Voya 2014 Annual Report Download - page 151

Net guaranteed benefit hedging gains (losses) and related charges and adjustments decreased $32.2 million
from $19.4 million to $(12.8) million primarily due to changes in the fair value of guaranteed benefit derivatives
excluding nonperformance risk, as a result of interest rate and equity market movements. The decrease was
partially offset by $130.3 million in changes in the fair value of guaranteed benefit derivatives related to
nonperformance risk (including changes in the technique used to estimate nonperformance risk).
Loss related to businesses exited through reinsurance or divestment increased $97.5 million from $59.8
million to $157.3 million primarily due to $89.4 million of charges in the current period as a result of our
decision to exit a block of term life insurance business through reinsurance. Additionally, we experienced losses
associated with a block of business in our Retirement segment that was reinsured during the current period,
which were partially offset by lower costs associated with the business transferred via reinsurance from us to
Hannover Re.
Immediate recognition of net actuarial gains (losses) related to pension and other postretirement benefit
obligations and gains (losses) from plan adjustments and curtailments decreased $777.9 million. We
immediately recognize actuarial gains and losses. A net actuarial loss of $372.7 million was recorded in the
current period, driven primarily by the net impact of a decrease in the discount rate used to value benefit
obligations and an update to mortality assumptions. A net actuarial gain of $405.2 million was recorded in the
prior period, primarily due to strong investment returns in the assets of the pension plan and an increase in the
discount rate.
Other adjustments to operating earnings changed $32.0 million from $(68.2) million to $(100.2) million
primarily due to rebranding and restructuring expenses in the current period, partially offset by costs related to
the divestment of the Company by ING Group in the prior period that did not reoccur.
Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Net Income (Loss)
Net investment income decreased $8.9 million from $4,697.9 million to $4,689.0 million primarily as a
result of portfolio restructuring in the prior period, the impact of the continued low interest rate environment on
reinvestment rates, and lower average volumes in our Annuities and Closed Block Institutional Spread Products
segments. Partially offsetting the overall decline is higher prepayment fee income, net investment income from
Lehman Recovery/LIHTC in the current period, a loss on sale of certain alternative investments in the prior
period and an increase in assets in our Retirement segment.
The decline in the volumes of our Annuities segment is a result of the continuing run-off of MYGAs. Our
Closed Block Institutional Spreads Products segment experienced a decline as a result of a decrease in block size.
Fee income increased $150.9 million from $3,515.4 million to $3,666.3 million primarily due to an increase
in fees in our Retirement, CBVA and Investment Management segments associated with higher AUM.
Premiums increased $95.2 million from $1,861.1 million to $1,956.3 million primarily due to higher
premiums associated with the annuitization of life contingent contracts in our CBVA segment, which are offset
by a reserve increase in the corresponding Interest credited and other benefits to contract owners/policyholders.
Net realized capital losses increased $1,254.0 million from $1,280.8 million to $2,534.8 million primarily
due to changes in fair value of derivatives from the CBVA segment liability hedge and CHO program, lower net
realized investment gains, and changes in fair value of guaranteed benefit derivatives due to nonperformance risk
in our CBVA segment. Lower gains on guaranteed benefit derivative hedging, excluding nonperformance risk, in
our Retirement Solutions business were mostly offset by changes in the fair value of guaranteed benefit
derivatives related to nonperformance risk. In addition, losses resulting from market value changes in the
derivative associated with business reinsured are entirely offset by the corresponding Interest credited and other
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