Voya 2014 Annual Report Download - page 136

Competition
Our Ongoing Business operates in highly competitive markets. We face a variety of large and small industry
participants, including diversified financial institutions, investment managers and insurance companies. These
companies compete in one form or another for the growing pool of retirement assets driven by a number of
exogenous factors such as the continued aging of the U.S. population and the reduction in safety nets provided by
governments and corporations. In many segments, product differentiation is difficult as product development and
life cycles have shortened. In addition, we have experienced pressure on fees as product unbundling and lower
cost alternatives have emerged. As a result, scale and the ability to provide value-added services and build long-
term relationships are important factors to compete effectively. We believe that our leading presence in the
retirement market and resulting relationships with millions of participants, diverse range of capabilities (as a
provider of retirement, investment management and insurance products and services) and broad distribution
network uniquely position us to effectively serve consumers’ increasing demand for retirement savings, income
and protection solutions.
Seasonality and Other Quarterly 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 have elevated operating expenses, reflecting higher payroll taxes and
certain other expenses that tend to be concentrated in the first quarters. Additionally, alternative investment
income tends to be lower in the first quarters. Other seasonal factors that affect the reporting segments making up
our Ongoing Business include:
Retirement
• The first quarters tend to have the highest level of recurring deposits in Corporate Markets, 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. Corporate Market withdrawals
also tend to increase in the first quarters as departing sponsors change providers at the start of a new
year.
• In the third quarters, education tax-exempt markets typically have the lowest recurring deposits.
• The fourth quarters tend to have the highest level of single/transfer deposits due to new Corporate
Market plan sales as sponsors transfer from other providers when contracts expire at the fiscal or
calendar year-end. Recurring deposits in the Corporate Market may be lower in the fourth quarters as
higher paid participants scale back or halt their contributions upon reaching the annual maximums
allowed for the year. Finally, Corporate Market withdrawals tend to increase in the fourth quarters, as
in the first quarters, due to departing sponsors.
Investment Management
• The first quarters tend to have lower investment income from carried interest income recorded from
investments in private equity, and also tend to have the lowest performance fees.
• In the fourth quarters, performance fees are typically higher due to certain performance fees being
associated with calendar-year performance against established benchmarks and hurdle rates.
Individual Life
• The fourth quarters tend to have the highest levels of universal life insurance sales. This seasonal
pattern is typical for the industry.
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