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DATE

Wednesday, Aug. 5, 2026, at 10 a.m. ET

CALL PARTICIPANTS

• Head of Investor Relations - Mei Ni Chu
• Chief Executive Officer - Heather Hamilton Lavallee
• Chief Financial Officer - Michael Robert Katz
• CEO of Workplace Solutions - Jay Stuart Kaduson
• CEO of Investment Management - Matthew Toms

TAKEAWAYS

• Adjusted Operating Earnings -- $140 million or $1.51 per diluted share, including an approximate $0.90 per share negative impact from alternative investment performance and severance costs.
• Severance Expenses -- $40 million pretax, representing targeted actions to improve operating efficiency and reduce ongoing operating expenses.
• Alternative Investment Results -- A $15 million pretax loss, driven by macro market conditions affecting the private equity portfolio which is reported on a one-quarter lag.
• Retirement Fee-Based Revenue -- 10% year-over-year growth, which now represents over 60% of the segment's total revenue.
• Defined Contribution Net Flows -- $8.1 billion for the quarter, supported by high client retention and large plan implementations in government and corporate markets.
• Retirement Participant Accounts -- Exceeding 10 million accounts, providing scale to drive future fee-based revenue growth.
• Government Market Asset Growth -- $30 billion in added assets and approximately 1 million participants over the past 18 months, reflecting organic growth.
• Wealth Management Revenue -- 12% growth year over year, as the company expands retail advice and guidance capabilities in the workplace.
• Wealth Management Assets -- $33 billion, representing a 60% increase compared to the prior-year period.
• Investment Management Operating Earnings -- $57 million, an increase of 12% year over year driven by higher advisory fees across institutional and retail channels.
• Investment Management Net Inflows -- $1.2 billion for the quarter and $6.3 billion over the last 12 months, with positive demand for fixed income and private credit.
• Assets Under Management -- $377 billion, representing growth from $360 billion as of June 30, 2025.
• Employee Benefits Operating Earnings -- $22 million, down from $69 million in the prior-year period.
• Aggregate Loss Ratio -- 74%, representing a 5 percentage point improvement over the last 12 months due to disciplined underwriting and pricing.
• Stop Loss Rate Increases -- 24% for the 2026 business, following a 21% increase in 2025, as management prioritizes margin improvement over growth.
• Excess Capital Generation -- $150 million for the quarter and $350 million year to date, with cash conversion exceeding 100% of adjusted operating earnings.
• Share Repurchases -- $150 million in the second quarter, bringing the total returned to shareholders through buybacks and dividends to approximately $200 million.
• Third Quarter Buyback Guidance -- At least $100 million, supported by the second-half cash generation outlook.
• Adviser Count -- Over 650 advisers, representing a 20% increase year to date to support the growing wealth management customer base.
• Voluntary Product Sales -- 7% growth on a trailing 12-month basis, with management noting that loss ratios are being managed to maintain stable net margins.
• Benefitfocus Pipeline -- 32% growth over the prior period, with sales tracking 8% ahead of last year.
• Average Sold Case Size -- 80% increase year over year for the Benefitfocus platform, reflecting higher demand for integrated benefits administration.

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RISKS

• Toms stated, "the second half will include the wind down of a legacy relationship. Which will modestly offset momentum in actively distributed products," regarding a subadvisor related business in the U.S.
• Katz stated, "The alternative investment impact was driven primarily by macro market conditions affecting our private equity portfolio, which are reported on a 1-quarter lag," resulting in a $15 million pretax loss during the quarter.

SUMMARY

Voya Financial, Inc. (VOYA -2.00%) management discussed the completion of the OneAmerica integration and the impact of non-recurring severance and investment items on quarterly earnings. The company reported commercial momentum in the Retirement and Investment Management segments, while focusing on margin expansion in Employee Benefits through disciplined pricing and underwriting. Executives stated that the expense actions taken during the period are expected to improve operating efficiency and support increased cash generation in the second half of the year.

• CEO Lavallee confirmed that the OneAmerica integration "significantly exceeded the financial goals we set" upon its successful conclusion during the quarter.
• CFO Katz stated that 2026 cash generation is on track to exceed 2025 levels, supported by a cash conversion rate above the company's 90% target.
• CEO Lavallee highlighted that the retirement franchise now exceeds 10 million participant accounts, which allows the company to "deepen those participant relationships and serve customers in a more comprehensive way."
• CEO of Investment Management Toms noted that investment performance remains a strength, with 83% of assets outperforming peers or benchmarks over three years.
• CEO of Workplace Solutions Kaduson reported that 48% of all new life and disability cases were bundled with supplemental health, an increase from 42% in the prior year.
• Management indicated that Investment Management institutional net flows of $1.6 billion were driven by demand for insurance-backed fixed income and private credit capabilities.
• CFO Katz noted that the severance actions taken in the second quarter are expected to have a six-month payback period and will reset the expense baseline for 2027.

INDUSTRY GLOSSARY

• AUA: Assets under advisory, representing assets for which a firm provides advice but does not have full discretionary management.
• CIT: Collective investment trust, a pooled investment vehicle held by a bank or trust company for tax-exempt retirement plans.
• ESOP: Employee stock ownership plan, a program providing workers with ownership interest through shares of company stock.
• IBNR: Incurred but not reported, an accounting reserve for claims that have occurred but have not yet been filed with the insurer.
• Stop Loss: An insurance policy that protects employers who self-fund their employee benefit plans against large or unpredictable claims.

Full Conference Call Transcript

Operator: Good morning. Welcome to Voya Financial's Second Quarter 26 Earnings Conference Call. All participants will-- After today's presentation, there will be an opportunity to ask questions. 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.

Mei Ni Chu: Good morning. And thank you for joining our second quarter earnings conference call. We will begin with prepared remarks by Heather Hamilton Lavallee, our Chief Executive Officer and Michael Katz, our Chief Financial Officer. Following their prepared remarks, we will take your questions. Also joining the call are Jay Stuart Kaduson, CEO of Workplace Solutions; and Matthew Toms, our 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 in our Investor Relations website. And now, I will turn the call over to Heather.

