Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
For the purposes of this discussion, the terms "Voya," "the Company," "we," "our," and "us" refer to Voya Financial, Inc. and its subsidiaries.
The following discussion and analysis presents a review of our results of operations for the years ended December 31, 2025 and 2024, and financial condition as of December 31, 2025 and 2024. This item should be read in its entirety and in conjunction with the Consolidated Financial Statements and related notes contained in Part II, Item 8. of this Annual Report on Form 10-K. For discussion and analysis of our results of operations for the years ended December 31, 2024 and 2023, refer to our 2024 Annual Report on Form 10-K filed with the SEC on February 21, 2025.
In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Actual results may differ materially from those discussed in the forward-looking statements as a result of various factors. See the Note Concerning Forward-Looking Statements.
Overview
We are a leading provider of workplace benefits and savings solutions and technologies to U.S. employers, enabling better financial outcomes for their employees and for those who depend on their employees through our retirement solutions, retail wealth services, and a comprehensive portfolio of benefits products. We are also a leading international asset manager, built on a foundation of institutional-quality fixed income and private asset strategies, with a well-established presence in U.S. markets
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and a large and growing business managing retail and institutional equity, fixed income and blended strategies for clients in Europe and Asia.
We have returned approximately $380 million of capital to our shareholders through share repurchases and dividends and generated excess capital of approximately $775 million during 2025, while making strategic investments in our Retirement, Investment Management and Employee Benefits businesses.
We are focused on executing our mission to make a secure financial future possible—one person, one family and one institution at a time. Voya’s scale, business mix, risk profile, and strong excess capital generation are competitive differentiators, and we have a clear path to increasing excess capital generation and Adjusted operating earnings growth via net revenue growth, margin expansion, and disciplined capital management.
On August 5, 2025, we announced we would return to using our prior segment names — Retirement and Employee Benefits, replacing Wealth Solutions and Health Solutions, respectively. The naming convention better reflects and aligns with the services and solutions we provide today in the client markets served by those segments. The change in names did not affect the amounts reported by segment in our financial statements. We will continue to provide our products and services through three segments: Retirement, Investment Management and Employee Benefits.
Retirement
Our Retirement segment provides retirement plan solutions and administration technology and services to employers. These products and services include full-service and recordkeeping-only defined contribution plan administration, stable value and fixed general account investment products, and non-qualified plan administration. It also includes tools, guidance, and services to promote the financial well-being and retirement security of employees. Additionally, we provide individual retirement accounts and financial guidance and advisory services that enables us to deepen relationships with our retirement plan participants.
Revenue is earned from a diverse and complementary business mix and consists primarily of fee and investment income. Fee income is generated from asset based and participant based administrative, recordkeeping and advisory fees. Investment income derives from our general account assets and other funds. Because a significant portion of our revenues is tied to account values, our profitability is determined in part by the amount of assets we have under management, administration or advisement. This in turn depends on sales volumes from new and existing clients, net deposits from retirement plan participants, asset retention, and changes in the market value of account assets. Our profitability also depends on the difference between the investment income we earn on our general account assets, or our portfolio yield, and crediting rates on client accounts.
Investment Management
With global distribution capabilities, we offer domestic and international fixed income, equity, alternatives and multi-asset products and solutions across market sectors and investment styles through our actively managed, full-service investment management business. We aim to provide positive investment results that are repeatable and consistent, and deliver research-driven, risk-adjusted, client-oriented investment strategies and solutions and advisory services across asset classes, geographies and investment styles.
Through our institutional distribution channel and our Retirement and Employee Benefits businesses, we serve a variety of institutional clients, including public, corporate and multiemployer defined benefit and defined contribution retirement plans, endowments and foundations, and insurance companies. We are a market leader in providing third-party general account management services to insurance companies, with a focus on public and private fixed income asset strategies, and a client service model adapted for the particular needs of insurance company clients. We also serve individual investors by offering our mutual funds, separately managed accounts, and private and alternative funds through an intermediary-focused distribution platform or through affiliate and third-party retirement platforms. Our scaled and growing international retail business is conducted through sub-advisory agreements with investment vehicles sponsored by affiliates of AllianzGI and distributed in Europe and Asia.
Investment Management’s primary source of revenue is management fees collected on the assets we manage. These fees are typically based on a percentage of AUM. In certain investment management fee arrangements, we may also receive performance-based incentive fees when the return on AUM exceeds certain benchmark returns or other performance hurdles. In addition, and to a lesser extent, Investment Management collects administrative fees on outside managed assets that are administered by our mutual fund platform and distributed primarily by our Retirement segment. Investment Management also receives fees as the primary investment manager of our general account, which is managed on a market-based pricing basis.
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Finally, Investment Management generates revenues from a portfolio of seed capital investments in private equity, collateralized loan obligations and various funds.
Employee Benefits
Our Employee Benefits segment provides workplace employee benefits including group life insurance, disability insurance, leave management services, supplemental benefit insurance, financial wellness, and decision support products and services to mid-size and large corporate employers and professional associations. We serve the employer market by providing stop-loss coverage to employer plan sponsors that self-fund their pharmaceutical and medical benefits plans. In addition, we provide Health Account Solutions (Health Savings Account ("HSA")/Flexible Spending Account ("FSA")/Health Reimbursement Arrangements ("HRA") and COBRA administration).
Our Employee Benefits segment also provides benefits and plan administration services to employers and health plans through our Benefitfocus business. Benefitfocus provides market-leading benefits enrollment and administration services to employers and plan enrollment services to health plans. It also provides a benefits marketplace through which employees can select and enroll in voluntary benefits offered by their employers. Our Benefitfocus platform is open-architecture and product-agnostic, enrolling and administering benefits from a variety of third-party carriers.
In addition, we also provide decision support tools through the Benefitfocus enrollment platform and through our MyVoyage application, which provides a comprehensive guidance tool for employees to see their entire financial picture including their workplace benefits and savings. We support employers by taking on the administrative burden of benefits enrollment and administration, leave management, COBRA administration, and other obligations.
The Employee Benefits segment generates revenue from premiums and fees, investment income, mortality and morbidity income, and policy and other charges. Underwriting income comprises the majority of revenues in this segment and derives from the difference between premiums and mortality charges collected and benefits and expenses paid for group life, stop loss and voluntary benefits. Fee income is generated from services provided on benefits administration, leave management, HSA/FSA/HRA and COBRA administration and proprietary decision support tools. Investment income is driven by the spread between investment yields and credited rates (the interest and income that is credited to the policies) to policyholders on voluntary universal life, whole life products, and HSA invested assets, as well as the spread earned on policyholder reserves and target surplus.
Business Update
On January 2, 2025, we completed the acquisition of the full-service retirement plan business of OneAmerica Financial through the purchase of legal entities and an indemnity reinsurance agreement. The acquisition adds scale and a broader set of capabilities to the Company's full-service business in Retirement, including incremental assets in emerging and mid-market segments, employee stock ownership plan capabilities, and new distribution partnerships. The purchase consideration included $50 million in cash paid at closing and contingent consideration of up to $160 million based on plan persistency and transition incentives to be paid in 2026.
Trends and Uncertainties
Throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), we discuss a number of trends and uncertainties that we believe may materially affect our future liquidity, financial condition or results of operations. Where these trends or uncertainties are specific to a particular aspect of our business, we often include such a discussion under the relevant caption of this MD&A, as part of our broader analysis of that area of our business. In addition, the following factors represent some of the key general trends and uncertainties that have influenced the development of our business and our historical financial performance and that we believe will continue to influence our continuing business operations and financial performance in the future.
Market Conditions
Extraordinary monetary accommodation to support a global economy negatively impacted by the pandemic is being unwound. Inflationary pressures related to easing monetary and fiscal policies, stagflationary, and global supply chain frictions, have been addressed by sharply tighter monetary policy. As the continued impact of sharply tighter global monetary policy works through the real economy, an increase in market volatility could affect our business, including through effects on the rate and spread component of yields we earn on invested assets, changes in required reserves and capital, and fluctuations in the value of our AUM and AUA. These effects could be exacerbated by uncertainty about future fiscal policy, changes in tax policy, the scope
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of potential deregulation, levels of global trade, and geopolitical risk. In the short- to medium-term, the potential for increased volatility and slowing economic growth can pressure sales and reduce demand as consumers hesitate to make financial decisions. Financial performance can be adversely affected by market volatility as fees driven by AUM fluctuate, hedging costs increase and revenue declines due to reduced sales and increased outflows. As a company with strong retirement, investment management and insurance capabilities, however, we believe the market conditions noted above may, over the long term, enhance the attractiveness of our broad portfolio of products and services. We will need to continue to monitor the behavior of our customers and other factors, including mortality rates, morbidity rates, and lapse rates, which adjust in response to changes in market conditions in order to ensure that our products and services remain attractive as well as profitable. For additional information on our sensitivity to interest rates and equity market prices, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K.
Interest Rate Environment
We believe the interest rate environment will continue to influence our business and financial performance in the future for several reasons, including the following:
• Our general account investment portfolio, which was approximately $38.2 billion as of December 31, 2025, consists predominantly of fixed income investments. At prevailing interest rate levels, new money investments or reinvestment of proceeds from maturities and asset paydowns are likely to be accretive to the overall portfolio earned rate. Higher interest rates, however, also reduce the prices of fixed income investments and the proceeds of bonds that are sold before maturity in the secondary market.
• Several of our products pay credited rates such as fixed accounts and a portion of the stable value accounts included within defined contribution retirement plans. During periods of rising interest rates, credited rates on our products generally lag the current market rates, which can result in elevated outflows from these products due to the availability of higher return investment options.
For additional information on the impact of the interest rate environment, see The level of interest rates may adversely affect our profitability, particularly during a period of rapidly increasing interest rates or in the event of a recurrence of a low interest rate environment in Risk Factors in Part I, Item 1A. of this Annual Report on Form 10-K. Also, for additional information on our sensitivity to interest rates, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K.
Seasonality and Other Matters
Our business results can vary from quarter to quarter as a result of seasonal factors. For all of our segments, the first quarter of each year typically has elevated operating expenses, reflecting higher payroll taxes, equity compensation grants, and certain other expenses that tend to be concentrated in the first quarter. Other seasonal factors that affect our business include:
Retirement
• The first quarter of each year tends to have the highest level of recurring deposits in the defined contribution business, due to the increase in participant contributions from the receipt of annual bonus award payments or annual lump sum matches and profit sharing contributions made by many employers. Withdrawals also tend to increase in the first quarter as departing sponsors change providers at the start of a new year.
• In the third quarter of each year, education tax-exempt markets typically have the lowest recurring deposits, due to the timing of vacation schedules in the academic calendar.
• The fourth quarter of each year tends to have the highest level of single/transfer deposits due to new defined contribution plan sales as plan sponsors transfer from other providers when contracts expire at the fiscal or calendar year-end. Recurring deposits tend to be lower in the fourth quarter as higher paid participants scale back or halt their contributions upon reaching the annual maximums allowed for the year. Finally, withdrawals tend to increase in the fourth quarter driven by eligible participants' annual required minimum distribution and, as in the first quarter, due to departing plan sponsors.
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Investment Management
• In the fourth quarter of each year, performance fees are typically higher due to certain performance fees being associated with calendar-year performance against established benchmarks and hurdle rates.
Employee Benefits
• The first quarter of each year tends to have the highest Group Life loss ratio. Sales for Group Life, Stop Loss, and Voluntary Benefits also tend to be the highest in the first quarter, as most of our contracts have January start dates in alignment with the start of our clients' fiscal years.
• The third quarter of each year tends to have the second highest Group Life, Stop Loss, and Voluntary Benefits sales, as a large number of our contracts have July start dates in alignment with the start of our clients' fiscal years.
• The fourth quarter of each year tends to have higher Voluntary and Stop Loss Claims. This seasonality is generally driven for Voluntary Benefits by policyholders reaching the end of the annual enrollment period and for Stop Loss, by policyholders' medical claims reaching certain deductibles or specified limits. Adjustments are made in the incurred but not reported reserve to address seasonal effects. In addition, expenses related to seasonal workforce support costs due to annual enrollment tend to be higher.
In addition to these seasonal factors, our results are impacted by the annual review of assumptions related to future policy benefits, which we generally complete in the third quarter of each year, and annual remeasurement related to our employee benefit plans, which we generally complete in the fourth quarter of each year. See Critical Accounting Judgments and Estimates in Part II, Item 7. of this Annual Report on Form 10-K for further information.
