management.

Turning to our earnings presentation materials that are available on our website. On Slide 2, some of the comments during today's discussion may contain forward-looking statements and refer to certain non-GAAP financial measures within the meaning of federal securities law. GAAP reconciliations are available in our press release and financial supplement found on our Investor Relations website.

And now I will turn the call over to Heather.

Thank you, Mei Ni. Good morning, and thank you for joining us today. Let's turn to Slide 4. We're pleased to report strong third quarter results that reflect meaningful progress in delivering on our investor value proposition. Our results build on the success we've seen year-to-date, with adjusted operating EPS in the quarter, up nearly 30%. This performance is a clear reflection of our focus on profitable growth across our diverse and complementary businesses.

Equally important, we generated robust free cash flow in the quarter and remain on track to exceed our $700 million full year target. We've continued to take a balanced approach to capital deployment across the enterprise, and Mike will share more on that in a few moments. I'll also talk about how we're deploying capital in support of our enterprise strategy -- our core markets, expanding into adjacencies such as wealth management and strengthening the connections across our businesses. While we continue to invest in our businesses, we remain committed to returning excess capital to shareholders. As planned, we resumed our share repurchases during the quarter.

Turning to Page 5. Let's look at how we executed on our near-term priorities this quarter. In Retirement, we delivered strong earnings and revenue growth with full year results trending above expectations. This performance was driven by $30 billion in year-to-date organic defined contribution net flows, putting us on track for our strongest DC net flow year since 2020 and further strengthening our market-leading retirement franchise.

Investment Management continues to show strong commercial momentum. The business delivered strong earnings in the third quarter with positive net flows and continued organic growth, putting us on track to exceed our organic long-term growth target of 2%. Voya's performance remains a key differentiator with 74% of our public assets outperforming peers and benchmarks over 5 years and 84% over 10 years. Later this year, we'll launch our first actively managed ETFs further expanding our product lineup and building on our multi-sector fixed income expertise. This launch supports modernizing our intermediary platform with high-growth vehicles, and expanding distribution, creating new opportunities that connect Wealth Management and Investment Management.

Within employee benefits, we continue to execute our disciplined pricing strategy in Stop Loss with a focus on margin over growth as we head into 2026. In October, we launched our integrated claims system to support lead management, a key milestone as we prepare for a full rollout of our end-to-end solution on January 1. This will strengthen our bundled offering across group and voluntary, allowing us to deliver greater flexibility and value to our clients. Taken together, these results reflect strong execution across the enterprise and position us to carry meaningful momentum into 2026.

Turning to Slide 6. I'd like to spend a moment discussing our strategic approach to growing wealth management, where we're making key investments that strengthen our core offerings and create value across the Voya enterprise. Today's customers are looking for support with a wide range of financial decisions and employers increasingly see financial guidance as a way to strengthen employees' financial readiness. Voya is uniquely positioned to meet those needs, building on an already solid foundation with solutions that address the growing demand for advice and planning. This is already a significant business for us with 20% year-over-year sales growth in 2025 and total client assets reaching approximately $35 billion through the third quarter.

We believe now is the time to scale this business and accelerate growth. For example, our field and phone-based adviser network includes nearly 500 advisers, and we're on track to add more than 100 by year-end at our new Boston Wealth Management Hub. We launched WealthPath, our integrated technology platform that will enable advisers to deliver comprehensive guidance and solutions at scale. And we're investing in enhanced digital self-service capabilities which will give clients more flexibility and control. As we expand our adviser base, we will continue to partner with independent advisers to complement our in-house distribution team.

In summary, we're well positioned to serve our nearly 20 million Workplace customers, both to and through retirement, in a fast-growing market that plays to our enterprise strength. Our performance and momentum this quarter and throughout the year, reinforce our confidence in delivering on our full year targets and advancing our long-term strategy.

With that, I'll turn it over to Mike to walk through the financials in more detail. Mike?

Thank you, Heather. We delivered another quarter of strong results, building on our successes throughout this year. We generated adjusted operating earnings of $2.45 per share, a nearly 30% increase year-over-year. This was driven by earnings growth across all business segments and highlights the continued progress we are making on our near-term strategic priorities. Earnings growth also drove excess capital generation of over $200 million in the quarter. Items reducing net income were primarily noncash and largely related to business exit.

Turning to retirement. We generated $261 million in adjusted operating earnings. This is a 24% increase year-over-year and a 20% increase on a trailing 12-month basis. Notably, we are ahead of the expected revenue and earnings contribution from OneAmerica. Margins remain above our long-term targets given continued commercial momentum, driving higher fee income, strong spread income supported by active management of our general account and prudent management of our spend.

Turning to net flows. In addition to the $60 billion of assets acquired from OneAmerica, we have generated approximately $30 billion of organic defined contribution net inflows year-to-date. Third quarter outflows primarily reflected one large recordkeeping plan which we signaled last quarter. Full service outflows were impacted by the anticipated lapses from OneAmerica and the effect of strong equity markets. Importantly, Surrender rates were in line with our expectations and are consistent with prior year. Looking ahead to 2026, we expect margins to return to the midpoint of our 35% to 39% target range. This is intentional as we increase our strategic investments in Wealth Management, which we expect will power long-term profitable growth. As Heather mentioned, our targeted investments in Wealth Management have supported a 20% increase in sales year-over-year. Investments next year will help further scale the business by adding talented advisers, expanding our product line and enhancing our technology capabilities.

Turning to Investment Management. We continue to deliver strong investment performance and drive robust flows across an increasingly diversified platform. We generated $62 million in adjusted operating earnings in the quarter. This is a 13% increase year-over-year and a 15% increase on a trailing 12-month basis. Organic growth at attractive margins and disciplined expense management drove the result. We generated nearly $4 billion in net flows, bringing year-to-date net flows to over $13 billion. This represents organic growth of over 4%, well above our long-term target of 2%. Our successes are broad-based with positive retail and institutional flows, both in the U.S. and internationally, with an institutional several large insurance mandates drove positive flows in the quarter. We now serve over 80 insurance clients and manage approximately $100 billion in assets in the insurance channel. And our capabilities in core fixed income, multi-sector and investment-grade credit remain in high demand.

Within retail, we generated $300 million of positive flows resulting in year-to-date net inflows of over $3 billion. Looking ahead, we remain laser-focused on delivering long-term value for our clients through excellent investment performance.

Turning to Employee Benefits. We generated $47 million in adjusted operating earnings in the quarter. This was primarily driven by favorable group life claims and prudent management of spend. In Stop Loss, a reinsurance recoverable drove the favorable result as we maintain reserve levels across all cohorts. As a reminder, the fourth quarter will bring significant credibility to our claims experience. We expect the credibility of our January 2025 cohort to double in fourth quarter from approximately 1/3 complete to 2/3 complete. That experience will better inform ultimate loss ratios.

In addition to our prudent approach to setting reserves, we are actively pricing and underwriting January 2026 business. Our strategy for that business is unchanged. We are prioritizing margin improvement over in-force premium growth. In group life, experience was favorable, driven by better-than-expected frequency of claims. In voluntary, Paid claims experience was as expected. The loss ratio includes IBNR in anticipation of higher seasonal claims in the fourth quarter as planned. Finally, we are on plan and ready to deliver our end-to-end lead management capability on January 1. Looking ahead, we will continue to achieve margin improvement while delivering strong value to our customers.

Turning to Slide 12. Third quarter marked another quarter of consistent cash flow generation where we generated over $200 million of excess capital and our return on equity improved to 18%. Year-to-date capital generation is now approximately $600 million and we are well positioned to exceed our $700 million goal. We returned approximately $150 million of capital in the third quarter across share repurchases and dividends. This includes $100 million of share repurchases, and we expect to repurchase another $100 million in the fourth quarter. We ended the third quarter with a healthy balance sheet and approximately $350 million of excess capital. Notably, the fourth quarter will also include higher dividends as we raised dividends per share by over 4%. This builds on our track record of growing our dividend each year as we remain confident in the sustainability of our excess capital generation.

Turning to Slide 13. Year-to-date, our approach to capital allocation has been well balanced between investments in the business, returning capital to shareholders and building up our excess capital position. Our healthy balance sheet positions us well for capital deployment in 2026, where we will continue to prioritize as follows: First, we will continue investing in our business in order to drive long-term profitable growth. Wealth Management stands out as another area where we see a clear strategic advantage to expand our capabilities. Second, we will be opportunistic with strategic M&A, such as retirement roll-ups. The bar is higher given how attractive share repurchases are at our current valuation. Finally, we are committed to measured and consistent capital return. We expect to return between $100 million and $150 million in quarterly dividends and share repurchases throughout 2026, subject to market conditions. Importantly, use of capital will be disciplined and evaluated relative to our weighted average cost of capital. Opportunities with longer breakeven or more execution risk will be assessed with a higher bar.

Our 2025 results established a disciplined framework for how we deploy capital. We'll carry that same approach into 2026 focused on driving long-term value for our stakeholders.