Heather Hamilton Lavallee: Thank you, Mei Ni. Good morning and thank you for joining us today. Let's turn to slide 4. Our businesses performed well in the second quarter. Strong underlying results were affected by lower alternative investment performance, and by severance costs we incurred to reduce our expense base. For the quarter, we delivered adjusted operating earnings of $1.51 per share, generated approximately $150 million of excess capital and returned approximately $200 million to shareholders through repurchases and dividends.

As Mike will cover in more detail, fundamental performance trends and the immediate payback from these expense actions gives us a clear line of sight to increased earnings and cash generation in the second half Our performance this quarter highlighted continued execution, of our strategic priorities. We delivered strong commercial results in Retirement and Investment Management, we are stabilizing and growing margins in Employee Benefits and we are expanding wealth management capabilities to drive future revenue growth Turning to our business results. In Retirement, we generated over $8 billion of defined contribution net inflows in the quarter supported by continued high client retention and large plan implementations in government and corporate markets.

In government markets, where Voya leads the industry, we have added more than $30 billion in assets and approximately 1 million participants in the past 18 months through organic growth. We are also driving strong full service growth in key segments with emerging market sales up over 30% year over year. We completed the final phase of our OneAmerica integration during the quarter marking the conclusion of a highly successful acquisition and integration effort that has significantly exceeded the financial goals we set We continue to build momentum in wealth management.

With year over year revenue growth of 12% Our retirement franchise now exceeds 10 million participant accounts and wealth management allows us to deepen those participant relationships and serve customers in a more comprehensive way Our results this quarter demonstrate Voya's leadership position in the retirement market. Our business is delivering consistent flows, high client retention and significant growth in participant accounts. Our presence across markets and expansive distribution footprint provides a durable foundation for sustainable growth As we further develop our wealth management capabilities, we are building a platform that can serve an expanding customer base with the solutions they need for a confident financial future.

In investment management, we generated positive net flows for both the quarter and the year supported by client demand across a broad range of investment strategies, and distribution channels We expanded our product offerings during the quarter including the launch of 2 multi manager collective investment trusts that enhance the private and alternative asset solutions we bring to retirement plan clients.

Our investment performance remains a clear strength with 83% of assets outperforming peers or benchmarks over 3 years, and 85% outperforming over 10 years The strong outcomes we deliver for clients are driving continued commercial success and strengthen the role investment management plays in Voya's broader workplace, and wealth management strategy In employee benefits, we continue to improve and strengthen the business In Stop Loss, we have stabilized loss ratios and margins across the entire book while maintaining the strength of our reserves.

Early 26 experience reinforces our confidence that the actions we have taken will continue to drive higher margins, and restore the business to its historical earnings power Across the portfolio, disciplined pricing, underwriting and risk selection, are improving margins and allowing us to focus on business that meets our return expectations I will now turn it over to Mike to walk through the financials in more detail. Mike?

Michael Robert Katz: Thank you, Heather. Turning to slide 6. In the quarter, adjusted operating earnings were $140 million or $1.51 per diluted share. That result includes an approximate $0.90 per share impact from alternative investment performance below expectations as well as severance actions. The alternative investment impact was driven primarily by macro market conditions affecting our private equity portfolio, which are reported on a 1-quarter lag. Year to date returns remain positive and we expect results to improve in the third quarter. On severance, we expect the resulting expense savings to fully offset the upfront costs by year end. These actions improve efficiency, reduce ongoing expenses, and allow us to invest in long term growth.

While these items affected second quarter EPS, the underlying business trends remain strong. Continued commercial momentum in retirement and investment management along with improving margins and employee benefits support our confidence in meaningfully higher earnings in the second half. With that, let me turn to the segment results. Starting with Retirement on Slide 7. Adjusted operating earnings were $190 million in the quarter, Results were impacted by lower spread income, reflecting alternative investment performance below expectations. Excluding the alternative investment impact, core spread income remained resilient supported by reinvestment at higher rates On a trailing 12-month basis, adjusted operating earnings increased 6%. Fee based revenue increased 10% year over year now representing over 60% of revenue.

And margins remained healthy at 38%. Defined contribution net flows were $8.1 billion in the quarter, supported by continued high client retention, and large plan implementations in both government and corporate markets. Our platform now serves more than 10 million participant accounts providing meaningful scale to drive future fee based revenue growth. Stepping back, robust flows, high client retention, and growth in participant accounts reinforce the strength of our retirement franchise. Turning to investment management on slide 8. Adjusted operating earnings increased 12% year over year to $57 million driven by higher advisory fees across institutional and retail channels.

On a trailing 12-month basis, adjusted operating earnings increased 11% reflecting both those higher advisory fees as well as disciplined expense management. Net inflows were $1.2 billion in the quarter and are now $6.3 billion over the last 12 months. Looking ahead, we continue to see healthy client demand for our differentiated investment capabilities and robust investment performance. At the same time, the second half will include the wind down of a legacy relationship. Which will modestly offset momentum in actively distributed products. Importantly, the revenue impacts from this are expected to be immaterial in 2026. Overall, Investment Management delivered solid earnings growth supported by positive flows healthy client demand and strong investment performance.

Turning to employee benefits on slide 9. Adjusted operating earnings were $22 million in the quarter and $122 million over the last 12 months. In the quarter, we released $8 million of reserves and stop loss while continuing to hold reserves at the high end of our best estimate range. Early claims experience on 2026 business is encouraging and is emerging favorably relative to both 2024 and 2025 business. We also continue to see favorable underwriting conditions as we complete the non January 2026 selling season and begin pricing for January 2027. In Group Life, results continue to benefit from favorable mortality consistent with broader industry trends.

This helped to offset higher voluntary loss ratios in the quarter which were elevated in part due to non recurring items. For voluntary, while onetime items contributed to higher loss ratios in the quarter, the broader trend remains consistent with our expectations as expense actions are supporting our plan to maintain net margins. Stepping back, the underlying fundamentals across the portfolio remains strong highlighted by the 5-point improvement in aggregate loss ratios over the last 12 months. Our disciplined approach to risk selection, pricing, and expense management reinforces our ability to deliver further margin expansion and earnings growth in Employee Benefits. Turning to slide 10.