Results of Operations
Operating Measures
In this MD&A, we discuss Adjusted operating earnings before income taxes and Adjusted operating revenues, each of which is a measure used by management to evaluate segment performance. For additional information on each measure, see the Segments Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Assets Under Management ("AUM") and Assets Under Advisement ("AUA")
A substantial portion of our fees, other charges and margins are based on AUM. AUM represents on-balance sheet assets supporting customer account values/liabilities and surplus as well as off-balance sheet institutional/mutual funds. Customer account values reflect the amount of policyholder equity that has accumulated within retirement, annuity and universal-life type products.
AUM includes general account assets managed by our Investment Management segment in which we bear the investment risk, separate account assets in which the contract owner bears the investment risk, and off-balance sheet institutional/mutual funds. AUM-based revenues increase or decrease with a rise or fall in the amount of AUM, whether caused by changes in capital markets or by net flows. AUM is principally affected by net deposits (i.e., new deposits, less surrenders and other outflows) and investment performance (i.e., interest credited to contract owner accounts for assets that earn a fixed return or market performance for assets that earn a variable return). Separate account AUM and institutional/mutual fund AUM include assets managed by our Investment Management segment, as well as assets managed by third-party investment managers. Our Investment Management segment reflects the revenues earned for managing affiliated assets for our other segments as well as assets managed for third parties.
AUA represents accumulated assets on contracts pursuant to which we provide administrative and advisement services, distribution coverage, relationship management, client servicing, and product guarantees for assets managed by third parties. These contracts are not insurance contracts and the assets are excluded from the Consolidated Financial Statements. Fees earned on AUA are generally based on the number of participants, asset levels or the level of services or product guarantees that are provided.
Our consolidated AUM/AUA includes eliminations of AUM/AUA managed by our Investment Management segment that is also reflected in other segments’ AUM/AUA and adjustments for AUM not reflected in any segments.
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The following table presents AUM and AUA as of the dates indicated:
As of December 31,
($ in millions)
AUM and AUA:
Retirement
Investment Management
Employee Benefits
Eliminations/Other (1)
Total AUM and AUA (2)
AUM
AUA
Total AUM and AUA (2)
(1) Includes eliminations for AUM and AUA in our Retirement and Employee Benefits segments that are managed by our Investment Management segment and also reported in their AUM and AUA.
(2) Includes AUM and AUA related to divested businesses, for which a substantial portion of the assets continue to be managed by our Investment Management segment.
Terminology Definitions
Sales Statistics
In our discussion of our segment results under Results of Operations - Segment by Segment , we sometimes refer to sales activity for various products. The term "sales" is used differently for different products, as described more fully below. These sales statistics do not correspond to revenues under U.S. GAAP and are used by us as operating statistics underlying our financial performance.
Net flows are deposits less redemptions (including benefits and other product charges).
Sales for Employee Benefits products are based on a calculation of annual premiums, which represent regular premiums on new policies, plus a portion of new single premiums.
Total gross premiums and deposits are defined as premium revenue and deposits for policies written and assumed. This measure provides information as to growth and persistency trends related to premium and deposits.
Other Measures
Net Revenue is a non-GAAP measure defined as Adjusted operating revenues less Interest credited and other benefits to contract owners/policyholders.
Total annualized in-force premiums and fees are defined as a full year of premium at the rate in effect at the end of the period. This measure provides information as to the growth and persistency trends in premium and fee revenue.
Interest adjusted loss ratios are defined as the ratio of benefits expense to premium revenue exclusive of the discount component in the change in benefit reserve. This measure reports the loss ratio related to mortality on life products and morbidity on health products.
Net gains (losses) and Net investment gains (losses) include changes in the fair value of derivatives. Increases in the fair value of derivative assets or decreases in the fair value of derivative liabilities result in gains. Decreases in the fair value of derivative assets or increases in the fair value of derivative liabilities result in losses.
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Results of Operations - Company Consolidated
The following table presents our Consolidated Statements of Operations for the periods indicated:
Year Ended December 31,
($ in millions)
Change
Revenues:
Net investment income
Fee income
Premiums
Net gains (losses)
Other revenue
Income related to CIEs:
Total revenues
Benefits and expenses:
Interest credited and other benefits to contract owners/policyholders
Operating expenses
Net amortization of DAC and VOBA
Interest expense
Operating expenses related to CIEs:
Total benefits and expenses
Income before income taxes
Income tax expense (benefit)
Net income
Less: Net income attributable to noncontrolling interest and redeemable noncontrolling interest
Less: Preferred stock dividends
Net income available to our common shareholders
Consolidated - Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Total revenues
Total revenues increased $139 million from $8,050 million to $8,189 million. The following items contributed to the overall increase.
Net investment income increased $244 million from $2,074 million to $2,318 million primarily due to:
• income from onboarded OneAmerica assets;
• overall market impacts to limited partnership valuations;
• active portfolio management; and
• interest rate movements.
The increase was partially offset by:
• higher investment expenses reflecting the additional OneAmerica assets.
Fee income increased $283 million from $2,113 million to $2,396 million primarily due to:
• onboarded OneAmerica assets; and
• higher average equity markets and strong commercial momentum in Retirement and Investment Management.
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Premiums decreased $264 million from $3,176 million to $2,912 million primarily due to:
• actions to improve the Stop Loss business.
Net gains (losses) worsened $103 million from a loss of $27 million to a loss of $130 million primarily due to:
• net unfavorable changes in derivative valuations due to interest rate movements; and
• impairments on available-for-sale fixed maturity securities.
This was partially offset by:
• a favorable change in mark-to-market adjustments on securities subject to fair value option accounting primarily due to interest rate movements.
Income related to consolidated investment entities decreased $38 million from $291 million to $253 million primarily due to:
• the deconsolidation of a collateral loan obligation in the prior period; and
• overall market impacts to interest income in collateralized loan obligations.
Total benefits and expenses
Total benefits and expenses increased by $101 million from $7,251 million to $7,352 million. The following items contributed to the overall increase.
Interest credited and other benefits to contract owners/policyholders decreased $258 million from $3,619 million to $3,361 million primarily due to:
• improved Stop Loss reserve developments and a smaller block of business in the current year compared to the prior year.
The decrease was partially offset by:
• interest credited associated with onboarded OneAmerica spread-based assets in Retirement; and
• increased Voluntary claims in Employee Benefits.
Operating expenses increased $365 million from $3,082 million to $3,447 million primarily due to:
• overall growth including onboarded business from OneAmerica and investments in the business tempered by disciplined spend management;
• higher performance-based compensation accruals in Corporate driven by strong business outcomes;
• higher pension expenses including an unfavorable change from the annual assumption update. See the Employee Benefit Arrangements Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information;
• increased severance accruals in the current period; and
• closing and integration costs incurred in the current period associated with the OneAmerica transaction.
The increase was partially offset by:
• lower premium-driven expenses in Employee Benefits driven by actions to improve the Stop Loss business; and
• lower integration costs associated with prior acquisitions in the current period.
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Income tax expense (benefit)
Income tax expense (benefit) increased $47 million from $57 million to $104 million primarily due to:
• the Security Life of Denver Company capital loss benefit that was recorded in 2024. For more details, see the Income Taxes Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K; and
• a decrease in the dividends received deduction.
Adjustments from Income before income taxes to Adjusted operating earnings before income taxes
For additional information on the reconciliation adjustments listed below, see the Segments Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Year Ended December 31,
Change
Income before income taxes
Less adjustments:
Net investment gains (losses)
Income (loss) related to businesses exited or to be exited through reinsurance or divestment
Income (loss) attributable to noncontrolling interests
Dividend payments made to preferred shareholders
Other adjustments (1)
Total adjustments to income (loss) before income taxes
Total adjusted operating earnings before income taxes
Adjusted operating earnings before income taxes by segment:
Retirement
Investment Management
Employee Benefits
Corporate (2)
Total including noncontrolling interest
Less: Earning (loss) attributable to the noncontrolling interest
Total
(1) Primarily consists of acquisition and integration costs associated with recent transactions and amortization of acquisition-related intangible assets. For the year ended December 31, 2025, also includes $48 million, pre-tax, of severance costs and a $24 million, pre-tax, net actuarial loss related to pension and other postretirement benefit obligations. For the year ended December 31, 2024, also includes $15 million, pre-tax, of severance costs, a $15 million, pre-tax, write-off of an intangible asset related to a prior acquisition, a $10 million, pre-tax, write-off of previously capitalized costs associated with an internal technology project which is no longer being pursued, and $5 million, pre-tax, related to an insurance company guaranty fund assessment net of premium tax credits, partially offset by a $26 million, pre-tax, net actuarial gain related to pension and other postretirement benefit obligations.
(2) Corporate is not a reportable segment.
Net investment gains (losses) changed $92 million from a gain of $50 million to a loss of $42 million primarily due to:
• net unfavorable changes in derivative valuations due to interest rate movements;
• impairments on available-for-sale fixed maturity securities; and
• favorable changes in equity securities in the prior year period.
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The change was partially offset by:
• a favorable change in mark-to-market adjustments on securities subject to fair value option accounting primarily due to interest rate movements.
Other adjustments worsened $37 million from a loss of $95 million to a loss of $132 million primarily due to:
• an unfavorable change from the pension annual assumption update. See Critical Accounting Judgments and Estimates in Part II, Item 7. of this Annual Report on Form 10-K for further information;
• increased severance accruals in the current period; and
• closing and integration costs incurred in the current period associated with the OneAmerica transaction.
The decrease was partially offset by:
• lower integration costs associated with prior acquisitions in the current period; and
• the absence of one-time expenses in the prior period not indicative of ongoing performance related to a write-off of previously capitalized costs associated with an internal technology project and a guaranty fund assessment, net of premium tax benefits.
Results of Operations - Segment by Segment
Adjusted operating earnings before income taxes is the measure of segment profit or loss management uses to evaluate segment performance. Adjusted operating earnings before income taxes should not be viewed as a substitute for GAAP pre-tax income. We believe the presentation of segment Adjusted operating earnings before income taxes as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis. Refer to the Segments Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information on the presentation of segment results, our definition of Adjusted operating earnings before income taxes and Adjusted operating revenues, which are both non-GAAP financial measures, and a reconciliation to the most directly comparable GAAP measure.
Adjusted operating benefits and expenses is a measure of our segment operating benefits and expenses and a non-GAAP financial measure. Each segment’s Adjusted operating benefits and expenses are calculated by adjusting Total benefits and expenses for the following items:
• Changes in market risk benefits;
• Benefits and expenses related to businesses exited or to be exited through reinsurance or divestment;
• Expenses attributable to noncontrolling interests;
• Dividend payments made to preferred shareholders are included in adjusted operating benefits and expenses to reflect expenses related to our common shareholders;
• Other adjustments include:
◦ Income (loss) related to early extinguishment of debt;
◦ Impairment of goodwill and intangible assets;
◦ Amortization of acquisition-related intangible assets as well as contingent consideration fair value adjustments incurred in connection with certain acquisitions;
◦ Expected return on plan assets net of interest costs associated with our qualified defined benefit pension plan and immediate recognition of net actuarial gains (losses) related to all of our pension and other postretirement benefit obligations and gains (losses) from plan amendments and curtailments;
◦ Commissions paid to our broker-dealers for sales of non-proprietary products, other items where the income is passed on to third parties, which are reflected in adjusted operating revenue with the fee income related to those products and the elimination of intercompany investment expenses included in Adjusted operating benefits and expenses;
◦ Other items not indicative of normal operations or performance of our segments or that may be related to events such as capital or organizational restructurings, including certain costs related to debt and equity offerings, acquisition / merger integration expenses, severance and other third-party expenses associated with such activities, and expenses attributable to vacant real estate.
The summary below reconciles Total benefits and expenses to Adjusted operating benefits and expenses for the periods indicated:
Year Ended December 31,
($ in millions)
Change
Total benefits and expenses
Less adjustments:
Changes in market risk benefits
Benefits and expenses related to businesses exited or to be exited through reinsurance or divestment
Expenses attributable to noncontrolling interests
Dividend payments made to preferred shareholders
Other adjustments
Total adjusted operating benefits and expenses
Adjusted operating benefits and expenses by segment:
Retirement
Investment Management
Employee Benefits
Corporate
Total adjusted operating benefits and expenses
Retirement
The following table presents Adjusted operating earnings before income taxes of our Retirement segment for the periods indicated:
Year Ended December 31,
($ in millions)
Adjusted operating revenues:
Net investment income and net gains (losses)
Fee income
Other revenue
Total adjusted operating revenues
Adjusted operating benefits and expenses:
Interest credited and other benefits to contract owners/policyholders
Operating expenses
Net amortization of DAC/VOBA
Total adjusted operating benefits and expenses
Adjusted operating earnings before income taxes
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The following table presents Net revenue and Adjusted operating margin for our Retirement segment as of the dates indicated:
Year Ended December 31,
($ in millions)
Adjusted operating earnings before income taxes
Total adjusted operating revenues
Less: Interest credited and other benefits to contract owners/policyholders
Net revenue
Adjusted operating margin (1)
(1) Adjusted operating earnings before income taxes divided by Net revenue.