I'll now turn it back to Heather before taking your questions.

Thanks, Mike. Turning to Slide 14. This quarter, we continued to make progress, delivering solid results across all of our business segments. Our near-term priorities remain consistent, driving strong profitable growth in Retirement and Investment Management, successfully integrating OneAmerica to drive higher earnings, and continuing to improve margins and employee benefits. Looking ahead, we have commercial momentum, financial strength and strategic focus to drive long-term profitable growth. Thank you to the Voya team for your dedication and hard work in supporting our strategy and delivering for our customers.

With that, I'll turn it over to the operator so we can take your questions.

[Operator Instructions] Our first question comes from Elyse Greenspan with Wells Fargo.

My first question, I was hoping just to get some color on the size of the Wealth Management investment that you're pegging for 2026?

Elyse, it's Mike. So as we look into next year, what we're expecting to use is up to $75 million of our excess capital on Wealth Management, I would think roughly 2/3 of that from a GAAP perspective. We are making some investments in technology, so we'll be capitalizing some of those investments and those will amortize in over time. Now I would expect us to be a little more back half weighted because a large part of those investments is in adding advisers who we expect over time to drive additional revenue. And what's important about that is that it really shortens up the breakeven of these investments. We really like the return profile of Wealth Management and not only from a return perspective, but also what it does for our customers. Finally, what I'd say, Elyse, is we do this from a position of strength. We're ahead of plan this year. We've been disciplined with our spend, and this really gives us an opportunity to lean in to an area of strategic advantage for Voya.

And Elyse, it's Heather. Maybe two other points I would add to it is to be very specific. Our Wealth Management strategy is organic. We're not looking to do any type of roll-ups in the Wealth Management space, just given the high cost of inorganic options. And we think, as Mike mentioned, we've got a really clear path to be able to execute against that strategy.

And then my second question is just on Stop Loss, going in right to, I guess, 2026. Would you expect, just given pricing, et cetera, for -- would you expect that cohort to get be back at target margins?

So Elyse, let me just step back on Stop Loss, and I'll answer your question around just how we see 2026. So first, I'll mention that the reserve levels are firming up for the 2024 cohorts. That's especially true for January 2024, which we view as very close to complete. For the January 2025 cohort, we are now beginning to leverage claims experience to help inform reserve levels. Now this is different than the first and second quarter when we were really fully relying on the pricing, the risk selection to inform that 87% pick. With respect to what we're seeing in the claims experience, very consistent themes to last year, with respect to higher frequency related to cancer and younger ages. We continue to see that. Higher severity with cell and gene therapy drugs. We continue to see those elements as key drivers of claims.

Now I would note, and this affects kind of your question that we are actively leveraging the experience this year to inform underwriting in 2026. It's still very early in the claims cycle. I mentioned that in my remarks. Claims experience is consistent with our reserve levels. And again, the fourth quarter is really important as our credibility doubles heading into next year. And like the industry is seeing, we are continuing to see health care costs change at a rapid pace. But we also give you sensitivities to current reserve levels for the January 2025 cohort, 1% change in loss ratio is approximately $12 million. So at least as we get deeper into the year, fourth quarter, we'll have a better sense of where we think things are for Jan '26. But importantly, while the health care backdrop is not different this year, perhaps even more challenged. What is different is the actions we have taken on pricing, the actions we've taken on risk selection and how we are reserving for this product line throughout 2025, and you should expect the same in the foreseeable future.

Our next question is from Joel Hurwitz with Dowling & Partners.

I wanted to follow up on Stop Loss there, Mike. Any way you could quantify how much reserves are left on the 2024 block? And then in terms of the January '25 block, any way you could actually quantify the incurred claims experience through the first 9 months relative to where the January '24 block was running at the same period of time?

Joel, yes. And just like I was saying, we're pretty close to complete in January 2024. Possible, obviously, the claims can be reported late in the cycle. So we'll be patient around that. With respect to just how we're seeing experience in 2025 relative to 2024, we are seeing modestly better claims experience in January '25 versus where we were in January '24 through October. But I would just be incredibly clear that we really need to see the fourth quarter. We've only got about 1/3 of the experience coming in at this point. And so -- while we are encouraged by that, we really want to see the next 1/3 of that experience come in. And frankly, we'll want to see the first quarter as well to get a sense of where this is ultimately going to land.

All right. Got you. That's helpful. And then back to Wealth Management. I appreciate the color on the expected investment spend in the '26 retirement margin outlook. But I guess any more color you can provide on the expected revenue contributions from that business and how you're projecting that to emerge over time?

Joel, it's Heather. Let me start and then I'll toss it to Jay. We think that '26 is going to be a bit more of a build as we're hiring the advisers and investing in technology. And I would expect think about the revenue emerging, growing in '27 and beyond, again, we're going to come back and give more specifics as we look into '26. But let me turn it to Jay to talk a little bit more -- give you a little more color about exactly what we're doing in Wealth Management.

It's great. Joel, thanks for the question. Just as a step back, if you think about our Wealth Management business today, it's focused on the Workplace, very much aligned to our Workplace strategy, where we're serving close to 20 million customers today. But we're scaling from a strong foundation, as you heard in some of the earlier comments, we currently have 500 advisers. Most of those advisers, Joel, are focused on the strong tax-exempt business we have, but we see an additional opportunity to serve our growing large corporate customers. The demand right now that we're seeing in the -- with financial planning advice in the Workplace is outpacing supply. So we see that our approach is very much complementary to the advice that our intermediaries are providing today. There is a gap in between the supply and the demand. And so the focus for us remains on hiring additional field and phone-based advisers. We're currently enhancing our technology capabilities, specifically to support our adviser platform.

We are working on a customer digital self-service platform and the needs to support our growing segment of customers that are looking to self-direct. And we're partnering with Matt's Investment Management business to deliver a comprehensive suite of retail products. But over the last 9 months, you've seen I've recruited a really highly experienced leadership team. And right now, they're modernizing the operating environment to ensure that we're built for scale.

Heather mentioned the wealth management hub in Boston, we're finding a lot of count rich wealth management resources in that area, and we're recruiting advisers specifically given our leading position as a Workplace provider of retirement and employee benefit solutions. But Heather mentioned in the opening remarks, we're already seeing 20% growth year-over-year in sales. Our retail AUM numbers at $35 billion or up from $31 billion last year. But we're going to remain focused on accelerating growth in this Wealth Management business. There is tight alignment with Amy's Retirement business, Andrew's Employee Benefits business and working with Matt and Voya investment management, more to come on where we're seeing growth in terms of specific numbers for next year, but really happy with the development so far.

Our next question is from Ryan Krueger with KBW.

Can you give some more color on the higher corporate expenses in both the third quarter and the fourth quarter? I know you cited performance-related compensation for the fourth quarter, but I guess I was a bit surprised by the magnitude of that for the size of your company. So -- and I guess just related to that, is the prior run rate corporate loss that you had talked about still a good expectation beyond this year? And is this really more of a onetime impact?

Ryan, it's Mike. So maybe first, I would say that we are having a strong year. You can see that in the results in the first, second and third quarter. And frankly, that is the key driver when you look at third to fourth quarter, we are expecting that incentive compensation accruals will be higher in the fourth quarter due to that strong performance. The only other piece I would call out is that in the second half of this year, you're seeing a little bit more interest expense related to the PCAPs. And I think, Ryan, you're pretty familiar with preferred stock dividends that go up and down each quarter. So beyond that, nothing different to call out from corporate. Obviously, next year, we'll reset targets, and we'll get back to a normal run rate on corporate and we'll see how the performance plays out.

Okay. And then on inorganic, are you mostly interested in things that would be similar in nature to the OneAmerica deal? Or is -- I guess, is your interest broader and would span across all of your businesses potentially?

Yes, Ryan, it's Heather. Thanks for the question. Yes, for inorganic, we're really targeting additional roll-up retirement opportunities. We think that OneAmerica has turned out very, very well, highly accretive for us. And as you heard us talk about in our comments, exceeding the revenue and earnings expectations for the year. So we are most attracted to additional retirement rollouts that we can integrate. It also links very nicely to the Wealth Management opportunity that Jay talked about is, as we continue to grow our participant base and AUM and retirement, it creates a larger base of customers from which we can expand Wealth Management. And we are also looking for retirement books to potentially have a general account or more full service profile that also allow us to leverage the complementary nature of our business, where if we can grow with general account assets, it allows us to leverage mass investment management capabilities. And so just really takes advantage of the complementary nature of our businesses.

Our next question is from Tom Gallagher with Evercore ISI.

A couple of questions on the Wealth business. So for the additional spend in '26, is the hiring there? I heard the comment about hiring advisers. Is that advisers to support your DC plans more like customer service orientation? Or are we talking about hiring advisers to capture rollovers? So is this like a servicing question? Or is it capturing of rollovers? How should we think about that? That's my first question.