We generated approximately $150 million of excess capital in the second quarter and $350 million year to date with cash conversion above 100% in the quarter. We remain on track for 2026 cash generation to exceed 2025 levels. Supported by strong cash conversion, second half earnings outlook and the expense actions we have discussed. On capital deployment, we repurchased $150 million of shares in the second quarter and $300 million year to date. We ended the quarter with approximately $200 million of excess capital preserving flexibility while continuing to return capital to shareholders.

For the third quarter, we expect to deploy at least $100 million towards share repurchases and the second half cash generation outlook gives us flexibility to deploy additional capital in the fourth. Return on equity was impacted by alternative investment and severance items which is why we are explicitly calling them out rather than leaving investors to reconcile the effect on their own. Stepping back, the second half outlook is supported by business momentum expense discipline and improving fundamentals. Most importantly, cash generation remains strong and we remain on track for 2026 to exceed 2025 levels. With that, I will turn it back to Heather.

Heather Hamilton Lavallee: Let me close on slide 11 which brings together the key points from today's discussion. We are carrying strong commercial momentum into the second half particularly in retirement and investment management. We continue to improve margins in employee benefits. Supported by the pricing and underwriting actions we have taken across the portfolio. The expense actions we took in the second quarter alongside a more constructive macro environment provide a tailwind for increased earnings in the second half. Our cash generation remains strong with 2026 on track to exceed 2025 levels and conversion rates above our 90% target.

We continue to be disciplined in deploying capital We returned more than $380 million to shareholders in the first half of 26 We are maintaining our commitment to return capital to shareholders in the second half with our repurchase program active in the market and at least $100 million of buybacks planned for the third quarter. Together, these actions reinforce our confidence in our strategy and position Voya to deliver continued earnings growth strong test generation and shareholder value. Before we go to questions, I want to thank our employees across Voya. Every day, they help our customers navigate some of life most important financial decisions with greater confidence.

Their focus and commitment continue to drive our success With that, I will turn it over to the operator so we can take your questions.

Operator: Thank you. We will now begin the question and answer session. Question. Our first question is from Kenneth Lee with RBC Capital. Please proceed.

Ken Li: Hey, good morning and thanks for taking my question. Just 1 on the investment management side, the institutional net inflows in the quarter. If you could talk a little bit more about some of the drivers there and perhaps also the any kind of color or composition of the pipeline? Thanks.

Heather Hamilton Lavallee: Yes. Good morning, Kenneth. Matthew will take your question.

Matthew Toms: Yes. I am happy to unpack that for you, Kenneth. So first quarter, sorry, second quarter strong that $1.2 billion were happy with that is an annualized growth rate of about 1.6%. Importantly, within that, the revenue yield was up as well. And that is that is a counter industry trend, and that is supporting the broader fee revenue growth and it shows the quality of those flows. You referenced institutional specifically, that is 1.6 billion.

So, providing the flows for the quarter, I would continue to call out the insurance strength we have that is backed by both our fixed income and our private credit capabilities that continue to resonate in the marketplace. that is both backward looking and forward looking to your question about the, the forward, look. Overall, our demand for institutional retail products remains attacked. And, look, we like the competitive position. Those fixed income international markets, which we believe are poised for continued growth. And that is what drives that long term expectation of 2+%.

Ken Li: Great. Very helpful there. And 1 follow-up, if I may. Any color around what you are seeing in terms of plan RFP activity within the retirement business there? Thanks.

Heather Hamilton Lavallee: Yes, Kenneth. Jay will take your question.

Jay Stuart Kaduson: Thanks. Yes. If you think about RP volumes themselves, and they do differ across markets, If you think about our emerging market, you should think in terms of that mid single digits, 6% 7% growth double digit growth in mid market where we are seeing a lot of activity and finding a lot of success. In that large mega, it is been very consistent in prior years, low single digit. Very healthy. And, overall, we are really, really pleased with the RFP volumes that are really helping us through our commercial momentum.

Heather Hamilton Lavallee: And I think the broader step back, Kenneth, is that we continue to be very pleased with the commercial momentum in retirement. And the overall performance in our largest and highest margin business. Great.

Ken Li: Very helpful there. Thanks again. Thanks, Kenneth.

Operator: Our next question is from Tom Gallagher with Evercore ISI. Please proceed.

Tom Gallagher: Hey, good morning. A few on stop loss. Heather, I know you mentioned the early 26 experience gives you confidence that margins will improve in stop loss. Any quantification that you can share on how we should think about that. And is 3Q at all a possibility to change your 2087 loss pick for 2026? Or is it more likely we need it to be more seasoned that we would have to expect that to come through and have enough evidence to wait until Q4?

Heather Hamilton Lavallee: Yes. Good morning, Tom. I will let Mike start on the question.

Michael Robert Katz: Hey, Tom. Yes. Look, I think it is remote in the third quarter, but I would circle the fourth quarter really the more likely opportunity for that. Why is that? We are a third complete coming out of the third quarter. We are 2 thirds coming out of the fourth. And we just really have zero interest in trying to accelerate outcomes. You know, that said, when we look at what we are seeing in the 2026 business so far, it is running meaningfully better. Than what we saw in both 2024 and 2025 coming out of August. Now to get to completion here, we are about 15% to 20% complete. Coming out of, the second quarter.

But we are still going to think about this at the high end of best estimate reserve ranges. I think we have been very consistent about that. But what is important here is the work we did last year, you look at the underwriting team that we put in place, the leadership we put in place, which is really been all about how we quote, how we review and select risk, The other thing is just our ability to get rate. We got 21% rate increase coming into 25. We got 24% rate increase coming into 2026, and frankly, we are getting even more rate in what we are pricing in 2026.

So I think the step back here is we feel really good but we do not want to accelerate any outcomes here, Tom.

Heather Hamilton Lavallee: Yeah. Tom, it is Heather. And if I can just add a little more, explicit points on the 2026 book. Not only are we seeing better claims experience than the 2024 and 25 again, it is early We are also seeing a, lower number of high severity claims. And we are seeing a lower number of frequency. So it is a combination of those in addition to the pricing, the reserve level. So that is just a little more color on the 2026 book.