The following tables present Total Client Assets by product group, which comprise total AUM and AUA, for our Retirement segment as of the dates indicated:
As of December 31,
($ in millions)
Full Service
Recordkeeping
Total Defined Contribution
Investment-only Stable Value
Retail Client and Other Assets (1)
Eliminations (2)
Total Client Assets by product group
(1) Other assets includes other guaranteed payout products and non-qualified retirement plans.
(2) Includes eliminations for certain client assets included in Recordkeeping, Retail, and Investment-only Stable Value to better reflect the asset bases generating revenue.
The following table presents Total Client Assets by source of earnings, which comprise total AUM and AUA, for our Retirement segment as of the dates indicated:
As of December 31,
($ in millions)
Fee-based
Spread-based (1)
Investment-only Stable Value
Retail Client Assets (2)
Eliminations
Total Client Assets by source of earnings
(1) Spread-based client assets includes a portion of Full Service, as well as proprietary IRA mutual fund products and other guaranteed payout products.
(2) Includes proprietary IRA mutual fund product sold as a manufacturer and a broker dealer distributor. The portion sold through the distributor is eliminated from Total Client Assets.
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The following table presents Full Service, Recordkeeping, and Stable Value net flows for our Retirement segment for the periods indicated:
As of December 31,
($ in millions)
Deposits
Surrenders, benefits and product charges
Total Full Service Net flows
Recordkeeping Net Flows
Total Defined Contribution Net Flows (1)
Investment-only Stable Value Net Flows
(1) Total of Full Service and Recordkeeping.
Retirement - Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Adjusted operating earnings before income taxes increased $139 million from $820 million to $959 million primarily due to:
• revenue growth reflecting onboarded OneAmerica assets and favorable market impacts;
• improved alternative investment income and active portfolio management;
• strong defined contribution net flows; and
• disciplined management of spend.
The increase was partially offset by:
• higher expenses reflecting the onboarded business and VOBA asset amortization from the OneAmerica transaction and overall business growth.
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Investment Management
The following table presents Adjusted operating earnings before income taxes of our Investment Management segment for the periods indicated:
Year Ended December 31,
($ in millions)
Adjusted operating revenues:
Net investment income and net gains (losses)
Fee income
Other revenue
Total adjusted operating revenues
Adjusted operating benefits and expenses:
Operating expenses
Total adjusted operating benefits and expenses
Adjusted operating earnings before income taxes including noncontrolling interest
Less: Earnings (loss) attributable to the noncontrolling interest (1)
Adjusted operating earnings before income taxes
(1) Reflects Allianz's 24% ownership stake in the results of VIM Holdings LLC.
The following table presents Net revenue and Adjusted operating margin for our Investment Management segment for the dates indicated:
Year Ended December 31,
($ in millions)
Adjusted operating earnings before income taxes including noncontrolling interest
Total adjusted operating revenues
Net revenue
Adjusted operating margin (1)
(1) Adjusted operating earnings before income taxes divided by Net revenue.
Our Investment Management segment revenues include the following intersegment revenues, primarily consisting of asset-based management and administration fees.
Year Ended December 31,
($ in millions)
Investment Management intersegment revenues
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The following table presents AUM and AUA for our Investment Management segment as of the dates indicated:
As of December 31,
($ in millions)
External clients:
Institutional (1)
Retail (2)
Total external clients
General account
Total AUM
AUA (2)
Total AUM and AUA (3)
(1) Includes assets associated with divested businesses.
(2) For the year ended December 31, 2025, approximately $11 billion of separately managed account AUM was reclassified as AUA. This reclassification had an immaterial impact on revenue.
(3) Includes assets sourced by other segments and also reported as AUA or AUM by such other segments. Assets Under Advisement, presented in AUA, includes advisory assets, mutual fund, general account and stable value assets.
The following table presents net flows for our Investment Management segment for the periods indicated:
Year Ended December 31,
($ in millions)
Net Flows:
Institutional
Retail (1)
Net Flows excluding Net Flows from Divested Businesses
Divested businesses
Total
(1) Includes reinvested dividends.
Investment Management - Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Adjusted operating earnings before income taxes including noncontrolling interest increased $13 million from $278 million to $291 million primarily due to:
• higher fee-based revenues benefiting from strong commercial momentum and favorable market impacts;
• improved investment capital returns primarily driven by overall market performance; and
• disciplined management of spend.
The increase was partially offset by:
• higher operating expenses driven by business growth.
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Employee Benefits
The following table presents Adjusted operating earnings before income taxes of the Employee Benefits segment for the periods indicated:
Year Ended December 31,
($ in millions)
Net investment income and net gains (losses)
Fee income
Premiums
Other revenue
Total adjusted operating revenues
Adjusted operating benefits and expenses:
Interest credited and other benefits to contract owners/policyholders
Operating expenses
Net amortization of DAC/VOBA
Total adjusted operating benefits and expenses
Adjusted operating earnings before income taxes (1)
(1) The years ended December 31, 2025 and 2024 include immaterial impacts related to the annual review of assumptions. See Critical Accounting Judgments and Estimates in Part II, Item 7. of this Annual Report on Form 10-K for further information.
The following table presents Net revenue and Adjusted operating margin for our Employee Benefits segment as of the dates indicated:
Year Ended December 31,
($ in millions)
Adjusted operating earnings before income taxes
Total adjusted operating revenues
Less: Interest credited and other benefits to contract owners/policyholders
Net revenue
Adjusted operating margin (1)
(1) Adjusted operating earnings before income taxes divided by Net revenue.
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The following table presents sales, gross premiums and in-force for our Employee Benefits segment for the periods indicated:
Year Ended December 31,
($ in millions)
Sales by Product Line:
Group life and Disability
Stop loss
Total group products
Voluntary and Other (1)
Total sales by product line
Total gross premiums and deposits
Group life and Disability
Stop loss
Voluntary and Other (1)
Total annualized in-force premiums and fees
Loss Ratios: (2)
Group life (interest adjusted)
Stop loss
Total Aggregate Loss Ratio
(1) Includes benefit administration annual recurring revenue and Health Account Solutions products.
(2) Reported Loss ratios are net of reinsurance recoveries.
Employee Benefits - Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Adjusted operating earnings before income taxes increased $112 million from $40 million to $152 million primarily due to:
• favorable Stop Loss claim developments in the current year compared to the prior year;
• disciplined management of spend; and
• higher alternative investment income and active portfolio management.
The increase was partially offset by:
• lower premiums driven by actions to improve the Stop Loss business;
• increased Voluntary claims in the current period; and
• investments in the business.
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Corporate
The following table presents Adjusted operating earnings (loss) before income taxes of Corporate for the periods indicated:
Year Ended December 31,
($ in millions)
Adjusted operating revenues:
Net investment income and net gains (losses)
Other revenue
Total adjusted operating revenues
Adjusted operating benefits and expenses:
Operating expenses (1)
Interest expense (2)
Total adjusted operating benefits and expenses
Adjusted operating earnings (loss) before income taxes including noncontrolling interest
Less: Earnings (loss) attributable to noncontrolling interest (3)
Adjusted operating earnings (loss) before income taxes
(1) Includes expenses from corporate activities and expenses not allocated to our segments.
(2) Includes dividend payments made to preferred shareholders.
(3) Reflects Allianz's 24% ownership stake in the results of VIM Holdings LLC.
Corporate - Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Adjusted operating earnings (loss) before income taxes including noncontrolling interest worsened $100 million from a loss of $205 million to a loss of $305 million primarily due to:
• increased performance-based compensation accruals in the current period due to strong business outcomes;
• higher expenses not directly related to the segments; and
• higher pension expenses.
Alternative Investment Income
Investment income on certain alternative investments can be volatile due to changes in market conditions. The following table presents the amount of investment income on certain alternative investments that is included in segment Adjusted operating earnings before income taxes and the average level of assets in each segment, prior to intercompany eliminations. This excludes alternative investments and income that are a component of Income (loss) related to businesses exited or to be exited through reinsurance or divestment. These alternative investments are carried at fair value, which is estimated based on the NAV of these funds. While investment income on these assets can be volatile, based on current plans, we expect to earn 9% on these assets over the long-term.
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The following table presents the alternative investment income and the average assets of alternative investments as of the dates indicated:
Year Ended December 31,
($ in millions)
Retirement:
Alternative investment income
Average alternative investments
Investment Management:
Alternative investment income
Average alternative investments
Employee Benefits:
Alternative investment income
Average alternative investments
Liquidity and Capital Resources
Liquidity refers to our ability to access sufficient sources of cash to meet the requirements of our operating, investing and financing activities. Capital refers to our long-term financial resources available to support business operations and future growth. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of the businesses, timing of cash flows on investments and products, general economic conditions and access to the capital markets and the other sources of liquidity and capital described herein.
The following presents a review of our sources and uses of liquidity and capital and should be read in its entirety and in conjunction with the Off-Balance Sheet Arrangements and Aggregate Contractual Obligations table included further below.
Consolidated Sources and Uses of Liquidity and Capital
Our principal available sources of liquidity are product charges, investment income, proceeds from the maturity and sale of investments, proceeds from debt issuance and borrowing facilities, equity securities issuance, repurchase agreements, contract deposits and securities lending. Primary uses of these funds are payments of policyholder benefits, commissions and operating expenses, interest credits, dividends, debt maturities and redemptions, share repurchases, investment purchases, business acquisitions and contract maturities, withdrawals and surrenders.
Parent Company Sources and Uses of Liquidity
Voya Financial, Inc. is largely dependent on cash flows from its operating subsidiaries to meet its obligations. The principal sources of funds available to Voya Financial, Inc. include dividends and returns of capital from its operating subsidiaries, as well as cash and short-term investments, and proceeds from debt issuances, borrowing facilities and equity securities issuances.
These sources of funds include the $500 million revolving credit sublimit of our senior unsecured credit facility and reciprocal borrowing facilities maintained with Voya Financial, Inc.'s subsidiaries as well as alternate sources of liquidity described below.
We estimate that our excess capital (which we define as the amount of total adjusted capital in our insurance subsidiaries above our 375% RBC target, plus the amount of holding company liquidity above our $200 million target) as of December 31, 2025 was approximately $0.4 billion. Excess capital is adjusted for certain intercompany loans and transactions.
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Voya Financial, Inc.'s primary sources and uses of cash for the periods indicated are presented in the following table:
Year Ended December 31,
($ in millions)
Beginning cash and cash equivalents balance
Sources:
Dividends and returns of capital from subsidiaries
Loans from subsidiaries, net of repayments
Repayments, net of loans to subsidiaries
Debt issuance
Amounts received from subsidiaries under tax sharing agreements, net
Collateral received, net
Settlement of amounts due from subsidiaries and affiliates, net
Asset maturities and investment income, net
Derivatives, net
Other, net
Total sources
Uses:
Payment of interest expense
Capital provided to subsidiaries
Payment for business acquisitions
Loans to subsidiaries, net of repayments
Repayments, net of loans from subsidiaries
Payment of income taxes, net
Common stock acquired - share repurchase
Share-based compensation
Dividends paid on preferred stock
Dividends paid on common stock
Acquisition of short-term investments, net
Debt maturity (1)
Collateral delivered, net
Asset purchases and investment expense, net
Total uses
Net increase (decrease) in cash and cash equivalents
Ending cash and cash equivalents balance
Liquid short-term investments (2)
Ending cash, cash equivalents and liquid short-term investments (3)
(1) See Pre-capitalized Trust Securities below for further detail.
(2) Short-term investments have maturities of one year or less, but greater than three months, are liquid and primarily consist of commercial paper investments rated BBB+ or greater.
(3) Short-term investments also include receivables for securities sold.
Liquidity
We manage liquidity through access to substantial investment portfolios as well as a variety of other sources of liquidity including committed credit facilities, securities lending and repurchase agreements. Our asset-liability management ("ALM") process considers the expected maturity of investments and expected benefit payments as well as the specific nature and risk
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profile of the liabilities. As part of our liquidity management process, we model different scenarios to determine whether existing assets are adequate to meet projected cash flows.