Sure, Tom. Thanks for the question. I think the way you should think about this is both our Retirement and our Employee Benefits business, the plan sponsors and employers today, they see a gap in terms of the financial advice that their employees and participants are getting to be able to save for retirement, whether it be their financial or health-related needs. And so there's a gap right now. And we have been in active conversations with those plan sponsors and those employers. And so you should think about this in two ways. One, we're going to bring field-based advisers to the Workplace. We're going to provide financial advice seminars. Those seminars are going to produce interest from our active participants and employees. And from there, our segmentation strategy continues. There's going to be a portion of our customer base, who doesn't have a sophisticated financial plan that's going to result in a need to talk to a face-to-face adviser, our sales desk is going to be there to support them, credentialed licensed, team-based advisers.

We're also building a digital cell service engine, where our -- there's a segment of our customer base that wants a self-direct -- self-direct brokerage, move cash. So you should think about this in terms of proactively covering our customer base and reactively covering the calls that are going to be generated from our continued advancement in our product suite and our distribution breadth. Again, very complementary to the intermediary relationships that are in market today, providing that support. There's just a big gap.

More to come as we build, but you should think about this very much in heavy recruiting. We're not going out and buying teams of advisers. We're having and finding a lot of success organically recruiting advisers in the field, and we're finding a tremendous amount of success in Boston and recruiting a sales desk.

Yes. And Tom, maybe just to explicitly answer your questions, we do see rollovers as an important opportunity for this strategy. We've talked about today within our tax-exempt business, where we have close to 500 advisers. We have a very successful rollover recapture rate in that business of between 15% and 20%. So really this build-out is to be able to serve the broader clients across both retirement and employee benefits. But we do see improvements in rollovers as a key metric.

And then just a follow-up. The -- so the shock lapses from OneAmerica, I saw the guide for Q4. How do you think about that heading into '26? Are we going to see some continued spill over, maybe somewhat higher surrender activity? Or how do you see that trending?

Yes, sure. Again, I appreciate the question. OneAmerica right now, it's delivering a higher revenue and earnings and it's contributing overall our cash generation. The integration you think about for OneAmerica will be complete in the first half of '26. So to answer your direct question, OneAmerica, today, our flows reflect anticipated lapses from the OneAmerica book, as well as we're seeing strong equity markets, and that tends to lead to an increase in account values, which then leads to elevated surrenders.

Importantly, if you think about the total DC book, full service and overall retention really sits into the 90s, high 90s for full service and in the 90s for the overall book. So the activity remains constructive for the remainder of the year and just getting back to OneAmerica really reflecting in line what our anticipated lapses would be through the integration.

Our next question is from Suneet Kamath with Jefferies.

I wanted to start on the capital return in the $100 million to $150 million guide per quarter for '26. Should we view that as sort of '26 stand-alone and then we kind of bump up in '27 as you don't have the Wealth Management investment anymore, and then you don't have the OneAmerica [ 160 ] payment? Or are you signaling that this is more of a run rate that we should expect going forward?

Suneet, it's Mike. No, we're not trying to signal that, that's a run rate beyond 2026. This is really how we're thinking about 2026. And it's considering a handful of things. We come out of the third quarter with $350 million of excess capital. As a reminder, we do have an earnout OneAmerica and we entered the fourth quarter well positioned to handle that in the middle of next year. As Heather talked about, we have an opportunity now where we are with the integration with OneAmerica to kind of lift our heads up and say, "Hey, are there other roll-ups out there that meet our return thresholds?" But we have flexibility. We're guiding to consistent and measured share repurchases this year. We think that's the right outcome. And when we look at 2025, we see that as a great example of when we're using excess capital in a balanced way. It enhances shareholder returns that we see the same opportunity in '26. We just talked about Wealth Management. You should expect us to be very disciplined in how we approach that. Investments must meet our return thresholds. And frankly, we have a higher bar based on where we're trading right now.

Yes. And Suneet, maybe two points I would add to Mike's comments is, we think we've got a very clear enterprise growth strategy that's going to allow us to drive profitable long-term growth across our businesses in the coming years as well as ongoing growth in cash generation, which gives us flexibility in terms of how we think about deploying it. But we do believe it's important to be able to provide consistency shareholders in terms of what to expect for '26.

Okay. Got it. And my second question, I guess, is maybe more of an observation than a question. But when I hear you talk about a Wealth Management strategy that's built around seminars at companies, it takes me back to one of your competitors a couple of years ago that talked about this from a financial wellness perspective and spent like half an Investor Day on it. And it they don't really talk about it anymore. It didn't really turn into much of anything. So I guess it's important that we get metrics at some point, and I'm sure you'll give them to us, but just wanted to highlight this, that kind of show the progress that you're making against this, especially if the spend is $75 million a year and potentially higher going forward. So I just wanted to put that out there.

Yes, Suneet, thank you. We appreciate the feedback. And that certainly is our intention is we want to be able to provide clear progress on how we're measuring success. That's why we wanted to point to some of the revenue growth we're seeing year-over-year just in terms of the sales. But we hear you loud and clear. And I think maybe what's different for us is this is from an established base. When we talk about the $35 billion of assets under management today is contributing roughly 10% of our retirement revenues and growing. And so again, here you loud and clear, and you can certainly expect to see some proof points from us.

Our next question is from Alex Scott with Barclays.

I wanted to follow up on some of the investments. I know you're talking about some of the wealth advisers you're bringing on, but I think you also mentioned that there's some investment in technology. I just wanted to understand how we should think about the impact of these things on the operating margin in retirement business or elsewhere if it goes in other segments?

Yes. Let me let -- Alex, I'll let Mike take the impact on operating margin and Jay can talk a little bit more explicitly about the investments.

Yes, Alex, we're giving a sense right now. And I just would emphasize that we see this as an opportunity where we're doing that from a position of strength given the results, not only just in retirement, but across the board at Voya. We did mention that we expect this to be approximately a 200 basis point implication on margins next year. However, we're right in the middle of our budget season. And so we'll be more precise with that as we get into next year. But that's high-level thinking and very consistent with what I shared earlier in the Q&A with respect to how much we expect to deploy both from a capital perspective, but also from a GAAP perspective.

Sure, Alex. Maybe just as a follow-up on the strategic nature of where those investments are going. We've upgraded our advisory platform, our wealth path, which we've rolled out in October. And that's really to help our advisers really help them from the perspective of account openings all the way through the financial planning tools that they're using. It's really helping to modernize that environment to connect to more customers and do it in a more automated basis.

Secondly, reference to digital self-service. We've got a growing portion of our customer base that wants to self-direct. And so we're going to meet that growing need, particularly with wealth transfer is going. There's a segment of our population, our customer base that's going to inherit a tremendous amount of wealth over the next decade, and we want to be positioned to ensure that they can direct and have a financial planning environment that works for them. So these tools are going to be helpful as we grow into that customer base as well, but very targeted.

Got it. And then maybe if I could pivot over to employee benefits. Could you talk about top line implications from just the lead management rollout. And maybe anything on Benefitfocus, I think just around open enrollment period, would be interested if that's going to have any influence on top line?

Sure. Maybe I'll start on for your first question. So appreciate the question. We're on plan right now to deliver the lease technology as well as a fit-for-purpose operating model supporting a Jan '26 launch. What we're developing right now is a full-service lead product suite. It's going to help build a moat around our other employee benefits business. As you think about this today, this is a critically important capability in the market, and it's leading to a ton of growth. In last quarter Q3, over 50% of all of our RFPs that came in were requiring a lead management bundled solution. So we're really encouraged with the commercial momentum.

In fact, one of the key metrics that we look is getting on the panels of our brokers, and we've been successful in getting on most of our broker panels, and it's led to sales that have already occurred for -- '26. So today, if you think in terms of where we are in happy with where the build is on the technology side, our operating model is in place, and we're getting commercial momentum in terms of our sales.

Maybe on Benefitfocus, we like the strategic capability of Benefitfocus. I mean, it fits really well into the broader employee benefits business. Specifically, as we deliver on our capability road map, Andrew and team are driving efficiencies and are focusing on margin expansion while they do that. Two areas of growth you should think about for Benefitfocus. One is in ICRA. The health plan business side of our Benefitfocus is going to benefit from some of the health care legislative environment that's changing, particularly around ICRA. We've got a plan to go after that market. We're set up well. And in '26, we should be executing against that.

We also see direct synergies with our Benefits Administration business. So -- if you think about that tied to wealth management, we've got a growing customer demand for retail financial advice, and this is going to be another area of synergy for our Wealth Management business. So ICRA and Wealth Management on the top line with efficiencies that we've been building over the course of the last couple of years in Benefitfocus.

Our next question is from Wes Carmichael with Autonomous Research.

First question on Investment Management. And just looking at institutional, I think flows pretty strong in the quarter and maybe a little bit of elevation on the outflow side, but just hoping you could unpack what you saw in the quarter? And maybe any help on the outlook for flows going forward would be helpful.