Tom Gallagher: that is really helpful color. And just a follow-up, just if you do not mind bearing with me to follow my logic on this question. But so the interesting thing to me was the 2024 accident year, which I would have thought had no juice left in it at all. Actually had favorable development of 2 points between mid 25 to now But so that seemed favorable. Then the 2025 action a year has only improved 1 point. Versus your reset 90% loss ratio versus Q4 25. So I guess my question is, I would have thought these would have all seasoned by now, but it seems like it is taking longer.

Is there something about these claims patterns that are stretching out development for longer? Is that actually a trend? And what should we infer from that if that is in fact happening?

Heather Hamilton Lavallee: Yeah. Tom, we will let Mike hit more of the tech aspects of the question. I will let Jay build a little bit more about what he is seeing in the marketplace.

Michael Robert Katz: Yeah. Tom, look, following the logic, I think what we talked about last quarter was there was a pending reserve cleanup that affected the reserve release in the first quarter. So when you think about how much reserve release was happening from the 2025 book in Q1, was about $7 million And so the big balance of that was a pending reserve cleanup in 2024 and 2023 and I think you are thinking about that right. I think we did see an acceleration when claims were being reported. that is why we were careful at the end of last year. But there is not a new normal where it is taking over 2 years for this to season.

I think what we talked about with respect to 2025 is I see that as 90 to 95% complete at this point. So it is getting pretty firmed up, and we expect a similar pattern for the 2026 business.

Jay Stuart Kaduson: Jay? Hi, Tom. Yeah. I think if you take a step back and you think about since Q1 of 25, you know, we have made real substantive changes to the stop loss leadership team and really the operating model itself. So we have got seasoned leaders in risk and pricing, underwriting, distribution. And they have been focused on advancing this risk and operating model improvement with a clear focus. You know, we have been very consistent on this margin over growth. And we are seeing the early results come through in our 26 book. You know, we are pricing every piece of business to get back to our target loss ratios. Right now, the market demand is up over 13%.

And quite frankly, the supply, Tom, is not keeping up with the pace. And so more employers are looking for stop loss solutions, and with the market's starting to, you know, continuously harden, we are confident in achieving the desired rate and importantly, the persistency targets that we have set for 26. You know, all this speaks to the strength right now of our client and intermediary relationships, very active dialogue with them. And we remain focused right now on that disciplined pricing and risk selection and underwriting as we look to grow the business.

Tom Gallagher: Thanks, Tom. Appreciate your questions.

Operator: Our next question is from Joel Hurwitz with Dowling & Partners. Please proceed.

Joel Hurwitz: Hey, good morning. I wanted to touch base first on the expense actions. How much of the improvement in expenses in your back half outlook is driven by those? And do you think those are sustainable as we move into 2027?

Heather Hamilton Lavallee: Hey, good morning, Joel. Mike will take your question.

Michael Robert Katz: Hey, Joel. Yeah. No, we as we were getting across in some of the prepared remarks that we do expect a 6 month payback and for this to drop to the bottom line. You know, we talked about very early in the year that we, Heather, myself, the team, we are very much focused on self funding growth investments. And so you are seeing these actions is why we had so much confidence around that. We do give a sense in the appendix of the, the materials on how to think about the split between retirement and employee benefits. To your question around looking beyond this year, we view the actions that we took here as resetting the baseline.

Heading into 2027. We are just entering in the planning season here as we think about everything that we want to accomplish in 2027 and beyond and really the mindset that Heather, myself, and the team has is operating leverage, full stop. And so it is also why we have so much confidence in the cash generation outlook. When we look at, you know, the actions this year, including severance, we still expect cash generation to increase and we expect it to increase again next year. And that is partly due to these actions on expenses, but also the commercial momentum that we have talked about as well as the margin expansion within employee benefits.

Joel Hurwitz: Got it. that is helpful. And then just shifting to voluntary. Can you unpack the experience you saw in the quarter, just quantify the unusual items that you had? And I guess, where do you expect the loss ratio to go from here on that business? Is it still low 50%, or are we creeping more towards, the mid fifties?

Heather Hamilton Lavallee: Joel, we will let Miles speak to the loss ratio and then Jay can add a little bit more to what we are seeing commercially in the market on voluntary.

Michael Robert Katz: Yeah. Sure, Joel. So just first, we did, there were a couple unusual items in the quarter. There were some billing true ups, that came out of the first quarter into the second quarter. So there is some normalization between those 2Quarters as well as some reserve adjustments through legacy products that get reported in that line because we have voluntary disability and other all in the same line. You know, if I cut through all of that to your question, I would think of those having about a 2.5 effect in the quarter. So a more normalized number for voluntary in the 54% range year to date, 53%.

So that is that is kind of what I would expect in the second half of the year. Now remember, you know, we are putting up IBNR with those loss ratios as well and the fourth quarter is really important for voluntary. So we will see how this ultimately shakes out, but I think that is a reasonable starting point And I think the broader message that and we talked about this even earlier in the year and late last year was that we did expect higher loss ratios because we are getting after customer value here with these products, but we expect to do that while maintaining very stable net margins.

And again, I think this is a nod to the expense actions we took in the quarter.

Jay Stuart Kaduson: Yeah. Just to build, if you think about right now our position, you know, Joel, as a top 3 voluntary provider, you know, the strength sits in our distribution really enhanced service model, which matters in the market right now and our deep product expertise. And so you know, the market demand is up year over year across all size segments for us. And sales are up 7% on a trailing 12-month basis. So the commercial momentum results are there. In addition, you know, our voluntary persistency over the last 12 months that we really focus on has been extremely solid. it is really a strong, persistency business for us. And so the overall business fundamentals remain strong.

And we really like our market position as we continue to grow the voluntary sales We appreciate the question here.

Operator: Our next question is from Ryan Joel Krueger with KBW. Please proceed.

Ryan Joel Krueger: Hey, thanks. Good morning. 1 question on stop loss. Just when you put everything together on the trends that you are seeing do you feel like you can get back to your target margins in that business in 2027 at this point?

