Voya 2013 Annual Report Download - page 35

risk. 100% of the excess over $10 million then went into the pool. Our maximum overall retained risk on any one
life was $10 million. The following table presents our top five exposures as of December 31, 2013:
Exposure
Reinsurer
shown as a percentage of
Total Reinsurance(1)
Swiss Re ............................... 28.8%
Reinsurance Group of America .............. 22.3%
SCOR .................................. 22.0%
GenRe................................. 9.0%
Munich ................................. 6.6%
1) “Total Reinsurance” equals net amount at risk (“NAR”) proportions of policies that have been placed with
reinsurers (as of December 31, 2013).
Currently, reinsurance for new business is on a monthly renewable term basis, which only transfers
mortality risk and limits our counterparty risk exposure. See “Item 7A. Quantitative and Qualitative Disclosures
About Market Risk—Risk Management”.
Seasonality
We typically experience seasonality in our Individual Life segment results.
• The fourth quarters tend to have the highest level of universal life insurance sales. This seasonal pattern
is also typical for the industry.
Employee Benefits
Our Employee Benefits segment provides group insurance products to mid-size and large corporate
employers and professional associations. In addition, our Employee Benefits segment serves the voluntary
worksite market by providing individual and payroll-deduction products to employees of our clients. Our
Employee Benefits segment is among the largest writers of medical stop loss coverage in the United States,
currently ranking sixth on a premium basis with over $550.0 million of in-force premiums. We also hold top-20
positions in the group life and Voluntary Benefits (“VB”) markets on a premium basis. As of December 31,
2013, Employee Benefits total in-force premiums were $1.3 billion.
The Employee Benefits segment generates revenue from premiums, investment income, mortality and
morbidity income and policy and other charges. Profits are driven by the spread between investment income and
credited rates to policyholders on voluntary universal life and whole life products, along with the difference
between premiums and mortality charges collected and benefits and expenses paid for group life, stop loss and
voluntary health benefits. Our Employee Benefits segment generated operating earnings before income taxes of
$106.1 million for the year ended December 31, 2013.
The Employee Benefits segment offers attractive growth opportunities with much less capital strain. For
example, we believe there are significant opportunities through expansion in the VB market as employers shift
benefits costs to their employees. We have a number of new products and initiatives that we believe will help us
drive growth in this market. In addition to the VB marketplace, we believe similar growth exists in the affinity
marketplace. While expanding these lines, we also intend to continue to focus on profitability in our well
established group life and stop loss product lines, by adding profitable new business to our in-force block,
improving our persistency by retaining more of our best performing groups, and managing our loss ratios to
below 80%, particularly on stop loss policies.
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