Yes, Wes, this is Matt. Thanks for the question. Overarching, we like the breadth of flows we've seen across the channels and products for the year. The year-to-date flows, as Mike referenced, $13.4 billion, roughly 4% organic growth rate. Within institutional, $9.7 billion of that on the year, and that's driven by the Insurance business, CLOs, public and private fixed income doing well, also private equity secondaries. So we like the breadth within institutional year-to-date 3.7 in retail. And again, income and growth franchise and multi-asset in the U.S. So we like the breadth.

Within the quarter specifically and more to your direct question, the $3.9 billion number in the third quarter, very happy with another strong quarter. And institutional, the majority of that $3.6 million, driven by a few large insurance wins. So it's a bit more concentrated in the quarter, but I think important to hear that within the construct of the broader year flows.

You're right. It's a good call out the higher level of activity in Institutional, you see in the supplement. We're very happy with the $3.6 billion net. You've got more wins, and you've had some more outflows. Some of those outflows are tied to natural maturities in our CLO business, bank loan mandates as well as end of life in private funds. And there's also some rotation in international equities out of one style into another. So you do see that higher amount of in and out. But again, the net very happy with the $3.6 billion on the quarter. And then looking forward, in the fourth quarter, we expect those to be more muted than the strong third quarter after some strong realizations in the third quarter.

Longer term, we see no reason to pivot away from that 2-plus percent longer-term organic growth rate assumption and we like the commercial momentum we have in the business. And I view it as a testament to the strong investment performance that we've called out 74% outperformance Republic strategies over 5 and a really strong 84% over 10. We're delivering for our clients and growth is the outcome of that.

Our next question is from Wilma Burdis with Raymond James.

Could you quantify Voya's floating rate exposure? I know that, that's something that could impact earnings a little bit in 4Q with the rate cuts. So if you could just help us with that.

It's Mike. So just when we think about floaters, a little less than $1.5 billion of floaters. That's embedded in the overall sensitivity that we share in the investor presentation. So maybe a modest impact we would expect from the effect of the short end coming down. We do -- when we do think about our sensitivities, I would call out that the net effect for Voya is smaller to a shot down in the yield curve as we have offsets in the investment management business related to fixed income asset levels. And I'd also say, like this sensitivities went up a little bit this year. We talked about that in Q1 with the acquisition of OneAmerica, but the team is doing a nice job of actively managing the general account. And I think that's helped us to kind of stabilize what is kind of the raw effect of what's happening with rates.

Okay. And then do you expect any additional reinsurance recoverables on Stop Loss to flow through over the coming quarters? And maybe just talk about the likelihood and timing of that.

Wilma, it's Mike again. Yes, so this is a bit of a idiosyncratic quarter with respect to us calling that out. It's a natural part of the Stop Loss business. We've talked about the fact that from a deductible perspective, we usually kick in the $200,000 to $300,000 range. We'll cover our clients. And then we have excess loss reinsurance above $5 million. And that -- and that's where we saw a kick in from our reinsurer that really was the only effect in the quarter. And so I wouldn't expect that if you're looking at necessarily forward-looking expectations on loss ratios, if there's something significant in a quarter, we're going to call it out, but I wouldn't use that as anything that would be sustainable per se and the outlook for Stop Loss.

Our next question is from Kenneth Lee with RBC Capital Markets.

Just one for me. Within the general account portfolio, I wonder if you could just remind us again what's within the private credit allocation sleeve there?

Ken, yes, it's Matt. Let me unpack that a little bit for you. So overall, the portfolio continues to be very high quality. And we continue to include a slide in the deck, it's Page 27, breaking down the quality of the portfolio. Importantly, 96% of the general account is investment grade. And private credit as 23% of that, of course, has a heavy bias towards investment grade as well, that's 94%. We provided a footnote on that page to give you some further detail there. So NAIC-1s and 2s, 94% of portfolio. Think about those as driving that 50 to 100 basis point yield advantage versus public. So over a long period of time with roughly double recoveries driven by stronger covenants should there be any credit issues.

I mean overall, I think credit markets are performing quite well. As you can see, credit markets are near all-time tights. The term private credit has gotten a lot of attention, as you referenced, but that covers a broad array. And our portfolio is heavily focused on the investment-grade lending area. And this area is, of course, not new to the insurance industry, not new to us. And one that has generated very attractive yields with less downside risk over multiple decades. And so very different than some of the headline news you'll see around bank lending. Syndicated loans or middle market lending, it's a different market segment, and we feel very well positioned with how the portfolio is performing.

Our final question is from John Barnidge with Piper Sandler.

And my first question, could you talk about the Edward Jones partnership that was mentioned earlier this year, success so far in plans for ahead?

Yes, we'll have Jay take that, and it continues to be one of the other important attributes of OneAmerica, which as we've talked about, John, has been just a great integration and opportunity for us to generate value. But Jay?

Great. Appreciate the question, John. If you think about that OneAmerica acquisition, as Heather said, it's not only producing strong earnings and revenue, but the distribution relationships that came along with that business it really is a key value-creating lever for our team. And so Edward Jones is an example of that. Right now, we remain on track for the Edward Jones relationship as we head into '26. So specifically, we're working with Edward Jones right now on the migration of the OneAmerica book of business. Our distribution agreement was executed earlier this year, and we're finalizing key technology connections in order to support the full integration.

Our teams from a distribution perspective are actively engaging with each other on market opportunities. Edward Jones sent a press release out on the partnership a few weeks ago. And their advisers are going to be able to offer our full suite of retirement plan tools and services to their clients starting in early fiscal year '26. So if you think about where we are, we're on plan with that. Again, one of the positives we see in these opportunities in retirement roll-ups isn't just the earnings and revenue associated to the existing book, but it's the new distribution opportunities that we acquire as part of that relationship. And this is a great example of that.

My next question you talk about the Blue out partnership plans for product launch and if there are additional alternative asset managers with which you could partner?

Yes, John, maybe just a quick frame before I toss it to both Jay and Matt. But we think this Bull partnership is just one of the many examples of where we can really unlock the synergistic opportunities that exist across our businesses, specifically when we think about Retirement, Wealth Management and Investment Management. But -- Jay?

Sure. Again, thanks for the question, John. Maybe just to continue with what Heather was saying. Matt and I, we're going to be leveraging partnerships going forward as we think about our growth strategy this Blue aisle partnership is going to be a key contributor to that growth. Specifically, our teams are trying to access private investments and innovative solutions to drive retirement outcomes. That's going to be in the DC space. So that's the focus right now on the private investments in innovative solutions. Specifically, we're going to be in market with private credit, alternative credit and nontraded REIT CITs by the end of this year. We're going to start with our AMA business, and we're seeing a ton of interest right now from RIA firms in different pockets, specifically many of them are waiting for where the DOL rule making has happened. And if you know, John, the two areas, the two gates we've got to get through right now. One is on the DOL side, on their rulemaking. And the second is the safe harbor protections that are going to help accelerate the adoption by plan sponsors as the fiduciary.

I'm going to turn it over to Matt to give a little bit more color on how his investment management business is partnering with Blue But right now, the partnership is on plan for end-of-year rollout.

Yes, John, thanks for the question. Just to build on that a bit, we continue within investment management to work on target date products built from our leading multi-asset team with long and strong track records have been driving our model portfolio growth that we've seen over recent years. And we believe our capabilities pair very nicely with Blue aisle capabilities in their broad array of complementary private strategies.

Importantly, as we build these target date products, the focus is on risk-adjusted returns for our clients as well as attractive returns, net fees. And so we build that product out in partnership with Blue for the second quarter of 2026 time frame for those to come to market, still looking for some clarity on the regulatory side. We do think this is an attractive path forward. And just to expand a bit, you mentioned other private components. We're working with Blue There will be other providers within the structure as well to round out the complete need. We're very excited about Voya and Blue capabilities. We'll supplement that as needed, as we always do in multi-manager products with other partners. And the beyond the DC space, we're very excited about how this ties to our insurance business where we bring our own capabilities as well as those partners like Blue to our broad institutional customer base. So that's a way to think about the growth as well.

Thank you. We 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.

Good morning. Welcome to Voya Financial's Second Quarter 2025 Earnings Call. [Operator Instructions] Please note this event is being recorded. I'd now like to turn the conference over to Mei Ni Chu, Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining us this morning at Voya Financial's Second Quarter 2025 Earnings Conference Call. As a reminder, materials for today's call are available on our website at investors.voya.com. We will begin with prepared remarks by Heather Lavallee, our Chief Executive Officer; and Mike Katz, our Chief Financial Officer. Following their prepared remarks, we will take your questions. I'm also joined on this call by the Heads of our businesses, specifically Jay Kuduson, CEO of Workplace Solutions; and Matt Toms, CEO of Investment Management.

