Voya Q3 2026 Adjusted EPS Rises to $2.60 Despite Severance Costs

Voya Financial reported higher third-quarter 2026 adjusted operating earnings per share despite severance costs, while strong Retirement inflows and improving Employee Benefits underwriting supported operating momentum. The company also expects to generate more than $800 million of excess capital in 2026, exceeding the approximately $775 million generated in 2025.

Adjusted operating EPS rose to $2.60 from $2.45 a year earlier, including an approximately $0.20-per-share severance impact. Adjusted operating earnings after tax were $240 million, compared with $239 million in the prior-year quarter, while net income available to common shareholders increased to $193 million from $176 million. Trailing-12-month adjusted operating EPS was $8.32, up from $8.29.

Voya said year-to-date expense actions are expected to benefit the fourth quarter of 2026 and full-year 2027. Third-quarter pretax severance costs were approximately $25 million, bringing year-to-date severance to about $70 million.

Retirement inflows support fee growth

Retirement adjusted operating earnings increased to $266 million from $261 million. Trailing-12-month earnings rose 1% to $920 million even though alternative investment income was $35 million lower than in the previous 12-month period.

Fee-based revenue grew 6% year over year as participant accounts increased 5%. The business recorded $13.8 billion of net inflows during the quarter, alongside strong sales and plan retention. Its trailing-12-month operating margin was 37.8%, including continued reinvestment in the business.

Defined Contribution assets reached $805 billion at the end of the quarter, compared with $728 billion at the end of 2025. Participant accounts increased to 10.3 million, while year-to-date Defined Contribution net flows totaled $12.7 billion.

Voya plans to continue expanding its Wealth Management offerings, maintaining commercial momentum and improving productivity while investing for growth. The company expects Retirement administrative expenses in the second half of 2026 to be at the lower end of its $530 million to $545 million range.

Investment Management maintains institutional demand

Investment Management adjusted operating earnings declined to $58 million from $62 million in the third quarter, excluding noncontrolling interests. On a trailing-12-month basis, however, earnings increased 6% to $233 million.

Fee-based revenue grew 4% year over year, supported by flows at what the company described as stable and attractive yields. Institutional demand produced $870 million of quarterly net inflows, while retail demand for income-oriented products improved. The trailing-12-month operating margin was 28.6%.

Assets under management were $363 billion at September 30, compared with $360 billion at the end of 2025. Year-to-date net inflows totaled $2.7 billion, representing an organic growth rate of 0.8%. Assets under management included a previously disclosed $5 billion reduction related to a sub-adviser transition.

Management’s priorities include maintaining momentum in insurance asset management and international retail channels, expanding the U.S. intermediary product range, and scaling alternative and private-asset strategies.

Employee Benefits underwriting improves

Employee Benefits adjusted operating earnings rose to $51 million from $47 million. Trailing-12-month earnings more than doubled to $126 million from $59 million.

The aggregate loss ratio improved by four percentage points year over year to 74% for the trailing 12 months. Voya attributed the progress partly to better Stop Loss results following pricing and underwriting actions. Group Life trends remained favorable, while Voluntary performance was in line with the company’s expectations.

Third-quarter results included $12 million of favorable assumption updates, consisting of a $28 million favorable impact in Group Life and a $16 million unfavorable impact in Voluntary. Voya expects second-half administrative expenses for Employee Benefits to be at the lower end of a $265 million to $275 million range.

Capital generation and balance sheet

Voya generated $225 million of excess capital in the quarter, equivalent to about 95% of adjusted operating earnings after tax. For the full year, the company expects more than $800 million of excess capital and free-cash-flow conversion of at least 90%, despite the year-to-date severance costs.

The company reported approximately $250 million of excess capital at September 30, a 396% risk-based capital ratio compared with its 375% target, and financial leverage of 27%, within its 25% to 30% target range.

Voya increased its annualized dividend by 21% to $2.28 from $1.98. Active share repurchases have reduced its share count by 14% since the end of 2022, with weighted-average diluted shares at approximately 92 million in the third quarter.

Management said scaled businesses, commercial opportunities, expense actions and operating leverage provide a foundation for earnings and cash-generation growth. Commercial momentum is also expected to support revenue growth in 2027.

The outlook remains exposed to equity markets, interest rates, investment returns and insurance claims. Voya estimates that a 10% change in the S&P 500 would affect annualized pretax earnings by approximately $65 million to $90 million, while a one-percentage-point change in the Employee Benefits aggregate loss ratio would have a $25 million to $35 million impact. Other stated risks include geopolitical and economic conditions, inflation, tariffs, liquidity and credit pressures, cybersecurity, regulatory changes and the company’s ability to achieve expected results from strategic transactions and third-party relationships.