VOYA Q2 Earnings Miss on Weak Alternative Investment Results

VOYA's Core Results Weaken

After-tax adjusted operating earnings fell to $140 million from $240 million in the year-ago quarter. Results included about $40 million of pre-tax severance expenses and a $15 million pre-tax loss tied to alternative investment performance.

Consolidated revenues declined 4.3% year over year to $1.90 billion. Fee income increased 7.5% to $620 million, but net investment income fell 8% to $537 million. Premiums remained nearly flat at $716 million. Total benefits and expenses rose 3.8% to $1.86 billion, including a 4.8% increase in operating expenses.

Voya's Retirement Scale Expands

Retirement pre-tax adjusted operating earnings decreased 19.1% year over year to $190 million. Strong underlying business momentum and higher fee-based revenues were more than offset by weaker alternative investment income and planned strategic investments.

Total client assets increased 14% to $863 billion as of June 30, 2026. Voya also surpassed 10 million participant accounts and completed the integration of OneAmerica. Defined contribution net flows totaled $8.1 billion, demonstrating sustained commercial momentum. 

Trailing-12-month retirement net revenues rose 10% to $2.42 billion. Adjusted operating earnings increased 6% over the same period to $915 million, although the adjusted operating margin contracted to 37.9% from 39.3%.

VOYA's Investment Management Gains

Investment Management pre-tax adjusted operating earnings, excluding noncontrolling interest, increased 11.8% year over year to $57 million. Higher fee-based revenues, positive capital markets and disciplined expense management supported the improvement.

Assets under management reached $377 billion, up 4.7% from the prior-year quarter. The business generated $1.2 billion of net inflows during the quarter, excluding divested businesses. Assets under advisory rose to $63 billion from $54 billion, with quarterly net inflows of $1 billion.

Trailing-12-month net revenues increased 6%, while the adjusted operating margin expanded 100 basis points to 29%. Net inflows over the past 12 months totaled $6.3 billion, strengthening the segment’s earnings base.

Voya's Benefits Margins Improve

Employee Benefits pre-tax adjusted operating earnings dropped to $22 million from $69 million. The prior-year period had benefited from more favorable Stop Loss claims development, while Voluntary loss ratios increased from unusually low levels.

Still, underlying profitability improved over the trailing 12 months. Net revenues advanced 13% to $1.11 billion, and the aggregate loss ratio improved 500 basis points to 74%. The adjusted operating margin expanded to 11% from 3.7%.

Management attributed the progress to underwriting discipline, pricing actions and expense management. Stop Loss and Group Life performance contributed more than $110 million of net underwriting improvement during the past 12 months.

VOYA's Capital Returns Stay Robust

Voya generated approximately $150 million of excess capital during the quarter, exceeding 100% of after-tax adjusted operating earnings. The company returned about $200 million to shareholders through dividends and share repurchases.

VOYA completed a $150 million accelerated share repurchase program at an average price of $78.97 and paid $42 million in common dividends. Remaining repurchase authorization totaled $263 million at quarter-end.

The company ended June with approximately $200 million of excess capital. Its risk-based capital ratio was about 390%, above the 375% target, while financial leverage of 27.6% remained within the targeted 25-30% range.

Voya's Second-Half Outlook Strengthens

Management expects the operating-efficiency measures taken during the quarter to generate recurring savings that fully offset the severance expense within two quarters. These actions are expected to support improved margins and stronger earnings in the second half of 2026.

Retirement administrative expenses are projected between $530 million and $545 million for the second half. Employee Benefits administrative expenses are expected between $265 million and $275 million. Management also expects 2026 cash generation to exceed the 2025 level, supported by commercial growth and disciplined expense execution.

Zacks Rank

VOYA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Industry Players

Lincoln National Corporation LNC reported second-quarter 2026 adjusted earnings per share of $2.24, which surpassed the Zacks Consensus Estimate by 12%. The bottom line declined 5.1% year over year. Adjusted operating revenues grew 4.2% year over year to $4.93 billion, surpassing the Zacks Consensus Estimate by 1.4%.

Management had earlier projected that the Annuities, Life Insurance, Group Protection and Retirement Plan Services units would account for 58-60%, 8-9%, 24-25% and 8-9%, respectively, of the company's total operating income in 2026. Management had earlier projected an RBC ratio of more than 420% in 2026 and over the long term.

AMERISAFE AMSF reported second-quarter adjusted earnings per share of 44 cents, which missed the Zacks Consensus Estimate by 17%. The bottom line declined 17% year over year.  Operating revenues increased 10.3% year over year to $83.95 million and topped the Zacks Consensus Estimate by 1%.

AMERISAFE’s quarterly results were affected by higher expenses and weaker underwriting margins, with additional pressure from lower investment income. Strong premium growth partly offset these headwinds.

Globe Life Inc. GL reported second-quarter 2026 net operating income of $3.61 per share, which missed the Zacks Consensus Estimate of $3.67 by 1.6%. The bottom line, however, improved 10% year over year, driven by higher insurance underwriting income. Operating revenues increased 8% year over year to $1.60 billion, driven by higher premium income, stronger net investment income and realized investment gains. The top line surpassed the Zacks Consensus Estimate by 0.6%.

Total premium revenues increased 7% year over year to $1.30 billion. Life insurance premiums rose 3% to $860.8 million, while health insurance premiums climbed 16% to $436.9 million, supported by strong growth at United American and Family Heritage.

Globe Life raised its full-year 2026 net operating income guidance to a range of $15.55-$15.95 per share, suggesting a 10-cent increase at the midpoint from its prior outlook.

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