Turning to our earnings presentation materials that are available on our website. Slide 2 will have some comments during today's discussion that may contain forward-looking statements and refer to certain non-GAAP financial measures within the meaning of federal securities law. GAAP reconciliations are available in our press release and financial supplement found on our Investor Relations website. And now I will turn the call over to Heather.

Thank you, Mei Ni. Good morning, and thank you for joining us today. Let's turn to Slide 4. In the first half of the year, our business model has proven its strength, driven by disciplined execution and our commitment to helping customers navigate a dynamic macro environment. Our retirement and investment management businesses are delivering attractive returns, reinforcing the value of our integrated approach to serving our clients. And in Employee Benefits, we continue to make progress on margin improvement, moving toward the levels of performance that have historically defined this business.

We are operating from a position of strength with solid capital and liquidity positions to give us the flexibility to invest in growth, while maintaining a healthy balance sheet. This foundation enables us to deliver long-term value positioning Voya not just for today's environment, but for the growth opportunities ahead.

Turning to Slide 5 for highlights from the quarter. Before commenting on our results, I want to share an important update in how we describe our workplace businesses. We're returning to our prior segment names with retirement and employee benefits replacing wealth solutions and health solutions, respectively. These industry aligned names better reflect the services and solutions Voya provides today. Moving to our results. We're encouraged by another solid quarter of performance across our businesses with strong contributions from each of our core segments.

In the second quarter, we achieved a major milestone surpassing $1 trillion in total assets across our Retirement and Investment Management businesses, and we're now approaching nearly 10 million participant accounts in retirement alone. This accomplishment reflects the trust we have earned from our customers and the value proposition our integrated model provides.

In Retirement, we delivered another strong quarter generating approximately $12 billion in total defined contribution net flows. Year-to-date, we have increased overall assets by more than $100 billion, including $40 billion in organic flows and $60 billion in assets onboarded from OneAmerica.

Investment Management generated approximately $2 billion in net flows in the second quarter, continuing a trend of positive organic growth. We continue to see momentum across both institutional and retail channels. In particular, strong demand for public and private fixed income solutions reinforces our leadership in insurance asset management, strong investment performance, platform breadth and diversified client base continue to differentiate Voya Investment Management.

Beyond these strong financial results, we continue to advance our strategy this quarter by driving greater value for our customers. We partnered with Blue Owl Capital to meet rising demand for private market access, leveraging complementary capabilities, across our Investment Management and Retirement businesses. This expands our retirement offering and helps plan sponsors and participants pursue stronger outcomes through broader investment choice.

The OneAmerica integration remains on track. We're delivering on our full year target of $75 million in operating earnings, while deepening relationships with new customers. In addition, we have announced a new selling agreement with Edward Jones. This partnership opens the door to future growth through one of the country's largest adviser networks. It reinforced the strategic value of the OneAmerica acquisition and our ability to meet the needs of our plan sponsors.

In Employee Benefits, we're making steady progress with in-sourcing lead management. Our expanded lead capabilities help to solve an increasingly complex issues for employers. This enhancement, combined with the breadth of our benefit offerings, strengthens our competitive position in delivering bundled solutions for employers. In stop-loss, we saw another quarter of positive claims development, and we remain focused on improving margins. We are encouraged by our performance in the quarter. We will continue to focus on executing on our near-term priorities and are optimistic about our growth opportunities ahead.

With that, I'll turn it over to Mike to walk through the financials in more detail. Mike?

Thank you, Heather. Let's turn to our financial results on Slide 7. We generated adjusted operating earnings per share of $2.46 in the second quarter, a 13% increase over the prior year. This result reflects the progress we are making on our near-term strategic priorities, including improving margins and stop loss, strong commercial momentum and integrating OneAmerica.

Net income was impacted by investment losses and severance expenses. However, cash generation is still ahead of plan. We incurred $18 million of severance expenses in the quarter. These actions are an outcome of the reallocation of resources to our strategy. As we look to the second half of this year, we will balance ensuring we are achieving our financial targets, while accelerating future profitable growth. We added approximately $200 million of excess capital in the quarter and have generated approximately $400 million year-to-date. With that, let me turn to our segment results.

Turning to Retirement on Slide 8. Second quarter was highlighted by continued commercial momentum, driving further organic growth and higher earnings. We continue to make progress integrating OneAmerica which has us approaching nearly 10 million participant accounts across retirement. Retirement generated $235 million of adjusted operating earnings in the quarter and over $860 million in the last 12 months. This represents an increase of 10% and 19%, respectively, over the prior year.

Higher net revenues were driven by growth in fee-based margins as our platform continues to attract new flows and gain scale. Spread-based revenues also remained resilient in the quarter due to improved portfolio yields and higher participant fund transfers into the general account. We generated approximately $12 billion of total defined contribution net inflows in the second quarter, bringing our total year-to-date net flows to over $40 billion.

The strong commercial result includes positive full-service net flows before OneAmerica and strong success in the large market, including a large recordkeeping win in the quarter. Looking ahead, we expect outflows in the third quarter driven by a large planned surrender and recordkeeping.

Having said that, we are on pace for one of our strongest years, growing our total defined contribution assets by more than $100 billion in the first half of 2025 while maintaining strong margins.

Turning to Investment Management on Slide 9. The second quarter demonstrated strong organic growth and favorable financial performance. Adjusted operating earnings were $51 million for the quarter and $214 million over the last 12 months. This represents an increase of 2% and 15%, respectively, over the prior year. Our diversified platform, scale and breadth of product offerings continue to drive organic growth at strong margins. We generated second quarter net inflows of approximately $2 billion, contributing to year-to-date net flows of nearly $10 billion.

Our institutional business generates strong and steady demand for our suite of public and private fixed income solutions. These solutions continue to strengthen our leadership position, including key strategic focus areas such as insurance asset management. Our retail net flows contributed nearly half the net inflows in the quarter, and approximately 1/3 year-to-date. We are encouraged by the momentum across both domestic and international retail channels.

These results are an outcome of the experienced leadership team delivering strong investment outcomes for our clients. Turning to Employee Benefits on Slide 10. We continue to improve margins and employee benefits. Adjusted operating earnings for the segment were $69 million in the quarter, up 15% over the prior year quarter. We have lowered our expected loss ratio for the January 2024 cohort by 200 basis points to 91%. This was driven by claims experience in the second quarter.

This cohort is now over 95% complete and will be nearing completion in the third quarter. For our more recently priced January 2025 stop-loss cohort, we continue to hold reserves at an 87% loss ratio, no change from the first quarter.

As a reminder, it is early in the development of this cohort. Experience will be more credible later this year. In Group Life and voluntary favorable claims experience in the second quarter led to improved loss ratios. As we look forward, continued discipline in underwriting and risk selection remains our top priority. We continue to embed industry data and medical trends into our pricing while delivering a market-leading portfolio of benefit solutions for our customers.

Turning to Slide 11. Our balance sheet is well positioned and was strengthened by the approximately $200 million of excess capital we generated in the quarter. We returned over $40 million of capital to shareholders via common stock dividends and entered the third quarter with approximately $300 million of excess capital.

Turning to Slide 12. We've now generated approximately $400 million of capital year-to-date above our 90% target. The first half positions us well to achieve our plan to generate over $700 million of excess capital for the full year. In the third quarter, we will resume share repurchases targeting $200 million in the second half of 2025 as planned.

Looking forward, we are focused on executing our near-term priorities, generating consistent strong free cash flows and executing on our balanced approach to capital deployment, which maximizes shareholder value over the long term. I'll now turn it back to Heather.

Thanks, Mike. Turning to Slide 13. This quarter, we made meaningful progress on our priorities, delivering strong first half results across our businesses. Our priorities for the remainder of the year are unchanged, driving strong organic growth in Retirement and Investment Management, successfully integrating OneAmerica to drive higher earnings and meaningfully improving margins and employee benefits.

As we look ahead, we're executing with purpose, helping our customers achieve their goals while generating strong cash flow across our businesses. I want to thank our team for their continued focus and hard work. And with that, we'll turn the call over to the operator so we can take your questions.

[Operator Instructions] Our first question is from Elyse Greenspan with Wells Fargo. .

I guess my first question is on just the stop-loss business. I was hoping to just get some more color on just what led you to bring down the [ '24 block ], again, this quarter. Just how '25 is looking? And then is the expectation still that you guys would expect to get back to target loss ratios on that business in 2026?

Elyse, Mike will start and take your questions. .

.

Elyse, first,I'll just start by saying stop loss continues to be a high priority for Heather, myself, Jay, the entire management team. We continue to be laser-focused on the prudent actions we've been taking across reserves, pricing, risk selection, underwriting. You asked first about the January 2024 business. We did reduce the IBNR in the quarter, the reserve levels from 93% to 91% as a targeted loss ratio. And that's just simply based on the claims experience that came in the quarter.

So as we come out of the quarter, we believe 91% is the appropriate amount. You also asked about January 2025. What I would say on that is very, very early in the development of that cohort. We would estimate that it's approximately 15%, 15%, 15% complete. And so as we step back and we think about reserve levels going forward, it is a very uncertain backdrop in the health care industry.

