NEW YORK, Sept. 10, 2015 /PRNewswire/ -- Voya Financial,
Inc. (NYSE: VOYA) announced today that it has entered into an
agreement to sell via reinsurance an in-force block of
approximately 155,000 term life insurance policies to Reinsurance
Group of America, Incorporated (NYSE: RGA). Voya Financial will
continue to administer and service the policies, which represent
approximately $90 billion of life
insurance in force backed by approximately $1.4 billion of statutory reserves as of
June 30, 2015.
Following the closing of the transaction, Voya Financial's
insurance subsidiaries will have more than 950,000 policies
representing approximately $270
billion of life insurance in-force backed by statutory
reserves of $18 billion as of
June 30, 2015.
"This transaction supports our focus on improving returns in our
Ongoing Business while also enabling us to free up more than
$230 million in excess capital," said
Rodney O. Martin, Jr., chairman and
CEO, Voya Financial, Inc. "The
transaction aligns with our focus on executing on growth, margin
and – as in this example – capital initiatives as part of our plan
to drive further improvement in Voya's Ongoing Business Operating
Return on Equity and create value for our shareholders."
Based on financials as of June 30,
2015, Voya Financial expects the transaction will:
- Create excess capital of approximately $230 million;
- Reduce GAAP capital allocated to the company's Individual Life
business by approximately $270
million;
- Reduce operating earnings in Voya's Individual Life segment by
approximately $4-6 million on a
quarterly basis; and
- Create an immediate non-operating pre-tax GAAP loss of
$100 million to $110 million and a deferred non-operating pre-tax
GAAP loss that the company expects to recognize at an average rate
of approximately $12 million a year
over the next 15 years.
The figures presented above represent the estimated pro forma
effect of the transaction as of June 30,
2015. Actual amounts will differ at the time of closing,
which is expected to occur in the fourth quarter of 2015. In
addition, beginning with full year 2016, Voya expects the
transaction to provide approximately 10-20 basis points of
incremental operating return on capital (ROC) benefit to both
Voya's Individual Life segment and the Ongoing Business.
The transaction is subject to regulatory approval and other
customary closing conditions. The block of term life insurance
products included in this transaction were issued by ReliaStar Life
Insurance Company and ReliaStar Life Insurance Company of
New York (collectively
"ReliaStar"). The transaction does not affect Voya's
Tax-Exempt Markets (403(b)), Employee Benefits or Annuities
businesses also conducted through ReliaStar.
"Our success over the past several years in shifting sales of
individual life insurance to less capital intensive, higher-return
products, such as indexed life insurance, not only supports our
focus on improving returns but also enables us to fulfill a key
aspect of our value proposition as we help Americans get ready to
retire better by helping them plan, invest and protect their
savings," added Martin.
Citigroup served as sole financial advisor and Sutherland Asbill
& Brennan served as legal advisor to Voya Financial on the
transaction.
Media
Contact:
|
Investor
Contact:
|
Christopher
Breslin
|
Darin
Arita
|
(212)
309-8941
|
(212)
309-8999
|
Christopher.Breslin@voya.com
|
IR@voya.com
|
About Voya Financial
Voya Financial, Inc. (NYSE:
VOYA), helps Americans plan, invest and protect their savings — to
retire better. Serving the financial needs of approximately 13
million individual and institutional customers in the United States, Voya is a Fortune
500 company that had $11 billion
in revenue in 2014. The company had $484
billion in total assets under management and administration
as of June 30, 2015. With a clear
mission to make a secure financial future possible — one person,
one family, one institution at a time — Voya's vision is to be
America's Retirement Company™. The company is
equally committed to conducting business in a way that is socially,
environmentally, economically and ethically responsible — Voya has
been recognized as one of the World's Most Ethical Companies, by
the Ethisphere Institute, and as one of the Top Green Companies in
the U.S., by Newsweek magazine. For more information,
visit voya.com or view the company's 2014 annual
report. Follow Voya Financial on Facebook and Twitter
@Voya.
Forward-Looking and Other Cautionary Statements
This press release contains forward-looking statements.
Forward-looking statements include statements relating to future
developments in our business or expectations for our future
financial performance and any statement not involving a historical
fact. Forward-looking statements use words such as "anticipate,"
"believe," "estimate," "expect," "intend," "plan," and other words
and terms of similar meaning in connection with a discussion of
future operating or financial performance. Actual results,
performance or events may differ materially from those projected in
any forward-looking statement due to, among other things, (i)
general economic conditions, particularly economic conditions in
our core markets, (ii) performance of financial markets, including
emerging markets, (iii) the frequency and severity of insured loss
events, (iv) mortality and morbidity levels, (v) persistency and
lapse levels, (vi) interest rates, (vii) currency exchange rates,
(viii) general competitive factors, (ix) changes in laws and
regulations, including those relating to the use of and possible
application of NAIC accreditation standards to captive reinsurance
entities and those made pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act or the U.S. Department of
Labor's proposed rules and exemptions pertaining to the fiduciary
status of providers of investment advice, and (x) changes in the
policies of governments and/or regulatory authorities. Factors that
may cause actual results to differ from those in any
forward-looking statement also include those described under "Risk
Factors" and "Management's Discussion and Analysis of Results of
Operations and Financial Condition—Trends and Uncertainties" in our
Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and
Exchange Commission on February 27,
2015, and our Quarterly Report for the three-month period
ended June 30, 2015, filed with the
SEC on August 7, 2015.
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SOURCE Voya Financial, Inc.