Capitalization
The primary components of our capital structure consist of debt and equity securities. Our capital position is supported by cash flows within our operating subsidiaries, the availability of borrowed funds under liquidity facilities, and any additional capital we raise to invest in the growth of the business and for general corporate purposes. We manage our capital position based on a variety of factors including, but not limited to, our financial strength, the credit rating of Voya Financial, Inc. and of its insurance company subsidiaries and general macroeconomic conditions. We may repurchase or otherwise retire our debt and preferred stock and take other steps to reduce our debt and preferred stock or otherwise improve our financial position. These actions could include open market repurchases, negotiated repurchases, tender offers or other retirements of outstanding debt and opportunistic refinancing of debt. The amount that may be repurchased or otherwise retired, if any, will depend on market conditions, trading levels, cash position, compliance with covenants and other considerations.
See the Consolidated and Nonconsolidated Investment Entities Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for details regarding changes in noncontrolling interest during the year and their impact on capitalization.
Share Repurchase Program and Dividends to Common Shareholders
See the Shareholders' Equity Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information relating to authorizations by the Board of Directors to repurchase our shares and amounts of common stock repurchased pursuant to such authorizations for the years ended December 31, 2025 and 2024 . As of December 31, 2025, our remaining repurchase capacity under the Board's authorization was $562 million.
The following table provides a summary of common dividends and repurchases of common shares for the periods indicated:
($ in millions)
Year Ended December 31,
Dividends paid on common shares
Repurchases of common shares (at cost)
Total
Subsequent to December 31, 2025, we repurchased approximately 1.2 million shares pursuant to 10b5-1 plans for an aggregate purchase price of $92 million.
Preferred Stock
Our ability to declare or pay dividends on, or purchase, redeem or otherwise acquire, shares of our common stock will be substantially restricted in the event that we do not declare and pay (or set aside) dividends on the Series A and Series B preferred stock for the last preceding dividend period.
During the years ended December 31, 2025 and 2024, we declared and paid dividends of $25 million and $16 million on the Series A and Series B preferred stock, respectively. As of December 31, 2025, there were no preferred stock dividends in arrears. See the Shareholders' Equity Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information on preferred stock issuances.
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Debt
As of December 31, 2025, we had $586 million of short-term debt borrowings outstanding consisting entirely of the current portion of long-term debt. The following table summarizes our borrowing activities for the year ended December 31, 2025:
($ in millions)
Beginning Balance
Issuance
Maturities and Repayment
Other Changes (1)
Ending Balance
Total long-term debt
(1) Other changes represent the reclassification of $586 million of debt maturing in 2026 from long-term to short-term debt, partially offset by the immaterial impact of discount accretion and issuance costs.
As of December 31, 2024, we had $399 million of short-term debt borrowings outstanding consisting entirely of the current portion of long-term debt. The following table summarizes our borrowing activities for the year ended December 31, 2024:
($ in millions)
Beginning Balance
Issuance
Maturities and Repayment
Other Changes (1)
Ending Balance
Total long-term debt
(1) Other changes represent the reclassification of $399 million of debt maturing in 2025, partially offset by the immaterial net impact of discount accretion and issuance costs.
See the Financing Agreements Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for additional details regarding changes in debt during the year and their impact on capitalization.
Pre-capitalized Trust Securities
See the Financing Agreements Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information on the put option and 3.976% Senior Notes, due 2025. We repaid the $400 million outstanding principal amount of our 3.976% Senior Notes upon maturity on February 14, 2025. The put option agreement expired on February 15, 2025.
On May 21, 2025, we entered into a 10-year Facility Agreement with a Delaware trust (the "Trust") following the completion of a private placement of Trust securities for $600 million of P-Caps, conducted pursuant to Rule 144A under the Securities Act. The Trust invested the proceeds from this offering in a portfolio of U.S. Treasury principal and interest strips ("Treasury securities").
Under the Facility Agreement, we have the right, on one or more occasions, to issue and sell up to $600 million of its 6.012% Senior Notes to the Trust in exchange for a corresponding amount of Treasury securities held by the Trust. In consideration for this right, we pay the Trust a semi-annual facility fee at a rate of 1.5175% per annum on the unexercised portion of the facility. These fees are recorded in Operating expenses in the Consolidated Statements of Operations. We also reimburse the Trust for its administrative expenses.
We may redeem the notes before maturity at par or, if higher, at a make-whole redemption price, plus accrued and unpaid interest. The P-Caps will be redeemed by the Trust on May 15, 2035, or earlier upon redemption of the 6.012% Senior Notes.
Credit Facilities
See the Financing Agreements Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information on credit facilities.
Voya Financial, Inc. Credit Support of Subsidiaries
Voya Financial, Inc. provides guarantees to certain of our subsidiaries to support various business requirements:
• Voya Financial, Inc. guarantees the obligations of Voya Holdings under the $13 million principal amount of the 8.42% Equitable of Iowa Companies Capital Trust II Notes due 2027, and provides a back-to-back guarantee to ING Group in respect of its guarantee of $218 million combined principal amount of Aetna Notes.
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• Voya Financial, Inc. and Voya Holdings provide a guarantee of payment of obligations to certain subsidiaries under certain surplus notes held by those subsidiaries.
As of December 31, 2025, we had neither recognized any asset or liability nor been required to perform under any intercompany indemnification or guarantee agreement.
Securities Lending Program
See the Business, Basis of Presentation and Significant Accounting Policies and Investments (excluding Consolidated Investment Entities) Notes to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information on our securities lending program.
FHLB
We are currently a member of the FHLB of Boston and the FHLB of Des Moines and may engage in transactions with FHLB for investment income enhancement and/or liquidity purposes. We are required to maintain a collateral deposit to back any funding agreements issued by the FHLB. We have the ability to obtain funding from the FHLBs, in the form of non-putable funding agreements, based on a percentage of the value of our assets and subject to the availability of eligible collateral. The types of securities generally pledged include mortgage securities, commercial real estate and U.S. treasury securities. Our borrowing capacity is also limited by the lending value of our assets pledged to the FHLB. As of December 31, 2025, our available borrowing capacity as per our pledged assets was approximately $2,189 million.
We had $1,700 million and $1,249 million in FHLB funding agreements as of December 31, 2025 and 2024, respectively, which are included in Contract owner account balances on the Consolidated Balance Sheets. As of December 31, 2025 and 2024, we had assets with a market value of approximately $2,467 million and $2,007 million, respectively, which collateralized the FHLB funding agreements.
FABN
We participate in a FABN program, pursuant to which we may issue funding agreements to a Delaware special purpose statutory trust (the "Trust"), in exchange for proceeds from the Trust’s medium-term note issuances. These notes are secured by the funding agreements.
The FABN program is intended to diversify our liability profile and provide an additional source of investment income enhancement. Compared to other general account liabilities, FABN has a different cash flow profile and is designed to support our funding strategy.
On November 24, 2025, we completed our inaugural issuance under the program, offering $400 million of Trust notes with a fixed interest rate of 4.6% per annum, maturing in November 2030.
Borrowings from Subsidiaries
We maintain revolving reciprocal loan agreements with a number of our life and non-life insurance subsidiaries that are used to fund short-term cash requirements that arise in the ordinary course of business. Under these agreements, either party may borrow up to the maximum allowable under the agreement for a term not more than 270 days. For life insurance subsidiaries, the amounts that either party may borrow under the agreement vary and are between 3% and 5% of the insurance subsidiary's statutory net admitted assets (excluding separate accounts) as of the previous year end depending on the state of domicile. As of December 31, 2025, the aggregate amount that may be borrowed or lent under agreements with life insurance subsidiaries was $1.4 billion. For non-life insurance subsidiaries, the maximum allowable under the agreement is based on the assets of the subsidiaries and their particular cash requirements. As of December 31, 2025, Voya Financial, Inc. had $608 million in outstanding borrowings from subsidiaries and had loaned $305 million to its subsidiaries.
Collateral - Derivative Contracts
See the Derivative Financial Instruments Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information on collateral for derivatives.
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Ratings
Our access to funding and our related cost of borrowing, collateral requirements for derivative instruments and the attractiveness of certain of our products to customers are affected by our credit ratings and insurance financial strength ratings, which are periodically reviewed by the rating agencies. Financial strength ratings and credit ratings are important factors affecting public confidence in an insurer and its competitive position in marketing products. Credit ratings are also important to our ability to raise capital through the issuance of debt and for the cost of such financing.
A downgrade in our credit ratings or the credit or financial strength ratings of our rated subsidiaries could have a material adverse effect on our results of operations and financial condition. See A downgrade or a potential downgrade in our financial strength or credit ratings may result in a loss of business and adversely affect our results of operations and financial condition in Risk Factors in Part I, Item 1A. of this Annual Report on Form 10-K.
Financial strength ratings represent the opinions of rating agencies regarding the financial ability of an insurance company to meet its obligations under an insurance policy. Credit ratings represent the opinions of rating agencies regarding an entity's ability to repay its indebtedness. These ratings are not a recommendation to buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the rating organization.
Rating agencies use an "outlook" statement for both industry sectors and individual companies. A stable outlook from rating agencies is an opinion generally indicating that the rating is not likely to change over the medium term.
The financial strength and credit ratings of Voya Financial, Inc. and its principal subsidiaries as of the date of this Annual Report on Form 10-K are summarized in the following table.
Rating Agency
A.M. Best
Fitch, Inc.
Moody's Investors Service, Inc.
Standard & Poor's
("A.M. Best") (1)
("Fitch") (2)
("Moody's") (3)
Long-term Issuer Credit Rating/Outlook:
Voya Financial, Inc.
A-/stable
Baa2/stable
BBB+/stable
Financial Strength Rating/Outlook:
Voya Retirement Insurance and Annuity Company
A+/stable
A2/stable
A+/stable
ReliaStar Life Insurance Company
A/stable
A+/stable
A2/stable
A+/stable
ReliaStar Life Insurance Company of New York
A/stable
A+/stable
A2/stable
A+/stable
(1) A.M. Best's financial strength ratings for insurance companies range from "A++ (superior)" to "s (suspended)." Long-term credit ratings range from "aaa
(exceptional)" to "s (suspended)."
(2) Fitch's financial strength ratings for insurance companies range from "AAA (exceptionally strong)" to "C (distressed)." Long-term credit ratings range from
"AAA (highest credit quality)," which denotes exceptionally strong capacity for timely payment of financial commitments, to "D (default)."
(3) Moody’s financial strength ratings for insurance companies range from "Aaa (exceptional)" to "C (lowest)." Numeric modifiers are used to refer to the
ranking within the group, with 1 being the highest and 3 being the lowest. These modifiers are used to indicate relative strength within a category. Long-term
credit ratings range from "Aaa (highest)" to "C (default)."
(4) S&P's financial strength ratings for insurance companies range from "AAA (extremely strong)" to "D (default)." Long-term credit ratings range from "AAA
(extremely strong)" to "D (default)."
(5) Effective April 11, 2019, A.M. Best withdrew, at the Company’s request, its financial strength ratings with respect to Voya Financial, Inc. and Voya
Retirement Insurance and Annuity Company.
In November 2025, A.M. Best maintained a stable outlook on the U.S. life insurance sector. Also, in December 2025, Moody’s confirmed its outlook for the U.S. life insurance sector as stable and Fitch confirmed its neutral outlook for the North American life insurance sector.
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Other Minimum Guarantees
Other variable annuity contracts contain minimum interest rate guarantees and allow the contract holder to select either the market value of the account or the book value of the account at termination. The book value of the account is equal to deposits plus interest, less any withdrawals. Under the terms of the contract, the book value settlement is paid out over time. These guarantees are offered in our stabilizer and managed custody guarantee products.
Reinsurance
We reinsure our business through a diversified group of well-capitalized, highly rated reinsurers. However, we remain liable to the extent our reinsurers do not meet their obligations under the reinsurance agreements. Collectability of reinsurance balances is evaluated by monitoring ratings and evaluating the financial strength of our reinsurers. Large reinsurance recoverable balances with offshore or other non-accredited reinsurers are secured through various forms of collateral, including secured trusts, funds withheld accounts and irrevocable LOCs. For additional information regarding our reinsurance recoverable balances, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. and the Reinsurance Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Pension and Postretirement Plans
When contributing to our qualified retirement plans, we will take into consideration the minimum and maximum amounts required by ERISA, the attained funding target percentage of the plan, the variable-rate premiums that may be required by the Pension Benefit Guaranty Corporation ("PBGC"), availability of and strategy for using funding balances and any funding relief that might be enacted by Congress. Contributions to our non-qualified plans and other postretirement and post-employment plans are funded from general assets of the respective sponsoring subsidiary company as benefits are paid.