Heather Hamilton Lavallee: Yes. Ryan, it is Heather. Maybe I will start, and then Mike can build those. that is absolutely, what our plan is. And as you have heard us talk about all the pricing actions we have taken, the discipline around underwriting, when we are pricing business, we are pricing it to be within the target range in 2027. So certainly the ambition right early we like what we are seeing on 2026. We still have the reserve set the high end of the range, but that is absolutely our objective, Brian.

Michael Robert Katz: Yeah. The only thing I would add, Heather, like, you step back and look at the big picture here, Ryan. You know, we when you look at late 24, we came in to get as much rate as we possibly could. 2025, as Jay talked about, you know, we put our teams in place We were able to get more premium or get more rate and still hold premium flat. that is really that January 26 business. What we are seeing in the middle of this year is getting even more rate, and that is just I think a non to the to the market coming to us.

You know, we have seen that margins are deteriorating in the industry. that is a that is a calendar year 2025 to 24 comparison and that is what is really allowing us to go get that rate. We got a lot of confidence in what we are seeing early as we head into the fall and price January 27. But every piece of business to Heather's point that we have been pricing this year, last year was with the goal of getting this back to target margins.

Ryan Joel Krueger: Thanks. And then just a quick 1 on record keeping fees. They were flat sequentially despite the strong flows you had this quarter. Was just curious, is that more timing related on when the flows came in? And as a result, we see some tailwind there in the second half of the year?

Heather Hamilton Lavallee: Yes. Thanks. Jay, we will let Mike start and Jay can add some color.

Michael Robert Katz: Yeah. You alluded to it, Ryan. it is just timing. We when you look at kind of the timing of when flows came in and when flows came out in the first quarter. So we expect really healthy fee based margins in second half of the year and part of that is due to the organic commercial momentum in the second quarter. And then obviously we feel really good about the macro heading into third quarter from quarter much different than what it was from second to first.

Jay Stuart Kaduson: Yeah. And, Ryan, you know, you know, we expected and we kind of shared last quarter, there we expected to have strong commercial momentum in Q2, and we did. We generated over 8 billion of total defined contribution net inflows. And given the visibility we have in the pipeline, we remain positive on the second half of 26. You know, while the flows do matter on this commercial momentum and also focused on our continued revenue growth. And so if you look at a trailing 12-month revenue being up 10%, high 38% margin, fee income is up 16% as Mike referenced, and that fee income continues to be an important part of our growth story.

It now represents, as you heard, 60% of our operating revenue. But we also completed the final phase of the OneAmerica integration during the quarter, Not only did that provide additional for service flows, but it enhanced our distribution scale and our overall capabilities in certain product areas. And so as I think about our position as a top 5 defined contribution provider, if you look at it by participant accounts, you know, we exceeded 10 million in Q2 That reflects the strength of the distribution as I referenced. You know, our service model enhancements we have been making and overall, the ability to deliver consistent growth in our largest business.

Operator: Our next question is from Jian Huang with Morgan Stanley. Please proceed.

Chen: Hey, good morning. I am calling for Bob. Just want to ask about the retirement flows. So if we look at the quarter real quick record keeping flows are quite strong and full service flows are improving from 1Q. So just curious, is that like still like the OneAmerica integration is still impacting the surrenders? And are you expecting the surrenders to trend down in the second half?

Heather Hamilton Lavallee: Yes. Good morning. Thank you for the question. I will let Jay add color, but it is really 2 primary things. You are still seeing the effect of OneAmerica flows in the second half, which we expect to moderate. And we do see the impact on higher participant account balances from equity markets. But Jay, please add more color.

Jay Stuart Kaduson: Yeah. that is right. I mean, if you think about the broader industry, there is this equity market effect of full service flows in Q2. I mean, participants surrenders are really common in this high equity market environment. And, you know, as you heard in Heather's opening, all first service sales in a really important market for us, emerging markets is up 30%. You know, that broader step back is pretty clear. This was another quarter, another example of delivering strong results, as I said, in our largest business. We do again, that visibility into the pipeline, you know, we do remain highly positive on the second half of the year.

Just to kind of answer your OneAmerica question, that integration's complete. Right? So we completed the final phase during the quarter. And that transaction has really validated, I will say, our disciplined acquisition strategy and is establishing us really as a strategic acquirer in the retirement space. The benefits of that transaction continue to materialize. We have added new capabilities. As a reference, broader distribution and right now incremental sales momentum we are getting from that acquisition. Supported by strategic relationships Those capabilities are in areas you should think of, like, ESOP and self directed accounts and tax exempt capabilities. So really happy with both the talent we acquired, the financial results, the new capabilities that are driving commercial momentum.

Chen: Okay. That sounds good. And the second 1, just want to follow-up on the strong pipeline on the record keeping. In the rest of the year. Just want wondering if you have any update on the pipeline since like 1Q. Yes.

Heather Hamilton Lavallee: I will take it. Just really building on what Jay talked about is we have got visibility into large plan implementations in the second half of the year. As we talked about in the first quarter call, we are confident in our ability to deliver positive flows. As Jay broadened the point, we think retirement in our business our margins has held up well. We are driving fee based revenue. So it is more than a flow story in retirement. Our largest business continues to be our most profitable and is set up to for us to be a strong leader in the retirement market. But, you know, all in all, a very strong outlook for the year.

Operator: Our next question is from Wesley Collin Carmichael with Wells Fargo. Please proceed.

Wesley Collin Carmichael: Good morning. Alts were a bit of a headwind in the quarter. it is kind of bounced around maybe the past few quarters, but just wondering if you have any color on how you are thinking about alt performance in the back half of this year?

Heather Hamilton Lavallee: Sure. Good morning, Wesley. Matthew will take your question.

Matthew Toms: Yeah. Wesley, let me unpack that a little bit for you. So you are right. Second quarter, alternative income was a modest loss, 2.5% annualized. that is a weak result and compares unfavorably to the first quarter return, which was just over 8% and our long term expectation of 9%. Some context on that, our alts portfolio, as you know, is focused on buyout private equity. And this quarter's result was impacted both by the consistently lower realizations within the industry that is been well publicized, along with the broad volatility in broader equity markets in Q1, which in informs the valuation period that is coupled, of course, with the push higher in interest rates.