And so as we approach the reserving, we're going to continue to take a prudent approach as we see that play out for the balance of this year. What we like about this business is it's annually renewable, which allows us to take decisive actions around [ rates, risk selection ] and the way that we're approaching the pricing is to get back to target loss ratios. And the last question you had, Elyse, do you still continue to expect it to be a 2-step process. That is our goal. We're coming out and trying to price every piece of business such that we get back to target margins. But again, we have this very cautious mindset heading into the fall. And I would just finish by saying the entire mindset of the entire team is that we're going to prioritize margin over growth.

And then my second question, I guess, is on capital. I know you reaffirmed the buyback view for the second half of the year. But then for '26, I think there's like $160 million that could be due to One America, not sure. It sounds like you guys are on track with that deal. So I guess, expectations would be that, that's paid out next year. Is that going to impact, I guess, '26 capital return? Or should we think of '26 being more in line with historical levels than 2025 in terms of share repurchase? .

Yes. No, makes sense. It makes sense. And look, we're going to -- we believe it's prudent to stay on plan for repurchases. We talked about $200 million in the second half. The capital we generated in the second quarter, the capital we've generated in the first half puts us in a good position to do just that. And then as you alluded to, we exit 2025 well positioned with sufficient capital to address OneAmerica and the earnout that's expected in the middle of next year. I would say just as a quick aside, OneAmerica fully on track. We hit that in the prepared remarks.

And as it relates to just next year, more to come on how we think about the deployment of capital, we come into it in a position with a balance sheet that's healthy, a balance sheet that's strong and businesses that continue to generate a lot of capital. And I would just finish by saying 2025 is a good example of balanced capital deployment. When we think about what we deployed and what we're executing both from an organic and inorganic perspective but then also finishing the year with the share repurchases that we signaled on the call.

Yes. And Elyse, it's Heather, if I can maybe just build a few points on Mike's comments. I'll reiterate, we're going to continue to take a balanced approach to capital as we think about '26, but we also expect to continue to drive higher cash flow generation heading into '26. A couple of things that I would point you to, to think about where -- what are the attractive investment options for us heading into '26, I'll point to 3 things.

First is continued investments in wealth management. We have some modest investments that are baked into our '25 targets around growing our field and phone-based advisers and building digital capabilities. We think that this is a really attractive growth area for us, given the growth and success we've had in the workplace business. We like the high-margin, high-growth opportunities within Wealth and are well positioned to build on the base.

Second, I would point to is retirement roll-ups. We're going to be opportunistic around this. You certainly can't predict inorganic. But we think that the OneAmerica, certainly, has been a terrific addition to growing our retirement business and very attractive for shareholders. And the third area that I would point to is investing in automation across the organization.

We're certainly going to take advantage of AI capabilities and to drive efficiencies that creates sleeves of spend that allows us to reinvest in higher growth areas. So I just want to reiterate the fact that we continue to see some really nice catalysts for growth heading into '26.

Our next question is from John Barnidge with Piper Sandler.

My first question, can you maybe talk about the Blue Owl partnership and opportunity, what it means for retirement? Do you anticipate maybe some co-branding of products as options?

Yes. Thanks, John. We'll do a combination of Jay and Matt will add some comments. .

Thanks, John, for the question. We're really excited about the Blue Owl partnership. When we think about what Matt and I and the IM team were able to develop through this partnership, really is a lot of mutuality of interest and we're on our front foot here.

This partnership, John, is going to let us expand the access to private investments, as you heard Heather open with. With that said, we are paying attention to the regulatory environment and any developments that may impact our business. Specifically, today, we're currently developing CITs that will soon be on the shelf. It's going to start with our adviser managed accounts and it's going to be embedded in our target date funds. So the Blue Owl partnership, it really does better position us to meet what I would say is an expanding need of our customers and plan sponsors.

but Matt, anything you'd build on?

Yes. No, I completely agree, Jay. We look forward to building products together for retirement plan participants. This will include within target date products where the combination of Voya's areas of the expertise pair very nicely with Blue Owl's broader and complementary private strategies. Our focus will be on risk-adjusted returns as well as attractive returns net of fees. That's critical for the outcomes for retirement plan participants. We think that will be a benefit to the entire space and open up the retirement landscape in a very beneficial manner for active managers.

We also look forward to opportunities within the insurance channel, where the breadth of our complementary capabilities and structuring capabilities really provide a differentiated value prop for our clients. So in sum, the early feedback from our clients is quite positive, and we look forward to building the partnership.

My follow-up question would be on the distribution partnership with Edward Jones. Will those products and the full product suite be available through that.

Yes. Thanks, John. So I'll just start. And this was one of the other attractive aspects of an OneAmerica, right? Not only did we see an opportunity to grow the revenues by $200 million, the earnings by $75 million, but we also talked about the attractive capabilities and the Edward Jones partnership being one of them, but I'll turn it to Jay to elaborate.

Great. John, thanks for the question. If you think about OneAmerica today, right, it accounts for about 10% of the retirement business and the contribution today is pretty consistent with that. And one of the big advantages that we saw with that acquisition was the partnership programs with certain key adviser firms like Edward Jones. We were successful in the second quarter in executing a selling agreement, and we like this relationship.

We think it's going to help us drive more full service sales. The partnership programs, you should think about them helping us expand our distribution footprint. And they really are going to be a key driver of growth for the retirement business. In the second quarter, I spent a lot of time with our intermediaries and plan sponsors that came to Voya through the OneAmerica transaction, and we continue to receive very positive feedback on Voya's products, our services, but more importantly, our people. As part of that transaction, we acquired some great people and relationship managers. And so the consistency and retention of those relationships, as you see in our numbers are starting to show themselves. So again, we'll come back as more of these distribution relationships get executed.

Our next question is from Tom Gallagher with Evercore ISI.

Just wanted to ask a few questions on medical stop loss. The -- now I know it's early in the 2025 accident year. But -- there were essentially 2 components, as I think about to improve the outcomes this year and into next year. One was re-underwriting the book and risk selection. And the second was just getting enough rate, broadly speaking, on the medical loss cost trend.

So I guess my question is, what are you -- what's the broader kind of macro development you're seeing so far? Because I assume you don't have enough seasoning on your own book, but you probably do have some inputs on medical loss cost trend more broadly, and that's probably informing your [ pick ] and why you left it at 87. So you're still seeing that same level of elevation in loss cost trend where you reinsure. That's question number one. And number two, how is the risk selection gone so far based on -- and maybe that's early, but I just want to get a sense for -- does it look like you got it right in terms of the the nonrenewed business versus that which you retained?

Thanks, Tom. We'll let Mike take your questions. .

Yes, Tom, look, first, I'd say, it is still uncertain out there. I think to what you're trying to drive at is how do we see ultimately what we price for materializing in the results. And when you're pricing, you're always taking a forward-looking approach. And maybe the one thing I would say that continues to give us the posture of making sure that we want to see this play out is that we expect first dollar medical inflation to increase in 2026 relative to 2025.

We continue to feel good about what we did heading into January 2025. You hit the 2 pieces where we were very prudent around the rate that we went after. We were very prudent around underwriting and risk selection, but it's just too early. I think we'll have a better sense of where 2025 ultimately lands later this year. You should think fourth quarter is kind of the first key moment where we're going to be approximately 2/3, maybe 70% complete.

So we'll have a much better sense. But there's a lot of noise, as you know, Tom, in the health care arena. And I think right now, it's just too early to signal anything different than what we have up.

Got you. And Mike, anything on the risk selection because I think there that was more unique to Voya, not so much of a broader market issue. Do you feel like the initial indications on the changes in the business you lost, is playing out as you thought? Or any color or light you could shed on that?

Yes. And Tom, you're alluding to the point that we made around known claims being a piece of what drove the unfavorable experience last year. And just for those not close to this, that's where you ultimately would see a claim from a prior year, maybe younger cancer, where the opportunity for that to continue into the next calendar year is higher. That was absolutely a focus with the underwriting teams going into the year, but they're still when you think about cell and gene therapy drugs, when you think about younger cancer still being kind of an area of higher frequency, we continue to feel that the 87% is the appropriate level for January 2025.

Yes. And Tom, if I can add, it's Heather, I think the punchline on stop loss is we're making meaningful progress, but we're not taking our eye off the ball. As you think about what's going on in the broader landscape, some of the things we're paying attention to, this is more going into the [ 1126 ] pricing season.

It Is just what's going on with first dollar expenses, what we're seeing in trend on high dollar drugs as well as paying attention to provider billing and just seeing if that has any impact on [ 1126 ] pricing. And what I would reinforce that Mike talked about earlier is that going into the [ 1126 ] pricing season, we are assuming that medical trend is going to be higher than we had assumed it a year prior. And so that's why, Jay, Mike, our entire teams, we're continuing to focus in on the discipline of margin improvement over any type of premium growth and really the alignment between our underwriting pricing and sales teams.