For additional information on our pension and postretirement plan arrangements, see the Employee Benefit Arrangements Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Restrictions on Dividends and Returns of Capital from Subsidiaries
We depend on dividends and other distributions from our subsidiaries as the principal source of cash to meet our obligations. These subsidiaries include our principal subsidiaries listed in Our Organizational Structure in Part I, Item 1. of this Annual Report on Form 10-K as well as other direct and indirect subsidiaries. Our insurance companies are subject to limitations on the payment of dividends and other transfers of funds to Voya Financial, Inc. and other affiliates under applicable insurance laws and regulations. These restrictions are based in part on the prior year’s statutory income and surplus. Generally, dividends up to specified levels are considered ordinary and may be paid without prior regulatory approval. Otherwise, dividends are considered extraordinary, and are subject to approval by the insurance department of the respective state of domicile of the insurance subsidiary requesting the dividend.
For a summary of dividends permitted without approval, dividends paid, and extraordinary distributions paid and applicable laws and regulations governing dividends, see the Insurance Subsidiaries Dividend Restrictions section of the Insurance Subsidiaries Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Other Subsidiaries - Dividends, Returns of Capital, and Capital Contributions
We may receive dividends from or contribute capital to our wholly owned non-life insurance subsidiaries such as broker-dealers, investment management entities and intermediate holding companies. For the years ended December 31, 2025 and 2024, dividends, net of capital contributions, received by Voya Financial, Inc. and Voya Holdings from non-life subsidiaries were $106 million and $57 million, respectively.
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Statutory Capital and Risk-Based Capital of Principal Insurance Subsidiaries
Each of our Principal Insurance subsidiaries is subject to minimum risk-based capital (“RBC”) requirements based upon the laws of its state of domicile. The RBC formula for life insurance companies establishes capital requirements relating to asset, insurance, interest rate and business risks. RBC ratios, expressed as Total Adjusted Capital (“TAC”) to Company Action Level (“CAL”), may increase or decrease depending on a variety of factors including income or losses generated by the insurance subsidiary, additional capital held to support business objectives, market conditions, as well as changes to the NAIC RBC framework. State insurance regulators use the RBC requirements to identify inadequately capitalized insurers. Not meeting the minimum amount of capital based upon RBC requirements may subject the insurer to varying levels of regulatory oversight. As of December 31, 2025, the Total Adjusted Capital of each of our insurance subsidiaries exceeded statutory minimum RBC levels.
The following table summarizes the estimated ratio of TAC to CAL on a combined basis primarily for our Principal Insurance Subsidiaries adjusted for certain intercompany loans and transactions of $461 million and $383 million as of December 31, 2025 and 2024, respectively. The adjustment for December 31, 2024 included the anticipated payment of the 3.976% Senior Notes maturing February 15, 2025. See the Financing Agreements Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for additional details on the maturing debt.
($ in millions)
($ in millions)
As of December 31, 2025
As of December 31, 2024
CAL
TAC
Ratio
CAL
TAC
Ratio
For additional information regarding RBC, see Business-Regulation-Financial Regulation in Part I, Item 1. of this Annual Report on Form 10-K. For a summary of statutory capital and surplus of our Principal Insurance Subsidiaries, see the Insurance Subsidiaries Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
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Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
The following table presents our on- and off- balance sheet contractual obligations due in various periods as of December 31, 2025. The payments reflected in this table are based on our estimates and assumptions about these obligations, and consequently the actual cash outflows in future periods will vary, possibly materially, from those presented in the table.
Payments Due by Period
($ in millions)
Total
Less than
1 Year
1-3 Years
3-5 Years
More than
5 Years
Contractual Obligations
Purchase obligations (1)
Reserves for insurance obligations (2)(3)
Retirement and other plans (4)
Short-term and long-term debt obligations (5)
Operating leases (6)
Finance leases (7)
Securities lending, repurchase agreements and collateral held (8)
Other obligations (9)
Total (10)
(1) Purchase obligations consist primarily of outstanding commitments under mortgage loans, limited partnerships and private placement investments. These commitments may be funded any time within the terms of the underlying agreements. Because the timing of funding for these commitments cannot be reasonably estimated, the total amount of these commitments is presented in the "Less than 1 Year" category.
(2) Reserves for insurance obligations consist of amounts required to meet our future obligations for future policy benefits and contract owner account balances. Amounts presented in the table represent estimated cash payments under such contracts, including significant assumptions related to the receipt of future premiums, mortality, morbidity, lapse, renewal, retirement, disability and annuitization comparable with actual experience. These assumptions also include market growth and interest crediting assumptions. Estimated cash payments are undiscounted for the time value of money. Accordingly, the sum of cash flows presented of $58.8 billion significantly exceeds the sum of Future policy benefits and Contract owner account balances of $49.4 billion recorded on our Consolidated Balance Sheets as of December 31, 2025. Estimated cash payments are also presented gross of reinsurance. Due to the significance of the assumptions used, the amounts presented could materially differ from actual results.
(3) Contractual obligations related to certain closed blocks that were divested through reinsurance to third parties with reserves in the a mount of $0.9 billion, have been excluded from the table. Although we are not relieved of legal liability to the contract holder for these closed blocks, third-party collateral of $1.0 billion has been provided for the payment of the related insurance obligations. The sufficiency of collateral held for any individual block may vary.
(4) Includes estimated benefit payments under our qualified and non-qualified pension plans, estimated benefit payments under our other postretirement benefit plans, and estimated payments of deferred compensation based on participant elections and an average retirement age.
(5) The estimated payments due by period for long-term debt reflects the contractual maturities of principal, as well as estimated future interest payments. The payment of principal and estimated future interest for short-term debt are reflected in estimated payments due in less than one year. See the Financing Agreements Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for additional information concerning the short-term and long-term debt obligations.
(6) Operating lease obligations are associated with office space and equipment leases.
(7) Finance lease obligation is associated with office space leases.
(8) Securities lending agreements, repurchase agreements, and collateral held represent the liability to return collateral received from counterparties under securities lending agreements, OTC derivative and cleared derivative contracts as well as the obligations related to borrowings under repurchase agreements. Securities lending agreements include provisions which permit us to call back securities with minimal notice and accordingly, the payable is classified as having a term of less than 1 year. Additionally, securities lending agreements include off-balance sheet non-cash collateral of $36 million as of December 31, 2025.
(9) Other obligations consist of contingent consideration liability and liability on reinsurance.
(10) Unrecognized tax benefits are excluded from the table due to immateriality. See the Income Taxes Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for more information.
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Leverage Ratios
Our Leverage Ratios are a measure that we use to monitor the level of our debt relative to our total capitalization. The following table presents our leverage ratios for the periods indicated:
As of December 31,
($ in millions)
Financial Debt
Total financial debt
Other financial obligations (1)
Total financial obligations
Mezzanine equity
Redeemable noncontrolling interest
Equity
Preferred equity (2)
Common equity, excluding AOCI
Total equity, excluding AOCI
AOCI
Total Voya Financial, Inc. shareholders' equity
Noncontrolling interest
Total shareholders' equity
Capital
Capitalization (3)
Adjusted capitalization excluding AOCI (4)
Leverage Ratios
Debt-to-Capital (5)
Financial Leverage excluding AOCI (6)
(1) Includes operating leases, finance leases, and unfunded pension plan after-tax.
(2) Includes preferred stock par value and additional paid-in-capital.
(3) Includes Total Financial Debt and Total Voya Financial, Inc. Shareholders' Equity.
(4) Includes Total Financial Obligations, Mezzanine Equity and Total Shareholders' Equity excluding AOCI.
(5) Total Financial Debt divided by Capitalization.
(6) Total Financial Obligations and Preferred equity divided by Adjusted Capitalization excluding AOCI.
Our Financial Leverage Ratio, excluding AOCI, decreased from 30.3% at December 31, 2024 to 27.0% at December 31, 2025. This decrease was primarily due to the repayment of the $400 million outstanding principal amount of 3.976% Senior Notes due February 15, 2025.
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Critical Accounting Judgments and Estimates
General
The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical estimates and assumptions are evaluated on an on-going basis based on historical developments, market conditions, industry trends and other information that is reasonable under the circumstances. There can be no assurance that actual results will conform to estimates and assumptions and that reported results of operations will not be materially affected by the need to make future accounting adjustments to reflect changes in these estimates and assumptions from time to time. Those estimates are inherently subject to change and actual results could differ from those estimates, and the differences may be material to the accompanying Consolidated Financial Statements.
We have identified the following accounting judgments and estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability:
• Reserves for future policy benefits;
• Valuation of investments and derivatives;
• Investment impairments;
• Goodwill and other intangible assets;
• Income taxes;
• Contingencies; and
• Employee benefit plans.
In developing these accounting estimates, we make subjective and complex judgments that are inherently uncertain and subject to material changes as facts and circumstances develop. Although variability is inherent in these estimates, we believe the amounts provided are appropriate based on the facts available upon preparation of the Consolidated Financial Statements.
The above critical accounting estimates are described in the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Reserves for Future Policy Benefits
Reserves for traditional life insurance contracts (term insurance, participating and non-participating whole life insurance and traditional group life insurance) and accident and health insurance represent the present value of future benefits to be paid to or on behalf of contract owners and related expenses, less the present value of future net premiums.
Long-duration contracts are insurance contracts that provide insurance coverage and remain in force for an extended period. Principal assumptions used to establish the liability for future policy benefits for long-duration contracts include mortality, morbidity, policy lapse, contract renewal, payment of subsequent premiums by the contract owner, retirement, and benefit utilization. These assumptions are based on our experience and periodically reviewed against industry standards. The assumptions used require considerable judgments. Changes in, or deviations from, the assumptions used can significantly affect our reserve levels and related results of operations.
• Mortality is the incidence of death among policyholders triggering the payment of underlying insurance coverage by the insurer. In addition, mortality also refers to the ceasing of payments on life-contingent annuities due to the death of the annuitant. We utilize a combination of company and industry experience when setting our mortality assumptions.
• A lapse rate is the percentage of in-force policies surrendered by the policyholder or canceled by us due to nonpayment of premiums. A decrease in policy lapses would result in an increase in persistency rates.
The liability for Future policy benefits also includes claims reported but not yet paid and claims incurred but not yet reported. The liability for claims incurred but not yet reported is estimated using expected patterns of claims reporting.
In addition, liabilities for unpaid claims and claims adjustment expenses associated with short-duration contracts included within Future policy benefits involve the use of assumptions mainly related to claim development experience. These assumptions are reviewed at least quarterly, and adjustments resulting from these reviews are reflected in Policyholder benefits in the Consolidated Statements of Operations. Furthermore, significant changes in claims experience may result in expected future losses and establishment of premium deficiency reserves. Principal assumptions used in quarterly premium deficiency reserve analysis include loss ratios, expenses and investment margins.
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Assumptions and Periodic Review
We review assumptions for long-duration contracts at least annually against actual experience and, based on additional information that becomes available, update them if necessary. The annual review of assumptions is generally performed in the third quarter. Changes in, or deviations from, assumptions used can significantly affect our reserve levels and related results of operations. Assumptions are management's best estimates of future outcomes.
During the third quarter of 2025 and 2024, we completed our annual assumption updates, and determined the impacts were not material to our results of operations. The impact from assumption changes is generally reflected in Interest credited to contract owner account balances, Policyholder benefits or Net gains (losses) in the Consolidated Statements of Operations. Refer to R esults of Operations - Consolidated in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of this Annual Report on Form 10-K for more information.
Sensitivity
We perform a sensitivity analysis to assess the impact that certain assumptions have on traditional long duration reserves. During the third quarter of 2025, we performed a sensitivity analysis on increases in each of the future mortality, morbidity, and persistency assumptions by 1%, and determined that the related impact was immaterial to our results of operations. This analysis did not include the aggregate impacts that could result if a combination of such changes to equity markets, interest rates and other assumptions occurred. In the aggregate, increases in assumed future mortality, morbidity or persistency increase future policy benefits, thus decreasing income before income taxes.
Product Guarantees
The assumptions used to establish the liabilities for our product guarantees require considerable judgment and are established as management's best estimate of future outcomes. We periodically review these assumptions and, if necessary, update them based on additional information that becomes available. Changes in, or deviations from, the assumptions used can significantly affect our reserve levels and related results of operations.