So that is the valuation backdrop Importantly, our diversified private equity holdings within this portfolio continue to be in harvest mode. We look to moderate the size of the portfolio and focus more on income oriented and fee generative opportunities. Going forward. And that is nothing new. that is been a path over years, so expect that to, to continue. Also importantly, looking forward, the strength of the broader market in 2Q and moving into Q3 does provide a favorable backdrop. So we do think moving forward, and Mike alluded to this in his remarks, that there is a scope for an improved result in the next quarter.

Long term, not adjusting the 9% target, we will well out-achieve that over time. But, obviously, some volatility from quarter to quarter.

Wesley Collin Carmichael: Thanks. that is helpful. And then just wanted to come back to the broader discussion on expenses. I know you are always managing expenses, but if I think back it sounds like coming into maybe 2025 and 2026, admin expenses were gonna be a bit elevated with some investments into the business. But with this announcement this quarter, it seems like there is real explicit actions for savings. So wondering, has anything really changed? And what drove the decision on severance actions now?

Heather Hamilton Lavallee: Yes, Wesley, it is Heather. I will start. Really, this is just part of the discipline and DNA of us as a firm is always being focused on disciplined expense management. Here, we took operating efficiencies across our business, specifically within workplace. If you go back, Mike and I had been signaling earlier in the year of our plan to self fund the growth investments. And so think about us as really being very disciplined with not only capital, but our operating overall operating expenses. And so within the organization, we have been focused on reallocating expenses into our higher growth areas, still managing our business to targeted unit cost levels and operating efficiency.

And that is just really how we operate. This is not part of any special program, but we think this is as part of, you know, how good management teams run companies. Thank you.

Wesley Collin Carmichael: Sure. Thank you.

Operator: Our next question is from Joshua David Shanker with BofA Securities. Please proceed.

Joshua David Shanker: Yes, thank you and good morning everybody. You talked about really seeing the fruits of going after price in the stop loss market. But obviously, 2Q has not been an important quarter for sales and benefits, but all the lines of business tend to have weaker sales than a year ago. Price maybe part of the reason, maybe you are not as competitive as you were before. Can you go product by product and talk about what is happening in sales on the benefit side?

Heather Hamilton Lavallee: Yeah, Joshua. I will let Jay unpack that for you. But if you think about when we have been talking about the margin improvement employee benefits, been beyond stop loss. We have been focusing in on improving margins across every line of business within. And but yet we still believe we are very, very well positioned for continued growth in this business. But Jay, please?

Jay Stuart Kaduson: Yeah, sure. And I will start here, Joshua. I mean, as Mike referenced, to start, as a step back, the total aggregate loss ratio improved 5 points to 74% year over year. So we like you know, the team's really been focused around the execution on our pricing actions. For the portfolio, and that is translated into that overall loss ratio improvement. You know, I talked about voluntary, specifically sales being up 7% on a trailing 12-month basis being a top 3 provider there. Really happy with that business fundamentals and the feedback we are getting in the marketplace, whether it be on a standalone basis or in a bundle. Is really, really strong.

In group life, you know, historically, Q2 is not a big sales quarter for group life. Right? We manage that business on full year results. With that said, you know, in Group Life, sales are up 5% on a trailing 12-month basis. And when I look at life and the broader employee benefits portfolio that you are referencing, you know, our brokers and employers are starting to look for these bundled solutions and our leave administration sits at the center of that bundle. So through Q2, 48% of all of our new life and absence and disability cases were bundled with supplemental health.

We are a market leader, and that is up from 42% last year You know, a little bit of a step back while our leave continues to grow in Q2. it is in early days. You know, this solution is helping to broaden. You know, if I think about our value proposition, across the entire portfolio. So as a reminder, we launched that integrated leave and disability claim solution in January of this year, you should think about it as bringing together an AI enabled end to end workflow, which is something our customers were really looking for And this simplifies the experience for our employees Right now, it is improving the compliance for our employers, which is really important.

And then overall, it strengthens our ability to bundle and retain clients. And I talked about the importance of bundle. So overall in the portfolio, I do not look at Q2 as a point in time. I look at full year results and I look at our trailing 12-months. And the business is growing.

Joshua David Shanker: Can we say that business that a year ago written is renewing in a different quarter than 2Q today? Or the business that you wrote in 2Q last year does not meet your pricing appetite this year, which explains part of the reason for the decline.

Michael Robert Katz: Hey, Joshua, can I ask you just a clarifying question? Are you asking across the broader employee benefit portfolio or specific to a certain product line?

Joshua David Shanker: No across the portfolio. I mean, we do not have so much detail, but there is 3 or 4 lines and they are down. I understand we should measure over a 12 month basis, but I assume there were renewals that were done in Q2 2025 that came up for renewal in Q2 2020, or maybe they are renewing in a different quarter this year.

Michael Robert Katz: Yeah. Hey, Joshua. it is Mike. Like and you can see in the in force premium. I get to your point on renewals. Jay was talking about sales. The voluntary line is up. I think what you are seeing is in group life with the renewal premiums being down. And as Heather mentioned, we have had this broad thinking around making sure that we are growing margins. that is going to be the most impactful piece on overall cash generation increase, earnings increases in EB. Group Life the puck is moving here. We have talked about this. We have had a handful of quarters here now where the loss ratios have been well below 77 to 80%.

So we are adjusting for that. I think in some ways, life is like on this kind of a year or 2 ahead of where stop loss was coming out of COVID. So there is a little bit of adjustment for that as we are working through some of the renewals. You see that in the results, but I think the step back is we feel good about where we are heading into the fall. Jay and team are making some adjustments around how we think about pricing, I think that will make us a little more competitive on that product line.

Joshua David Shanker: Thanks, Joshua.

Operator: Our next question is from Pablo Singzon with JPMorgan. Please proceed.

Pablo Singzon: Hi. Good morning. I had questions about the investment management business. So I think if you look historically flows and institutional have been quite good. For the past few years, but in retail, they were positive, but turned negative the past 2 quarters. So just hoping you could provide perspective on what is going on there?