Our next question is from Ryan Krueger with KBW.

I had 2 questions on the voluntary benefits business. First was on the loss ratio. It improved to 47% in the quarter. Are you still expecting more around 50% in the back half of the year at this point?

Ryan, yes, I think that's the base case at least for the third quarter. As you alluded to, we did have favorable claims experience in the quarter. We talked about last quarter that we're adding additional reserves to the tune of 150 to 200 basis points per quarter in advance of the fourth quarter where we see seasonality for voluntary. So we're obviously happy with the favorable claims experience in the second quarter, but no change to outlook in the third quarter and then we'll have a better sense where this ultimately lands at the end of the year.

And then related to this, could you give a little bit more color on what's driving the decline in voluntary premiums this year, previously had free strong [indiscernible].

Ryan, can you repeat the question? You broke up a bit there.

Apologies. I was just asking about why the voluntary premiums are declining this year compared to the strong growth you had over a number of prior years?

Yes. We'll let Jay take your question. Thanks for clarifying. .

Thanks, Ryan. If you think about 2024, Ryan, sales finished really strong it was due to a number of a few jumbo cases. And you should think about top line is actually trending really well for the full year '25. In addition to that, our ability now to bundle in-source leave solutions sets us up well for [ 1126 ]. That was always a desire in that leave investment is our ability to bundle leave.

If you think about with leave today and other voluntary products, when you think about group and voluntary and self-health, 50% of those cases are now getting bundled with leave. And so as we think about the overall voluntary business, that leave solution will help us get access to more RFPs. This has been a deliberate strategy to drive member engagement as you think about this with our members and customer retentions for the long term. So always balancing, Ryan, this kind of driving consumer value with the cost of servicing claims, particularly as utilization increases, but we are a market leader.

We're a top 3 provider for voluntary with 10% market share. And maybe just in closing, we've taken deliberate steps to align the product performance with customer value and market expectations, specifically a couple of areas. We've upgraded in-force blocks. We've enhanced the benefits and we've improved the admin experiences to actually ensure that the members are using what they buy. When customers see early value, they stay longer as groups stay longer with 3-plus years, we see participation rates double. So it's going to be a solid '25.

Our next question is from Wilma Burdis with Raymond James.

Some of the other alternative asset managers have cited that the 401(k) landscape is going to change dramatically in the near term. Could you go into a little bit more detail on how you're offering with Blue Owl work for the customer and the types of products you hope to develop in the future? And additionally, would you expand your -- with other alt managers.

Yes. Thanks, Wilma. We'll let Matt elaborate. But really, we think this is something that everything we do is really intended to drive participant outcomes and breadth of offerings. And so we think this is just yet another example of how we can give access to private markets to our participants who just historically have not had it. But let me let Matt get into a little bit more of the technical. .

Yes. Thanks, Wilma. There is a regulatory component to this that you see, obviously, in the new paper every day. So ultimately, plan sponsors have to make choices about what they offer. Our announcement with the Blue Owl is that we're going to work with Blue Owl who is a highly regarded partner to build solutions that we think importantly, provide strong risk-adjusted returns for plan participants as well as strong and attractive returns net of fees.

So now those concepts are a little different than what you hear in the retirement space today, which is lowest fee passive regulatory or legal uncertainty. So this conversation will happen through the industry over the coming quarters and years. I wouldn't anticipate this to be incredibly fast. But as you see that standing up products such as target dates that could include a broader array of active and private solutions makes a lot of sense. We'll provide better outcomes for clients and our complementary capabilities within Voya Investment Management in Blue Owl, I think is a fantastic platform to build from.

To your second question, will there be other providers naturally on a platform the size of ours, you're going to have an array of providers, but we look forward to working specifically with Blue Owl to deliver products and design products, co-create products we're excited about.

Okay. And then how are you thinking about the fees and the economic split on these types of products given the sensitivity you just mentioned to a few levels in 401(k)?

Ultimately, it's much like any active management. The way I'd frame it is active management needs to provide a value proposition beyond the fees that are embedded. So still much to be determined. I think of [ CITs ] as being the cornerstone and the vehicle of choice within the retirement landscape because of its lower fee access points. So that fee component, the expense component will work closely on. These products aren't in launch yet, but we'll be working towards that. And I would tell you, the entire industry will be looking at making sure that you have these long-term investments oriented towards a net fee return that's attractive. So stay tuned, but really no different than the active investment management more broadly. .

Our next question is from Suneet Kamath with Jefferies. .

I wanted to go back to stop loss for a second, and I appreciate the color that you gave. Just on the medical cost trend, I guess I just want to clarify, is what you're seeing in terms of the cost trends year-to-date. Consistent with what you assumed in your January 2025 pricing, meaning step one, because it seems to me that a lot of health insurers are seeing an escalation in severity and frequency, which perhaps they did not anticipate, which is surprising investors. So I just wanted to get a sense of how things are playing out versus what you built into pricing.

We'll let Mike take your question.

I'm very consistent with what I was sharing with Tom earlier. We continue to approach 2025 with that uncertain and kind of cautious view given everything that's happening with the health care industry. As it relates to what we price for, what we underwrote, we came into the year feeling good about that. I think as I mentioned earlier, we're still only 15% 1-5 through. So it's -- I think it's way too early for us to get much deeper into how we see claims ultimately playing out for the year. But I would say in the same breath that we put up 87%. That's our best estimate right now.

And as we get deeper in the year, we'll continue to update you with respect to how this plays out. As Heather mentioned just a moment ago and I shared earlier, we continue to think as we move into the fall that first dollar medical moves up, we are working with advisers. We are partnering with everyone that we can to make sure we have the best thinking around that, whether it's cell and gene or what might happen with cancer in younger ages and making sure we have the best thinking around that. But again, this is something that we'll continue to update you in the fall. And as I said earlier, we'll have a better sense ultimately where this 2025 block is heading in late third quarter, fourth quarter. .

Okay. Sorry for the repeat question. And then I guess on retirement, can you just talk a little bit about what you're seeing at the planned participant level in terms of withdrawals? And maybe an update, I think, on prior calls, you've talked about strategies to retain more assets at retirement -- point of retirement. So just an update there would be helpful as well.

Yes. We'll let Jay take your question. We have seen some improvement. And we've also -- as we've talked about on prior calls, has been working on some product development to be able to retain more of those assets. But Jay?

Yes. Great. Appreciate the question, Suneet. If you think about retention, we feel really good about where we're retaining, whether it be in the OneAmerica at the 90% level that we talked about, full-service plan retention remained really strong this quarter at 97%. That's in line with expectations.

And the results that we see are really demonstrating the clear execution we've had towards the strategic priorities around commercial momentum in OneAmerica. It was a solid first half of the year. You heard Heather reference $100 billion of positive flows with $40 billion being purely organic. Much of that was in the large end of the market in record keeping. The results in record keeping, they are purposeful and it's selected growth.

We see it as an attractive market. That's also -- if you think about this very complementary to our other businesses, including wealth management, where -- we continue to expand our adviser base and capabilities to serve the customers to and through retirement. So we feel really good around where our strategy is around retention. Our pipeline right now remains really healthy. We've got 25% more assets year-over-year in the final stages in the key segments.

It really does underscore our value proposition. So whether it be where we are in current flows, our retention or our pipeline, it's a really strong business right now in '25.

Sorry, anything on the participant behavior? That was kind of the root of my question as opposed to planned behavior.

Yes, thanks. I'll take that question. I think what you're referring to is in prior years where we saw heightened participant surrenders with a higher interest rate environment. We have seen that begin to normalize a bit in '25. So given some of the market volatility in the second quarter, we did see more transfers from variable into fixed. So that has been a favorable trend. But in addition to some of that participant behavior, we are also seeing a greater uptick in some of our target date funds that include the general account and other products.

So we see this as a combination around what's going on with the participant behavior as well as making sure we've got a competitive sleeve of products to be able to help us to moderate some of the outflows we have seen in the general account. Hopefully, that answers your question. .

Our next question is from Wes Carmichael with Autonomous Research. .

Employee Benefits, you previously flagged, I think, $50 million of strategic spend for 2025. Just wondering how much progress has been made on the $50 million and should we expect, I guess, within the income statement, those expense lines to be a little bit more pronounced in the back half of this year?

Michael will take your question on expenses, and Jay can just talk about just what we're seeing on some of the commercial momentum around lead.

We continue to expect that approximately $50 million of investments aimed at the lead capability that we're building. And I would think about that as more back half than first half, not tremendously, but modestly higher in the second half. I would also flag as you're thinking about just overall expenses second quarter to third quarter, I think relatively flat for retirement IM, again, modestly up in EB. The other piece to keep in mind for EB is just open enrollment. So on track for what we're trying to accomplish there and leave and maybe I'll pass it to Jay to give a bit more of an update on how that's going.