Stabilizer and MCG : We also issue stabilizer ("Stabilizer") contracts that contain embedded derivatives that are measured at estimated fair value separately from the host contracts. The managed custody guarantee product ("MCG") is a stand-alone derivative and is measured in its entirety at estimated fair value.
The estimated fair value of the Stabilizer embedded derivative and MCG stand-alone derivative is determined based on the present value of projected future claims, minus the present value of future attributed premiums. At inception of the contract, we project an attributed premium to be equal to the present value of the projected future claims. The income associated with the contracts is projected using actuarial and capital market assumptions, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are projected under multiple capital market scenarios using observable risk-free rates and other best estimate assumptions. The liabilities for Stabilizer embedded derivatives and the MCG stand-alone derivative include a risk margin to capture uncertainties related to policyholder behavior assumptions. The margin represents additional compensation a market participant would require to assume these risks.
The discount rate used to determine the fair value of the liabilities for our Stabilizer embedded derivatives and the MCG stand-alone derivative includes an adjustment to reflect the risk that these obligations will not be fulfilled ("nonperformance risk"). Our nonperformance risk adjustment is based on a blend of observable, similarly rated peer holding company credit spreads, adjusted to reflect the credit quality of our individual insurance subsidiary that issued the guarantee, as well as an adjustment to reflect the non-default spreads and the priority and recovery rates of policyholder claims.
See the Reserves for Future Policy Benefits and Contract Owner Account Balances Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information on our reserves for future policy benefits and contract owner account balances. In addition, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K for additional information regarding specific hedging strategies we utilize to mitigate risk for the product guarantees, as well as sensitivities of the embedded derivative and stand-alone derivative liabilities to changes in certain capital markets assumptions.
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Valuation of Investments and Derivatives
Our investment portfolio includes certain investments recorded at fair value and consists of public and private fixed maturity securities, commercial mortgage and other loans, equity securities, short-term investments, other invested assets and derivative financial instruments. We enter into interest rate, equity market, credit default and currency contracts, including swaps, futures, forwards, caps, floors and options, to reduce and manage various risks associated with changes in value, yield, price, cash flow or exchange rates of assets or liabilities held or intended to be held, or to assume or reduce credit exposure associated with a referenced asset, index or pool. We also utilize options and futures on equity indices to reduce and manage risks associated with our universal-life type and annuity products.
See the Investments (excluding Consolidated Investment Entities) Note and the Derivative Financial Instruments Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information.
Investments
We measure the fair value of our financial assets and liabilities based on assumptions used by market participants in pricing the asset or liability, which may include inherent risk, restrictions on the sale or use of an asset, or nonperformance risk, including our own credit risk. The estimate of fair value is the price that would be received to sell an asset or paid to transfer a liability ("exit price") in an orderly transaction between market participants in the principal market, or the most advantageous market in the absence of a principal market, for that asset or liability. We use a number of valuation sources to determine the fair values of our financial assets and liabilities, including quoted market prices, third-party commercial pricing services, third-party brokers, industry-standard, vendor-provided software that models the value based on market observable inputs, and other internal modeling techniques based on projected cash flows.
We categorize our financial instruments into a three-level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.
When available, the estimated fair value of securities is based on quoted prices in active markets that are readily and regularly obtainable. When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies, including discounted cash flows, matrix pricing or other similar techniques. Inputs to these methodologies include, but are not limited to, market observable inputs such as benchmark yields, credit quality, issuer spreads, bids, offers and cash flow characteristics of the security. For privately placed bonds, we also consider such factors as the net worth of the borrower, value of the collateral, the capital structure of the borrower, the presence of guarantees, and the borrower's ability to compete in its relevant market. Valuations are reviewed and validated monthly by an internal valuation committee using price variance reports, comparisons to internal pricing models, back testing of recent trades, and monitoring of trading volumes, as appropriate.
The valuation of financial assets and liabilities involves considerable judgment, is subject to considerable variability, is established using management's best estimate, and is revised as additional information becomes available. As such, changes in, or deviations from, the assumptions used in such valuations can significantly affect our results of operations. Financial markets are subject to significant movements in valuation and liquidity, which can impact our ability to liquidate and the selling price that can be realized for our securities.
Derivatives
Derivatives are carried at fair value, which is determined using the Company's derivative accounting system in conjunction with observable key financial data from third-party sources, such as yield curves, exchange rates, S&P 500 Index prices, Overnight Index Swap ("OIS") rates, and Secured Overnight Financing Rates ("SOFR"). Valuations for our futures contracts are based on unadjusted quoted prices from an active exchange. Counterparty credit risk is considered and incorporated in our valuation process through counterparty credit rating requirements and monitoring of overall exposure. Our own credit risk is also considered and incorporated in our valuation process.
We have certain credit default swaps ("CDS") and options that are priced by third party vendors or by using models that primarily use market observable inputs, but contain inputs that are not observable to market participants.
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We also have investments in certain fixed maturities, and we have entered into coinsurance with funds withheld and modified coinsurance reinsurance arrangements that contain embedded derivatives. The fair value of the embedded derivatives is based on the change in the fair value of the underlying assets held in the trust using the valuation methods and assumptions described for our investments held.
The valuation of derivatives involves considerable judgment, is subject to considerable variability, is established using management's best estimate and is revised as additional information becomes available. As such, changes in, or deviations from, these assumptions used in such valuations can have a significant effect on the results of operations.
For additional information regarding the fair value of our investments and derivatives, see the Fair Value Measurements (excluding Consolidated Investment Entities) Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. For additional information regarding the sensitivities of interest rate risk and equity market price risk and impact on investments and derivatives, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K.
Investment Impairments
Fixed maturities, available-for-sale, and mortgage loans on real estate can be subject to credit impairment, which can have a significant effect on the results of operations. Refer to the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for an understanding of our methodology and significant inputs considered within the allowance for credit losses and impairments. For additional information regarding the evaluation process for credit impairments, refer to the Investments (excluding Consolidated Investment Entities) Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Goodwill and Other Intangible Assets
Goodwill and other intangible assets are established based on estimates of fair value as of the date of acquisition in a business combination. The valuation methodologies utilized in connection with testing goodwill and other intangible assets for impairment are subject to key judgments and assumptions that are sensitive to change. Goodwill and other intangible assets with indefinite lives are not amortized. Intangibles with finite lives are amortized over their estimated useful lives. We assess goodwill and other intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired.
Goodwill
Goodwill testing is performed at the reporting unit level and consists of qualitative or quantitative assessments. In the qualitative assessment, we consider relevant events and circumstances that could affect the significant inputs used to determine the fair value of the reporting unit. If, when reviewing the qualitative factors, it is determined it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is performed. The determination of fair value for our reporting units is primarily based on an income approach whereby we use discounted cash flows for each reporting unit. We apply significant judgment when determining the estimated fair value of our reporting units. The key inputs, judgments and assumptions necessary in determining estimated fair value of the reporting units include projected adjusted earnings, current book value, the level of economic capital required to support the mix of business, long-term growth rates, comparative market multiples, projections of new and renewed business, as well as margins on such business, interest rate levels, credit spreads, equity market levels, and the discount rate that we believe is appropriate for the respective reporting unit. As a result of the qualitative assessment performed during the fourth quarter, we determined that there are no indicators of impairment requiring a quantitative assessment to be performed.
Other Intangible Assets
Our indefinite-lived intangible assets primarily relate to the right to manage client assets. The approach to testing indefinite-lived intangibles is similar to the impairment testing approach applied to goodwill, except that the testing is performed with reference to the carrying amount and fair value of the intangible asset.
Finite-lived intangible assets include primarily management contract rights, customer relationship lists, and computer software, and are reviewed periodically for indicators of change in useful lives or impairment. If facts and circumstances suggest possible impairment, the sum of the estimated undiscounted future cash flows expected to result from the use of the asset is compared to
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the carrying value of the asset. If the carrying value of the asset exceeds the undiscounted cash flows, the asset is written down to its fair value determined using discounted cash flows. Significant estimates in the determination of fair value for this purpose include the projected net cash flow attributable to the intangible asset and the discount rate applied to future net cash flows for purposes of estimating fair value.
We had no impairment loss in relation to other intangible assets for the years ended December 31, 2025 and 2024. During 2023, we recognized an impairment loss of $33 in relation to management contract rights. See the Goodwill and Other Intangible Assets Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for additional details.
Income Taxes
Valuation Allowances
We use certain assumptions and estimates in determining the income taxes payable or refundable for the current year, the deferred tax liabilities and assets for items recognized differently in our Consolidated Financial Statements from amounts shown on our income tax returns, and the federal income tax expense. Determining these amounts requires analysis and interpretation of current tax laws and regulations, including the loss limitation rules associated with change in control. We exercise considerable judgment in evaluating the amount and timing of recognition of the resulting income tax liabilities and assets. These judgments are reevaluated on a quarterly basis and as regulatory and business factors change.
We had federal net operating losses of $5.2 billion as of December 31, 2025, which we expect to fully utilize in future years from the four available sources of taxable income. Additionally, we had overall unrealized capital losses of $1.7 billion in Accumulated other comprehensive income as of December 31, 2025, which we expect to be utilized by our hold-to-maturity tax planning strategy. Future decreases to taxable income, increases to interest rates and/or the occurrence of other unexpected circumstances, such as changes in the economic environment, liquidity and investment strategy, could result in recording a related valuation allowance on our deferred tax assets in a future period.
For additional understanding over the Company's valuation allowance, refer to the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
In December 2014, we entered into an Issue Resolution Agreement ("IA") with the IRS relating to the Internal Revenue Code Section 382 calculation of the annual limitation on the use of certain of the Company’s federal tax attributes that will apply as a consequence of the Section 382 event experienced by the Company in March 2014. We do not expect the annual limitation to impact our ability to utilize the losses or credits.
For further information on our income taxes, including information on the valuation allowance, see the Income Taxes Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Tax Contingencies
We recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained under examination by the applicable taxing authority. We also consider positions that have been reviewed and agreed to as part of an examination by the applicable taxing authority. For items that meet the more-likely-than-not recognition threshold, we measure the tax position as the largest amount of benefit that is more than 50% likely to be realized upon ultimate resolution with the applicable tax authority that has full knowledge of all relevant information. Tax positions that do not meet the more-likely-than-not standard are not recognized.
Changes in Law
Certain changes or future events, such as changes in tax legislation, geographic mix of earnings, completion of tax audits, planning opportunities and expectations about future outcomes could have an impact on our estimates of deferred taxes, valuation allowances, tax provisions and effective tax rates.
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In August 2022, the Inflation Reduction Act of 2022 was signed into law, which includes a 15% corporate alternative minimum tax ("CAMT"). The CAMT is effective in taxable years beginning after December 31, 2022. In September 2024, the Department of Treasury issued proposed regulations providing additional guidance on the CAMT. While we do not expect to be subject to the CAMT for 2025, we are continuing to review the proposed regulations, and our CAMT determination will need to be evaluated in light of future guidance.
In July 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, which includes changes to the Internal Revenue Code. The OBBBA did not have a material impact on our financial statements.
Contingencies
For information regarding our contingencies, see the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Employee Benefits Plans
We sponsor both qualified and non-qualified defined benefit pension plans (the "Plans") and other postretirement benefit plans covering eligible employees, sales representatives and other individuals. For accounting policies and more information related to our employee benefit plans, see the Employee Benefit Arrangements Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
The Voya Retirement Plan (the "Retirement Plan") is a tax qualified defined benefit plan, the benefits of which are guaranteed (within certain specified legal limits) by the Pension Benefit Guaranty Corporation ("PBGC"). Beginning January 1, 2012, the Retirement Plan adopted a cash balance pension formula instead of a final average pay ("FAP") formula, allowing all eligible employees to participate in the Retirement Plan. Participants earn an annual credit equal to 4% of eligible compensation. Interest is credited monthly based on a 30-year U.S. Treasury securities bond rate published by the IRS in the preceding August of each year. The annual pay and interest credits are subject to a 3-year cliff vesting schedule. The accrued vested cash pension balance benefit is portable; participants can take it if they leave us.
The table below summarizes the components of the net actuarial (gains) losses related to the Plans' pension obligations recognized within Operating expenses in our Consolidated Statements of Operations for the periods indicated:
Year Ended December 31,
(Gain)/Loss Recognized ($ in millions)
Discount Rate
Asset Returns
Demographic Data and other
Total Net Actuarial (Gain)/Loss Recognized
For the year ended December 31, 2025, we decreased our Plans' discount rate by 0.25% resulting in an increase in our benefit obligations and a corresponding actuarial loss of $44 million. This decrease in the discount rate was driven by a steepening of the corporate AA yield curve. For the year ended December 31, 2024, we increased our Plans' discount rate by 0.60% resulting in an decrease in our benefit obligations and a corresponding actuarial gain of $110 million. This increase in the discount rate was driven by the increase in corporate AA yields.