Heather Hamilton Lavallee: Good morning, Pablo. Matthew will unpack that for you.

Matthew Toms: Yeah. Hi, Pablo. Happy to unpack that. So retail, you are right. Strong quarter, mostly driven by institutional as a reference. Within retail, it is really 2 different stories. In The US, happy to see positive momentum around key products, particularly in our fixed income franchise as well as in special pack specialty equity components like our small cap growth, a really standout product with strong demand. And in general, happy with the fee rate we are getting on that mix of business. The overall result for the quarter was actually dampened by some redemption activity overseas. If we think about the first half of the year, market volatility and some macro uncertainty, the international arena.

We think that is what is causing higher redemption rates. While gross sales levels still very strong. that is an important indicator as well. So as we look into the second half, we have reason to believe that some of that redemption activity will moderate. The top line sales growth will persist, and that could drive an improved outlook for the second half of the year in retail, specifically.

Pablo Singzon: Got it. And just as a follow-up on investment management, I think previously you had laid out a 2% organic growth target for the year. Mike has referenced, I think, a legacy plan that might run off the back half of the year. So I guess if you put everything together, how comfortable are you sort of, like, you know, hitting the 2% and effectively, you know, seeing growth accelerate in second half of the year? Thanks.

Matthew Toms: Yes. So let me unpack that a little bit for you. I will go to the run off business first. Correct. Like we are never certain exactly how the future will play out second half of the year, but it is important to call out we do think some headwinds. This is sub advisor related business in The U. S. Not currently distributed by Voya. The asset base has been in rundown mode, and we like the to be able to revive that with our own distribution channels moving forward. So in subadvisor space, you will have some lumpy ins and lumpy outs.

We want to signal that we while not finalized, wanna put that out as far a headwind. that leans against that long term growth rate. Importantly, as Mike referenced, not a meaningful revenue impact in 2026 and we have a broad array of strategies and products that are performing well that are positioned to grow and can provide growth into the second half of the year and beyond. More broadly, sorry, the 2% level, that is a long term number. Last year, quite a bit above it, just shy of 5%. We are still out kicking the industry quite meaningfully with our organic growth rate. There will be some ebbs and flows. We like the pipeline.

We like the top line. And as you referenced, we like the revenue we are getting. So while net cash flow is super important, our revenue, delta year over year, prior quarter year is up 8%. And that shows that we are not just getting that cash flows, we are getting revenue that comes with that. that is ultimately what is driving that double digit operating income growth. Thanks, Pablo.

Operator: Our next question is from Suneet Kamath with Jefferies. Please proceed.

Suneet Kamath: Thanks. I wanted to ask about the wealth management business. Heather, I think you alluded to 10 million accounts. But I was wondering if you could give some data on the AUM that you have in that strategy and what is sort of the average account size Yeah.

Heather Hamilton Lavallee: Happy to, Suneet. I will let, Jay talk about that. But you will what you can see in the supplement is about $33 billion of assets within wealth management. And as I referenced 12% of revenue growth. But also we will have Jay talk a little bit more about what we are seeing within the wealth management build out.

Jay Stuart Kaduson: Yeah. Suneet, if you think about that AUM number, you know, to answer your question, you know, that is 60% up year over year. Heather referenced a revenue growth of 12% You know, if you think about the increasing demand right now from plan sponsors and employers, You know, they are asking for retail advice and guidance at the workplace Think about 3, 4, 5 years ago, that gateway was not as open as it is now. And so you know, given our position in the workplace, you know, we are positioned really well to continue to think about growth from a wealth management.

It gives us just quite frankly a stronger way to retain and recapture and even deepen the relationships with our plant sponsors and employers by providing the solutions at the right moment for their employees You know, our adviser count year to date, just to give you a little bit, is up 20%. We have now got, over 650 advisers Primarily, that growth is in the licensed sales desk advisers, which is supporting our growing customer base. And while there is if you think about that 10 million you know, participants in our retirement business, You know, I am also really pleased with the productivity of these advisers.

So we are getting through and achieving our productivity targets, which you know, gets to the experienced management team we have been recruiting and the training that is that sits there and, quite frankly, the experienced advisers we have been able to bring over from other sales desks. You know, in addition to that, as you think about this, we have made some tech enhancements that are elevating the productivity of our advisers. So we just continued to optimize the business and our position for growth.

Suneet Kamath: Okay. Thanks for that. And then Heather, I wanted to ask about Benefitfocus because you did the deal a couple of years ago. I think there was a lot of enthusiasm around it. And I do not know if you have just changed the name of it or whatever, but you do not really talk about it anymore. So I was just wondering like what is going on with that business post acquisition. And part of the reason I ask is I think some other companies that made similar acquisitions ended up either exiting the business or taking some goodwill charges. And I just want to get an update on that from you guys. Thanks.

Heather Hamilton Lavallee: Yeah. Oh, yeah. Thanks, Cindy, for the question. And, you know, I will start is we continue to like the strategic importance of benefits administration across our workplace and employee benefit capability. We will say that it has taken us longer to get to the economics that we expected within Benefitfocus. But we feel like we are we are really stabilizing and moving into the next chapter. And, you know, why am I confident in this is that we have seen the revenues have been stable. They have been roughly $200 million Jay will talk a little bit about the look forward since we acquired, but we have seen real significant improvement in client retentions.

We have also seen improvement in client satisfaction both when we are doing onboarding and ongoing servicing and then I will toss it to Jay. But we think that this is a significant avenue of our workplace to wealth management strategy. So, Jay?

Jay Stuart Kaduson: Yeah. I could not agree more. As you think about, you know, benefit focus, you know, very much in market, very much a core part of our workplace business. As you think right now about employers, right, they are increasingly asking us for integrated solutions. And so we are leveraging that benefits administration platform to connect our clients with other complementary VoIP capabilities like wealth management where we can create what I would say is a stronger growth engine across you know, the entire enterprise. More specifically, Benefitfocus from a pipeline perspective through Q2 is up 32% over prior period. You know, sales are tracking ahead of last year by over 8%.

