Voya 2013 Annual Report Download - page 25

they are grouped into two primary categories: affiliated field-based representatives and home office phone-based
representatives. Affiliated field-based representatives are registered sales and investment advisory representatives
in our retail broker dealer that drive both fee-based and commissioned sales. They provide face-to-face
interaction with individuals who either participate within or are external to our Institutional Retirement Plans
business and who seek financial advice and retail investment products (e.g., rollover products) as well as
retirement and financial planning solutions. Home office phone-based representatives primarily focus on our
unique growth opportunity of assisting participants in our large recordkeeping plans. They offer the same broad
suite of products and services as the affiliated field-based representatives, but are highly trained in providing
financial advice that helps customers transition through life stage and job-related changes.
In an effort to develop a path for either of these categories of affiliated representatives to offer holistic
retirement planning solutions to participants in our Institutional Retirement Plans, we partner with our
institutional clients to engage participants and offer retirement and personalized financial planning providing the
appropriate solutions to their employees. Our program is designed to engage, educate, advise and motivate
employees to take action that will better prepare them for retirement.
Competition
Our Individual Markets advisory services and product solutions compete for rollover and other asset
consolidation opportunities against asset managers, banks, wirehouses and other broker-dealers who also offer
individual retirement products, all of which currently have more market share than insurance based providers in
this space. Primary competitors to our Individual Markets business are Fidelity, Vanguard, Morgan Stanley
Smith Barney, Bank of America Merrill Lynch, TIAA-CREF and Ameriprise.
Our Individual Markets advisory services and product solutions compete based on our consultative
approach, simplicity of design and a fund and investment selection process that includes proprietary and non-
proprietary investment options. The advisory services and product solutions are primarily targeted towards
existing participants, which allows us to benefit from our extensive relationships with large corporate and tax-
exempt plan sponsors, our small and mid corporate market plan sponsors and other qualified plan segments in
healthcare, higher education and K-12 education.
Underwriting and Pricing
We price our institutional and individual retirement products based on long-term assumptions that include
investment returns, mortality, persistency and operating costs. We establish target returns for each product based
upon these factors and the expected amount of regulatory and rating agency capital that we must hold to support
these contracts over their projected lifetime. We monitor and manage pricing and sales mix to achieve target
returns. It may take new business several years before it is profitable, depending on the nature and life of the
product, and is subject to variability as actual results may differ from pricing assumptions. We seek to mitigate
investment risk by actively managing market and credit risks associated with investments and through asset/
liability matching portfolio management.
Annuities
The Annuities segment provides fixed and indexed annuities, tax-qualified mutual fund custodial products
and payout annuities for pre-retirement wealth accumulation and post retirement income management, sold
through multiple channels. Revenues are generated from fees and from margins based on the difference between
income earned on the investments supporting the liability and interest credited to customers. Our Annuities
segment generated operating earnings before income taxes of $293.8 million for the year ended December 31,
2013. As of December 31, 2012, we were ranked fifth in AUM of fixed indexed annuities (“FIAs”) according to
LIMRA’s U.S. Individual Annuity Yearbook 2012.
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