The asset returns are only applicable to the Retirement Plan as assets are not held by any of the other pension and other postretirement plans. Our expected long-term rate of return on our Retirement Plan assets was 6.00% for 2025 and 2024. Our expected return on Retirement Plan assets is calculated using 30-year forward looking assumptions based on the long-term target asset allocation. In 2025, the actual return on our Retirement Plan assets was approximately 8.60%, resulting in an actuarial gain of $43 million, mainly due to high proportion of fixed income investments. In 2024, the actual return on our Retirement Plan assets was approximately 2.27%, resulting in an actuarial loss of $71 million.
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Sensitivity
The discount rate and expected rate of return assumptions relating to our defined benefit pension plans have historically had the most significant effect on our net periodic benefit costs and the projected and accumulated projected benefit obligations associated with these plans.
The discount rate is based on current market information provided by plan actuaries. The discount rate modeling process involves selecting a portfolio of high quality, non-callable bonds that will match the cash flows of the defined benefit pension plans. The weighted average discount rate in 2025 for the net periodic benefit cost was 5.88% for the Plans. The discount rate as of December 31, 2025 for the benefit obligation of the Plans was 5.63%.
As of December 31, 2025, the sensitivities of the effect of a change in the discount rate are as presented below. This represents the estimate of actuarial gains (losses) that would be recognized immediately through Operating expenses in our Consolidated Statements of Operations:
($ in millions)
Increase (Decrease) in
Net Periodic Benefit
Cost-Pension Plans
Increase in discount rate by 100 basis points
Decrease in discount rate by 100 basis points
($ in millions)
Increase (Decrease) in
Pension Benefit Obligation
Increase in discount rate by 100 basis points
Decrease in discount rate by 100 basis points
The discount rate to be used to determine interest cost for 2026 is 5.63%. The estimated impact of this change, as well as actuarial loss on discount rate experienced during 2025, is expected to have an immaterial impact on our net periodic pension cost.
The expected rate of return considers the asset allocation, historical returns on the types of assets held and current economic environment. Based on these factors, we expect that the assets will earn an average percentage per year over the long term. This estimation is based on an active return on a compound basis, with a reduction for administrative expenses and manager fees paid to non-affiliated companies from the assets. For estimation purposes, we assume the long-term asset mix will be consistent with the current mix. Changes in the asset mix could impact the amount of recorded pension income or expense, the funded status of the Retirement Plan and the need for future cash contributions. The expected rate of return for 2025 was 6.00%, net of expenses, for the Retirement Plan.
As of December 31, 2025, the effect of a change in the actual rate of return on the net periodic benefit cost is presented in the table below. This represents the estimate of actuarial gains (losses) that would be recognized immediately through Operating expenses in our Consolidated Statements of Operations:
($ in millions)
Increase (Decrease) in Net Periodic Benefit Cost-Pension Plans
Increase in actual rate of return by 100 basis points
Decrease in actual rate of return by 100 basis points
The expected rate of return for 2026 is 6.10%, net of expenses, for the Retirement Plan.
Impact of New Accounting Pronouncements
For information regarding the impact of new accounting pronouncements, see the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Investments (excluding Consolidated Investment Entities)
Investments for our general account are primarily managed by our wholly owned asset manager, Voya Investment Management LLC, pursuant to investment advisory agreements with affiliates. In addition, our internal treasury group manages our holding company liquidity investments, primarily money market funds.
Investment Strategy
Our investment strategy seeks to achieve sustainable risk-adjusted returns by focusing on principal preservation, disciplined matching of asset characteristics with liability requirements and the diversification of risks. Investment activities are undertaken according to investment policy statements that contain internally established guidelines and risk tolerances and are required to comply with applicable laws and insurance regulations. Risk tolerances are established for credit risk, credit spread risk, market risk, liquidity risk and concentration risk across issuers, sectors and asset types that seek to mitigate the impact of cash flow variability arising from these risks.
Segmented portfolios are established for groups of products with similar liability characteristics. Our investment portfolio consists largely of high quality fixed maturities and short-term investments, investments in commercial mortgage loans, alternative investments and other instruments, including a small amount of equity holdings. Fixed maturities include publicly issued corporate bonds, government bonds, privately placed notes and bonds, bonds issued by states and municipalities, ABS, traditional MBS and various collateralized mortgage obligation ("CMO") tranches managed in combination with financial derivatives as part of a proprietary strategy known as CMO-B.
We use derivatives for hedging purposes to reduce our exposure to the cash flow variability of assets and liabilities, interest rate risk, credit risk and market risk. In addition, we use credit derivatives to replicate exposure to individual securities or pools of securities as a means of achieving credit exposure similar to bonds of the underlying issuer(s) more efficiently.
See the Investments (excluding Consolidated Investment Entities) Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for more information on investments. Additionally, see the Consolidated Balance Sheets to our Consolidated Financial Statements Part II, Item 8. of this Annual Report on Form 10-K for a composition of our investment portfolio.
Fixed Maturities Credit Quality - Ratings
The Securities Valuation Office ("SVO") of the NAIC evaluates the fixed maturity security investments of insurers for regulatory reporting and capital assessment purposes and assigns securities to one of six credit quality categories called "NAIC designations." An internally developed rating is used as permitted by the NAIC if no rating is available. These designations are generally similar to the credit quality designations of the NAIC acceptable rating organizations ("ARO") for marketable fixed maturity securities, called rating agency designations except for certain structured securities as described below. NAIC designations of "1," highest quality and "2," high quality, include fixed maturity securities generally considered investment grade by such rating organizations. NAIC designations 3 through 6 include fixed maturity securities generally considered below investment grade by such rating organizations.
The NAIC designations for structured securities, including subprime and Alt-A RMBS, are based upon a comparison of the bond's amortized cost to the NAIC's loss expectation for each security. Securities where modeling results in no expected loss in each scenario are considered to have the highest designation of NAIC 1. A large percentage of our RMBS securities carry the NAIC 1 designation while the ARO rating indicates below investment grade. This is primarily due to the credit and intent impairments recorded by us that reduced the amortized cost on these securities to a level resulting in no expected loss in any scenario, which corresponds to the NAIC 1 designation. The methodology reduces regulatory reliance on rating agencies and allows for greater regulatory input into the assumptions used to estimate expected losses from such structured securities. In the tables below, we present the rating of structured securities based on ratings from the NAIC methodologies described above (which may not correspond to rating agency designations). NAIC designations (e.g., NAIC 1-6) are based on the NAIC methodologies.
As a result of time lags between the funding of investments, the finalization of legal documents and the completion of the SVO filing process, the fixed maturity portfolio generally includes securities, that have not yet been rated by the SVO as of each balance sheet date, such as private placements. Pending receipt of SVO ratings, the categorization of these securities by NAIC designation is based on the expected ratings indicated by internal analysis.
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Information about certain of our fixed maturity securities holdings by the NAIC designation is set forth in the following tables. Corresponding rating agency designation does not directly translate into NAIC designation, but represents our best estimate of comparable ratings from rating agencies, including Moody's, S&P and Fitch. If no rating is available from a rating agency, then an internally developed rating is used. As of December 31, 2025 and 2024, the weighted average NAIC quality rating of our fixed maturities portfolio was 1.5.
The following tables present credit quality of fixed maturities, including securities pledged, using NAIC designations as of the dates indicated:
($ in millions)
December 31, 2025
NAIC Quality Designation
Total Fair Value
U.S. Treasuries
U.S. Government agencies and authorities
State, municipalities and political subdivisions
U.S. corporate public securities
U.S. corporate private securities
Foreign corporate public securities and foreign governments (1)
Foreign corporate private securities (1)
Residential mortgage-backed securities
Commercial mortgage-backed securities
Other asset-backed securities
Total fixed maturities
% of Fair Value
(1) Primarily U.S. dollar denominated.
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($ in millions)
December 31, 2024
NAIC Quality Designation
Total Fair Value
U.S. Treasuries
U.S. Government agencies and authorities
State, municipalities and political subdivisions
U.S. corporate public securities
U.S. corporate private securities
Foreign corporate public securities and foreign governments (1)
Foreign corporate private securities (1)
Residential mortgage-backed securities
Commercial mortgage-backed securities
Other asset-backed securities
Total fixed maturities
% of Fair Value
(1) Primarily U.S. dollar denominated.
The fixed maturities in our portfolio are generally rated by external rating agencies and, if not externally rated, are rated by us on a basis similar to that used by the rating agencies. As of December 31, 2025 and 2024, the weighted average quality rating of our fixed maturities portfolio was A. Ratings are derived from three ARO ratings and are applied as follows, based on the number of agency ratings received:
• when three ratings are received then the middle rating is applied;
• when two ratings are received then the lower rating is applied;
• when a single rating is received, the ARO rating is applied; and
• when ratings are unavailable then an internal rating is applied.
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The following tables present credit quality of fixed maturities, including securities pledged, using ARO ratings as of the dates indicated:
($ in millions)
December 31, 2025
ARO Quality Ratings
AAA
BBB
BB and Below
Total Fair Value
U.S. Treasuries
U.S. Government agencies and authorities
State, municipalities and political subdivisions
U.S. corporate public securities
U.S. corporate private securities
Foreign corporate public securities and foreign governments (1)
Foreign corporate private securities (1)
Residential mortgage-backed securities
Commercial mortgage-backed securities
Other asset-backed securities
Total fixed maturities
% of Fair Value
(1) Primarily U.S. dollar denominated.
($ in millions)
December 31, 2024
ARO Quality Ratings
AAA
BBB
BB and Below
Total Fair Value
U.S. Treasuries
U.S. Government agencies and authorities
State, municipalities and political subdivisions
U.S. corporate public securities
U.S. corporate private securities
Foreign corporate public securities and foreign governments (1)
Foreign corporate private securities (1)
Residential mortgage-backed securities
Commercial mortgage-backed securities
Other asset-backed securities
Total fixed maturities
% of Fair Value
(1) Primarily U.S. dollar denominated.
Fixed maturities rated BB and below may have speculative characteristics and changes in economic conditions or other circumstances that are more likely to lead to a weakened capacity of the issuer to make principal and interest payments than is the case with higher rated fixed maturities.
As of December 31, 2025 and 2024, we held fixed maturities rated BBB of $12.5 billion and $11.7 billion, respectively. Our higher allocation to BBB relative to industry peers is a function of our underweight to high yield debt and preference for private credit, which is primarily a BBB market. Private credit within the BBB space provides issuer diversification, offers a higher overall return profile and includes stronger credit protections that come with better covenant structures.
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Unrealized Capital Losse s
As of December 31, 2025 and 2024, we held three and nine fixed maturities with unrealized capital loss in excess of $10 million, respectively. As of December 31, 2025 and 2024, the unrealized capital losses on these fixed maturities were $34 million or 1.6% and $114 million or 4.0% of the total unrealized losses, respectively.
See the Investments (excluding Consolidated Investment Entities) Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information on unrealized capital losses.
CMO-B Portfolio
As part of our broadly diversified investment portfolio, we have a core holding in a proprietary mortgage derivatives strategy known as CMO-B, which invests in a variety of CMO securities in combination with interest rate derivatives in targeting a specific type of exposure to the U.S. residential mortgage market. Because of their relative complexity and generally small natural buyer base, we believe certain types of CMO securities are consistently priced below their intrinsic value, thereby providing a source of potential return for investors in this strategy.
The CMO securities that are part of our CMO-B portfolio are either notional or principal securities, backed by the interest and principal components, respectively, of mortgages secured by single-family residential real estate. There are many variations of these two types of securities including interest only and principal only securities, as well as inverse-floating rate (principal) securities and inverse interest only securities, all of which are part of our CMO-B portfolio. This strategy has been in place for nearly two decades and thus far has been a significant source of investment income while exhibiting relatively low volatility and correlation compared to the other asset types in the investment portfolio, although we cannot predict whether favorable returns will continue in future periods.
To protect against the potential for credit loss associated with financially troubled borrowers, investments in our CMO-B portfolio are primarily in CMO securities backed by one of the government sponsored entities: the Federal National Mortgage Association ("Fannie Mae"), the Federal Home Loan Mortgage Corporation ("Freddie Mac") or Government National Mortgage Association ("Ginnie Mae").