And more importantly, our average sold case size is up 80% year over year. And more broadly, Benefitfocus, if you think about what it is actually doing, it is helping customers right now. And we think about this a lot, bend the health care cost curve, which is critically important. You know, the it is guiding employees really to effective health and savings decisions, which is 1 of the more important decisions made at the workplace, and it increases that financial protection as you adopt greater adoption of those volatile benefits that are offered through that platform. Overall, this fits really well into our workplace portfolio and a business we look forward to continuing to grow.

Michael Robert Katz: And, Suneet, just to say, it is Mike. Just 1 other piece, you know, you can follow along with us. When you look at the benefit business, the fee based margin line, I mean that is basically benefit focused, Benadmin. You can see that at 227 million over the last 12 months. So just want to follow along with BenAdmin as we move forward, that is that is where that sits.

Operator: Our next question is from Wilma Burdis with Raymond James. Please proceed.

Wilma Burdis: Hey, good morning. How do you see the long term pricing trend for stop loss? Realize it is been over 20% for the last few years, but are you seeing any indication that is starting to normalize more toward longer term high teens? Thanks.

Michael Robert Katz: Hey, Wilma. Yeah. Right now, it is very consistent. Think over time absolutely I think you would expect this to normalize. Again, things go through cycles where this part of the cycle and I talked about the market coming to us We got more rate, when we came into this year. We are getting more rate this year. Now, as far as we look at first dollar inflation leverage trend, you know, we expect it to be at similar elevated levels. So the key thing and Jay talked about this too. it is it is not changing the demand for this product. I mean, RFPs are up double digits.

They are probably doubled over the last, you know, 5 to 6 years because it is even more expensive what companies are dealing with respect to First Dollar if you wanna be fully insured. So this is a really valuable product in the marketplace, and that is why we have been able to get rate and our expectation is we are gonna be able to do that again in the fall. And it is why you hear us talking a little bit more about modest premium growth versus more of that kind of flat premium growth we saw coming into this year. Thank you.

Wilma Burdis: And it seems like there is more industry interest in growing 401(k)s whether that is you know, to add private 401(k)s or for other reasons. In the last 10 years or so, it is been very focused on annuities, so it seems like that shifting a little bit. What do you think is underappreciated about the opportunity in 401(k)s and in your business? Thanks.

Heather Hamilton Lavallee: Yeah. Wilma, I guess I guess I would, and just say, I think 1 of the things that is underappreciated is the position we hold in this market. If you think about both in our prepared remarks and our follow on is that we have been growing in every segment we serve. Both in terms of top line, we have had very strong client retention. You look at the results that we have demonstrated from a margin perspective for well over a decade.

We have been consistently within our target margins and even on the high end, if not above, for a period of time and that just goes to good expense discipline, how we have been running the business and that what we are super excited about and I think why there continues to be interest is what Jay's been talking about with wealth management. There is a significant opportunity in the shift from our clients where they are now expecting these services from their retirement providers. Because at the end of the day, most American workers do not have access to a financial adviser.

And the retirement provider and what we are building in wealth management is a great avenue to be able to provide that financial guidance directly through the workplace. So that is 1 of the reasons why we are increasingly bullish about our largest and most profitable business. Thank you.

Wilma Burdis: Thanks, Wilma.

Operator: Our final question is from Andrew Kligerman with TD Cowen. Please proceed.

Andrew Kligerman: Right. Last but not least. Kind of a more nuanced follow-up on flows Could you-- Jay, could you talk to full service and retirement? It sounds like you are saying based on what you said in earlier questions that you can see that flow reversing to positive in the not too distant future. And likewise to Matthew, on investment management, with retail down the last 2 quarters. it is been a little choppy, do you think I mean, sounds like you are not going to get to the 2% net flow contribution to assets this year in the back half but longer term that is what you see.

So just kind of more nuanced on the flows in each of the big businesses.

Heather Hamilton Lavallee: Yeah. I think, maybe, Andrew, I will I will, try to summarize what I think we heard from both Matthew and Jay this morning is on the retirement side, you heard us talk about positive flows for the full year in full service. As you kind of flavored a little nuance because you saw still continuation of some of the outflows from the OneAmerica. We knew that expected. We expect that to moderate. We also saw higher participant outflows as a result of higher equity markets. But overall, feel very positive and the point we want to hit home is this is beyond the flow story. This really is also a revenue growth story for both businesses.

And as Matthew referenced, we think that the 2% organic growth rate is the right long term rate. We have had a couple of years of really out kicking that. Well above, you know, this year a little bit. Stay tuned just given a headwind. But more importantly, margins up, the revenue has been solid. And so when we think about these 2 businesses combined, talking about significant scale close to $1.2 trillion in assets between both businesses, growing a lot of commercial momentum, in both retirement and investment management.

Andrew Kligerman: Got it. And then just finally, you know, there was a lot of talk about you know, following the whole Tom's Capital situation about your stance on whether Voya would consider an offer for the company? And then the same thing on the med stop loss. It seems like you were disinclined toward both? But I am wondering if there is any change or any update you would make on that.

Heather Hamilton Lavallee: Yeah. I appreciate the question, Andrew. I will hit maybe 3 key points. is first we do not comment on rumors or headlines nor do we allow ourselves to get distracted by it. At the end of the day, the board and management, we are always gonna do what is in the best long term interest of shareholders. That includes restoring the stop loss business to the target margins that we have talked about. It also includes us executing on the organic growth plan that we have laid out.

And I think as you have heard this morning, Andrew, I will kind of reiterate why we continue to have such confidence and conviction in our growth strategy as we are delivering shareholder value today. We have got a lot of levers to be able to do that from the growth and retirement and investment management, the growth we are seeing in wealth management, the restorations in margins and employee benefits And all of those combined generate a significant amount of cash You think about us as a cash generation machine above 90%, and that gives us a lot of flexibility in how we deploy that. We have been returning a significant amount of capital back to shareholders.

Share buybacks and dividends And we still have the availability to invest in our business and pursue retirement roll ups, which we have a high bar for. So at the end of the day, Andrew, I think it is a great opportunity to close as got a lot of confidence and conviction and how we deliver value for shareholders today. as well as into the future.

Operator: We have reached the end of our question and answer session. That will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.