Great. Appreciate the question. If you think about the leave administration right now, it's definitely the most important capability in the market. It's -- that's leading to growth really among carriers. It's increasingly becoming a more complex market. The in-sourcing of the leave is going to help us drive our bundled solutions around group and voluntary. And that is always an intention. We knew the marketplace was going there, and we decided that the in-source solution was our best way to create a positive customer experience.

The early response right now from the market and from our intermediaries has been very, very positive. We are on plan to deliver the technology and the operating model to support a [ 1126 ] launch, and we've already sold a number of cases for [ 11 ].-- like I referenced, intermediaries, one of the reasons we see this as a positive development with them is they're already placing us on their panels for sales, and that's a key trigger for us. So to underscore the importance of [ leave ], I referenced it earlier, over 50% of the life and disability RFPs are being bundled with leave today. So we're really confident that the leave, disability and sub health capabilities that we're developing right now for employers are going to help them manage their benefits and for employees to access support when they need it. Maybe the last part of this is bringing this integrated claims platform remains a top priority for our employee benefits business, and we'll continue to come back to you with the progress. But we're on plan for 1126.

And my follow-up, Heather, I think in response to 1 of the questions on capital uses, you mentioned additional retirement roll-ups. Could you maybe just give us a little bit of color on the landscape in terms of how many opportunities are out there? And what kind of multiple those businesses are demanding?

Yes. No, it's a good question. And a bit early and always hard to be so specific on inorganic. What I would just say is, we do see that consolidation continues to take place within the retirement industry. I think we're viewed as a good acquirer in terms of how we're going to take good care of those employees and the plan sponsor. So I think it is a constructive environment, but this is one that's a little bit more of stay tuned.

We're going to be opportunistic. We have a high bar for capital deployment, just given where our share price is trading today. So stay tuned. We are going to be disciplined on any inorganic moves that we would make and make sure it is something that is a highly attractive and accretive investment for us.

Our next question is from Alex Scott with Barclays. .

I wanted to ask on investment management, just the progress with the Alliance partnership on like the AGI distribution? And what kind of impact is that having? Is that fully in place at this point? Or is it still building? Any color there would be helpful.

Yes. Thanks, Alex. I'll start and toss to Matt. I mean, we're 3 years in on our partnership with AGI, continues to be one that is very mutually beneficial for both organizations as well as for the clients. And it's really that economic alignment that we have between them. But let me toss it to Matt to provide more details.

Yes. Thanks, Alex. The fundamentals, of course, as Heather mentioned, are really driven around delivering world-class investment solutions for clients. We call out the income and growth franchise, our thematic equity, fundamental equity franchises. We've seen growth in the private placement component. That's somewhere where we have a strong value prop from the investment team as well as distribution insurance and globally. We've referenced growth in the fixed income component. We continue to see green shoots for selling our fixed income components globally. That's somewhere where we have very strong performance numbers and a strong franchise as well.

We are seeing growth there, and we'd anticipate we continue to see growth as we move into 2025, 2026. Bottom line, relationship continues to be very strong and look forward to continue to build upon it.

Helpful. Maybe in retirement, just with the average AUM levels and so forth, looking like there will potentially be a lot stronger headed into the back half of the year. How would you think about the additional flexibility that, that provides you from a top line standpoint? And to what degree would you maybe use that flexibility to invest in the business as opposed to letting to hit the bottom line through margin?

Yes. Maybe I'll start. As we think about our priorities for '25, we've been really clear on what we're trying to accomplish. And so I would just kind of come back to our priorities around executing on the margin improvement and employee benefits, continuing to drive the commercial momentum across retirement and investment management and the successful integration of OneAmerica. .

So as we think about -- that's our top priority is to continue to execute, drive the cash generation, it maybe ties back to a little bit of what Mike talked about in terms of the severances. We are going to continue to be good stewards of how we think about expenses, how we look for opportunities to drive efficiency that creates -- create catalysts for us to be able to invest in the business.

So there isn't anything specific that I would point to. I think the final bit that I would mention is what has already been in the targets that I've talked about on prior calls, is the modest investments we're making in Wealth Management this year, which sits inside that retirement business. And we think that's a great opportunity for us to continue to grow value across that franchise.

Our next question is from Josh Shanker with Bank of America.

Just looking at the sales figures and the medical stop loss, obviously, it's a rebuilding stage. But as we think about 2026, what sort of a partnership to your buyers look at you as having with them? And do you expect to be a more competitive player in the market with a real value add to your buyers' needs.

Yes, Josh, let me start and then I'll toss it to Jay. So I'll reaffirm on stop loss. The priority is not about capturing market share in this business. Really, the partnership goes back to -- you think about the 50-year track record we have in the business, we've got very strong distribution partners. But our priority remains clear, and it is about that margin over premium growth. But Jay, please add.

Yes, sure, Josh. Appreciate the question. Listen, this prioritization of margin over growth has been a kind of a cultural transformation for the team. And I really like what I'm seeing right now from the alignment between pricing, underwriting, risk and distribution. .

We have the ability to renew this business annually. And so we're constantly looking at our relationships in the marketplace, our intermediaries. There are new intermediaries that are joining this marketplace. You're seeing more and more companies on the smaller end of the market, thinking about with the rising cost of health insurance, self-insuring. This marketplace will expand. And as it does, we're going to remain disciplined on our pricing and our improved risk selection. This has been a driver for us to return to profitability.

When we look at the pricing discipline that I'm seeing in the market right now and the competitive pressures, I'm seeing a natural alignment with our competitors going to the center more around risk capacity, thinking about what each of our competitors' capacity is, and we're seeing some of that movement in our results, which we see as positive. Again, prioritizing margin over growth is going to be our strategy, and the team is focused on that.

And just one other question. When you think about medical stop loss business in the sort of health solutions area. It's very different from the other things that you're offering. You talk to different places within the organization when you're selling it, and it's a different kind of product. How does the stop-loss business fit within the goals of the health solutions. Is this a business that Voya needs to do the other things that it wants to do in health solutions.

I appreciate the question. I think where the alignment happens, the way we look at this is, it really is around risk transfer. It's another risk transfer product for us. And so the way we think about this and the way we price and underwrite this is really based on 50 years of experience in pricing and underwriting in this market. The data is evolving as Mike referenced earlier, and we are on top of some of the latest data with our advisers. .

But the linkage between this and our intermediaries and brokers see this very much as a risk transfer business. And so that's going to be our focus. Sitting inside the employee benefits business, this is another benefit that does happen to employers to help protect them as they're self-insuring. And so we very much see this as complementary to the rest of our business. Now with that said, there's volatility in this business that we're managing.

And we have separate stop-loss teams that are on top of this business, both from a pricing and an underwriting and a distribution and we very much look at this business while complementary, we're disciplined about managing with the volatility that it brings.

Our next question is from Mike Ward with UBS.

I just had a question for Matt Toms and curious about the outlook for flows for the remainder of the year in Investment Management. And then if you could help us think about the fee rates. And if they were -- if your revenues were pressured by the strange equity market diversion in the quarter, if you could help us think about sort of a run rate. .

Thanks, Mike, for the question. Very happy with flows on the quarter of $1.8 billion in the quarter in what was a volatile market, I think, a difficult operating environment. The key there is the breadth of these flows, and that's both year-to-date if we think about the $9.5 billion flows year-to-date, that's a 3.1% organic growth number for the first half. And I'd say that the breadth of flows that we look into the second half is what makes us confident. So across channels, still insurance and international are standouts for us.

If We think by investment platform, private fixed income, our multi-asset components and incoming growth continue to show strength. So in the first half as well in the second half, that balance and that breadth of flows, we think is a differentiator for us. As far -- so I'd say the components are similar to the second half as we had as far as growth rate, we see no reason to pivot away from that 2-plus percent longer-term organic growth rate target.

And that's where we landed in the second quarter, and we think the second half is likely to be similar down that path. As far as fee rate roughly unchanged quarter-over-quarter at [ 27 ] basis points. We think that's something we've been very successful in holding flat versus an industry headwind. But you're right, the equity market drawdown in the quarter does provide a little bit of noise, but I view that as nothing other than noise. And it sets us up quite well heading into the third quarter.

And then maybe for Heather or Jay. Appreciate the restoring of the segment names. And I guess it seems like now strategically and I think you've alluded to this, but you could actually set up an actual wealth advisory business, maybe a segment at some point. Is that how we should be thinking about that? And could you size at all the contribution to earnings from that platform? Or is it still earlier innings?

Yes.I will take your question. So when you think about it, we have a wealth management business that sits inside of retirement today. And we have, for a number of years, we are calling out the capability. This has been a very important capability within our tax-exempt business. Jay came in, bringing in a lot of wealth management and expertise. So I wouldn't necessarily think about this as a separate segment. But like others in the space, we see this as an important growth lever inside retirement when you think about our ability to provide more holistic advice and planning to our clients.

Thank you, we 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.