Because the timing of the receipt of the underlying cash flow is highly dependent on the level and direction of interest rates, our CMO-B portfolio also has exposure to both interest rate and convexity risk. The exposure to interest rate risk—the potential for changes in value that results from changes in the general level of interest rates—is managed to a defined target duration using interest rate swaps and interest rate futures. The exposure to convexity risk—the potential for changes in value that result from changes in duration caused by changes in interest rates—is dynamically hedged using interest rate swaps and at times, interest rate swaptions.
Prepayment risk represents the potential for adverse changes in portfolio value resulting from changes in residential mortgage prepayment speed (actual and projected), which in turn depends on a number of factors, including conditions in both credit markets and housing markets. Changes in the prepayment behavior of homeowners represent both a risk and potential source of return for our CMO-B portfolio. As a result, we seek to invest in securities that are broadly diversified by collateral type to take advantage of the uncorrelated prepayment experiences of homeowners with unique characteristics that influence their ability or desire to prepay their mortgage. We choose collateral types and individual securities based on an in-depth quantitative analysis of prepayment incentives across available borrower types.
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The following table presents fixed maturities balances held in the CMO-B portfolio by NAIC quality rating as of the dates indicated:
($ in millions)
December 31, 2025
December 31, 2024
NAIC Quality Designation
Amortized Cost
Fair Value
% Fair Value
Amortized Cost
Fair Value
% Fair Value
Total
For CMO securities where we elected the fair value option ("FVO"), amortized cost represents the market values. For details on the NAIC designation methodology, see Fixed Maturities Credit Quality - Ratings above.
The following table presents the notional amounts and fair values of interest rate derivatives not qualifying for hedge accounting and used in our CMO-B portfolio as of the dates indicated:
December 31, 2025
December 31, 2024
($ in millions)
Notional
Amount
Asset Fair Value
Liability Fair Value
Notional
Amount
Asset Fair Value
Liability Fair Value
Interest Rate Contracts
The Company utilizes interest rate futures and interest rate swaps as a part of the CMO-B portfolio to hedge interest rate risk.
The following table presents our CMO-B fixed maturity securities balances and tranche type as of the dates indicated:
($ in millions)
December 31, 2025
December 31, 2024
Tranche Type
Amortized Cost
Fair Value
% Fair Value
Amortized Cost
Fair Value
% Fair Value
Inverse Floater
Interest Only (IO)
Inverse IO
Principal Only (PO)
Floater
Agency Credit Risk Transfer
Other
Total
During the year ended December 31, 2025, the market value of our CMO-B securities portfolio was higher on a combination of transactional activity and valuation movements among tranche types. Transactional activity includes an increased allocation to Inverse Floaters.
The following table presents the returns of our CMO-B portfolio for the periods indicated:
Year Ended December 31,
($ in millions)
Net investment income
Net gains (losses) (1)
Income (loss) before income taxes
(1) Net gains (losses) also include derivatives interest settlements, mark to market adjustments and realized gains (losses) on standalone derivatives contracts that are in the CMO-B portfolio.
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In defining the Adjusted operating earnings before income taxes for our CMO-B portfolio (including CMO-B portfolio income (loss) related to businesses to be exited through reinsurance or divestment) certain recharacterizations are recognized. The net coupon settlement on interest rate swaps hedging CMO-B securities that is included in Net gains (losses) is reflected. In addition, the premium amortization and change in fair value for securities designated under the FVO are included in Net gains (losses), whereas the coupon for these securities is included in Net investment income. In order to present the economics of these fair value securities in a similar manner to those of an available for sale security, the premium amortization is reclassified from Net gains (losses).
After adjusting for the two items referenced immediately above, the following table presents a reconciliation of Income (loss) before income taxes from our CMO-B portfolio to Adjusted operating earnings before income taxes from our CMO-B portfolio for the periods indicated:
Year Ended December 31,
($ in millions)
Income (loss) before income taxes
Realized gains (losses) including impairment
Fair value adjustments
Total adjustments to income (loss)
Adjusted operating earnings before income taxes
Structured Securities
Residential Mortgage-backed Securities
The following tables present our residential mortgage-backed securities as of the dates indicated:
December 31, 2025
($ in millions)
Amortized Cost
Gross Unrealized Capital Gains
Gross Unrealized Capital Losses
Embedded Derivatives
Fair Value
Prime Agency
Prime Non-Agency
Alt-A
Sub-Prime (1)
Total
(1) Includes subprime other asset backed securities.
December 31, 2024
($ in millions)
Amortized Cost
Gross Unrealized Capital Gains
Gross Unrealized Capital Losses
Embedded Derivatives
Fair Value
Prime Agency
Prime Non-Agency
Alt-A
Sub-Prime (1)
Total
(1) Includes subprime other asset backed securities.
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Commercial Mortgage-backed Securities
The following tables present our commercial mortgage-backed securities by origination as of the dates indicated:
December 31, 2025
($ in millions)
AAA
BBB
BB and Below
Total
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Prior
Total
December 31, 2024
($ in millions)
AAA
BBB
BB and Below
Total
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Prior
Total
As of December 31, 2025, 84.9% and 8.0% of CMBS investments were designated as NAIC-1 and NAIC-2, respectively. As of December 31, 2024, 82.0% and 12.4% of CMBS investments were designated as NAIC-1 and NAIC-2, respectively.
Other Asset-backed Securities
The following tables present our other asset-backed securities as of the dates indicated:
December 31, 2025
($ in millions)
AAA
BBB
BB and Below
Total
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Collateralized Obligation
Auto-Loans
Student Loans
Credit Card loans
Other Loans
Total (1)
(1) Excludes subprime other asset backed securities.
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December 31, 2024
($ in millions)
AAA
BBB
BB and Below
Total
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Amortized Cost
Fair Value
Collateralized Obligation
Student Loans
Credit Card loans
Other Loans
Total (1)
(1) Excludes subprime other asset backed securities.
As of December 31, 2025, 85.0% and 9.9% of Other ABS investments were designated as NAIC-1 and NAIC-2, respectively. As of December 31, 2024, 88.9% and 9.3% of Other ABS investments were designated as NAIC-1 and NAIC-2, respectively.
Mortgage Loans on Real Estate
As of December 31, 2025 and 2024, our mortgage loans on real estate portfolio had a weighted average debt service coverage ratio ("DSC") of 2.15 times and 2.03 times, and a weighted average loan-to-value ("LTV") ratio of 42.1% and 43.4%, respectively. See the Investments (excluding Consolidated Investment Entities) Note and Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information on mortgage loans on real estate.
Impairments
We evaluate available-for-sale fixed maturities for impairment on a regular basis. The assessment of whether impairments have occurred is based on a case-by-case evaluation of the underlying reasons for the decline in estimated fair value. See the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for the policy used to evaluate whether the investments are impaired. Additionally, see the Investments (excluding Consolidated Investment Entities) Note in our Consolidated Financial Statements of Part II, Item 8. of this Annual Report on Form 10-K for further information on impairments.
Derivatives
We use derivatives for a variety of hedging purposes. We also have embedded derivatives within fixed maturities instruments and certain product features. See the Business, Basis of Presentation and Significant Accounting Policies Note and Derivative Financial Instruments Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information.
European Exposures
We quantify and allocate our exposure to the region by attempting to identify aspects of the region or country risk to which we are exposed. Among the factors we consider are the nationality of the issuer, the nationality of the issuer's ultimate parent, the corporate and economic relationship between the issuer and its parent, as well as the political, legal and economic environment in which each functions. By undertaking this assessment, we believe that we develop a more accurate assessment of the actual geographic risk, with a more integrated understanding of contributing factors to the full risk profile of the issuer.
In the normal course of our ongoing risk and portfolio management process, we closely monitor compliance with a credit limit hierarchy designed to minimize overly concentrated risk exposures by geography, sector and issuer. This framework considers various factors such as internal and external ratings, capital efficiency and liquidity and is overseen by a combination of Investment and Corporate Risk Management, as well as insurance portfolio managers focused specifically on managing the investment risk embedded in our portfolio.
As of December 31, 2025, our total European exposure had an amortized cost and fair value of $2.5 billion and $2.5 billion, respectively. Some of the major country level exposures were in the United Kingdom of $1.0 billion, in The Netherlands of
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$274 million, in France of $247 million, in Germany of $203 million, in Switzerland of $62 million, in Ireland of $180 million and in Belgium of $42 million.
Consolidated and Nonconsolidated Investment Entities
We use many forms of entities to achieve our business objectives and we have participated in varying degrees in the design and formation of these entities. These entities are considered to be variable interest entities ("VIEs") or voting interest entities ("VOEs"), (collectively, "Consolidated Investment Entities"), or nonconsolidated VIEs, and we evaluate our involvement with each entity to determine whether consolidation is required.
We perform a quarterly consolidation analysis to assess if the consolidation of a fund is required. The consolidation process brings on the assets, liabilities, noncontrolling interest and operations of the VIE and/or VOE into our financial statements.
If the fund no longer meets the criteria for consolidation, the assets, liabilities, noncontrolling interest and operations of the fund are removed from our financial statements. This process of consolidation/deconsolidation could have a material impact on total shareholders’ equity.
See Consolidation and Noncontrolling Interests and Fair Value Measurement in the Business, Basis of Presentation and Significant Accounting Policies Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. Additionally, see the Consolidated and Nonconsolidated Investment Entities Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for more information.
Securitizations
We invest in various tranches of securitization entities, including RMBS, CMBS and ABS. Refer to the Consolidated and Nonconsolidated Investment Entities Note and Fair Value Measurements (excluding Consolidated Investment Entities) Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for an understanding over the Company's Securitizations. Refer to the Investments (excluding Consolidated Investment Entities) Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for details regarding the carrying amounts and classifications of these assets.
Guarantors and Issuers of Guaranteed Securities
Voya Financial, Inc. (the "Parent Issuer") has issued certain notes pursuant to transactions registered under the Securities Act of 1933. As of December 31, 2025, such securities consist of (i) the 3.65% senior notes due 2026, the 5.0% senior notes due 2034, the 5.7% senior notes due 2043, and the 4.8% senior notes due 2046, with an aggregate principal amount of $1.5 billion (collectively, the "Senior Notes") and (ii) the 4.7% fixed-to-floating junior subordinated notes due 2048, with principal amount of $336 million (the "Junior Subordinated Notes" and, together with the Senior Notes, the "Registered Notes"). As of December 31, 2024, such securities consist of (i) the 3.976% senior notes due 2025, which was repaid at maturity on February 14, 2025, the 3.65% senior notes due 2026, the 5.0% senior notes due 2034, the 5.7% senior notes due 2043, and the 4.8% senior notes due 2046, with an aggregate principal amount of $1.9 billion and (ii) the 4.7% fixed-to-floating junior subordinated notes due 2048, with principal amount of $336 million.
Voya Holdings, Inc. (the "Subsidiary Guarantor"), a wholly owned subsidiary of the Parent Issuer, has guaranteed each of the Registered Notes on a full and unconditional basis. No other subsidiary of the Parent Issuer has guaranteed any of the Registered Notes. The Parent Issuer and the Subsidiary Guarantor are hereby referred to below as the "Obligor Group."
The full and unconditional guarantees require the Subsidiary Guarantor to satisfy the obligations of the guaranteed security immediately, if and when the Parent Issuer has failed to make a scheduled payment thereunder. If the Subsidiary Guarantor does not make such payment, any holder of the guaranteed security may immediately bring suit directly against the Subsidiary Guarantor for payment of amounts due and payable.
Set forth below is summarized financial information of the Obligor Group, as presented on a combined basis. Intercompany transactions and balances within the Obligor Group have been eliminated. In addition, financial information of any non-issuer or non-guarantor subsidiaries, which would normally be consolidated by either the Parent Issuer or the Subsidiary Guarantor under U.S. generally accepted accounting principles, has been excluded from such presentation.
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Refer to the Summarized Financial Information of the Obligor Group for the periods indicated:
As of and for the year ended December 31,
($ in millions)
Summarized Statements of Operations Information:
Total revenues
Total benefits and expenses
Income (loss), net of tax
Net income (loss) before equity in earnings (losses) of unconsolidated affiliates
Net income (loss) available to Obligor Group
Summarized Balance Sheets Information:
Total investments
Cash and cash equivalents
Deferred income taxes
Goodwill
Loans to non-obligated subsidiaries
Due from non-obligated subsidiaries
Total assets
Short-term debt with non-obligated subsidiaries
Due to non-obligated subsidiaries
Short-term debt
Long-term debt
Total liabilities
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