Voya 2014 Annual Report Download - page 42

Since December 2013, we have been engaged in a strategic alliance with The Allstate Corporation under
which Allstate offers a full suite of our fixed annuity product offerings to Allstate customers. These fixed annuity
products are issued by VIAC and VRIAC.
Competition
Our Annuities segment faces competition from traditional insurance carriers, as well as banks, mutual fund
companies and other investment managers such as Allianz, Aviva, American Equity, AXA, Lincoln and Great
American. Principal competitive factors for fixed annuities are initial crediting rates, reputation for renewal
crediting action, product features, brand recognition, customer service, cost, distribution capabilities and
financial strength ratings of the provider. Competition may affect, among other matters, both business growth
and the pricing of our products and services.
Mutual fund custodial products compete with brokerage accounts and other financial service and asset
allocation offerings.
Underwriting and Pricing
We generally do not underwrite individual lives in our Annuities segment. Instead, we price our products
based upon our expected investment returns and our expectations for mortality, longevity and persistency for the
group of our contract holders as a whole, taking into account our historical experience. We price annuities by
analyzing longevity and persistency risk, volatility of expected earnings on our AUM and the expected time to
retirement. Our product pricing models take into account many additional factors as applicable, including, among
other things, capital requirements, hedging costs and operating expenses.
Our custodial mutual fund account is a fee-based, recordkeeping product, for which the recordkeeping fees,
combined with estimated mutual fund revenue sharing, are priced to cover acquisition and operating costs over
the life of the account. These custodial mutual fund products do not generate investment margins, do not expose
us to significant mortality risk and no hedging is required.
Investment Management
We offer domestic and international fixed income, equity, multi-asset and alternatives products and
solutions across market sectors, investment styles and capitalization spectrums through our actively managed,
full-service investment management business. Multiple investment platforms are backed by a fully integrated
business support infrastructure that lowers expense and creates operating efficiencies and business leverage and
scalability at low marginal cost. As of December 31, 2014, our Investment Management business managed $78.8
billion for third-party institutions and individual investors, $49.8 billion in separate account assets for our
Retirement Solutions and Insurance Solutions businesses and our Closed Block segments and $77.6 billion in
general account assets.
We are committed to investing responsibly and delivering research-driven, risk-adjusted, client-oriented
investment strategies and solutions and advisory services across asset classes, geographies and investment styles.
We serve a variety of institutional clients, including public, corporate and Taft-Hartley Act defined-benefit and
defined-contribution retirement plans, endowments and foundations, and insurance companies through our
institutional distribution channel and through affiliates. We also serve individual investors by offering our mutual
funds and separately managed accounts through an intermediary-focused distribution platform or through
affiliate and third-party retirement platforms.
Investment Management’s primary source of revenue is management fees collected on the assets we
manage. These fees typically are based upon a percentage of AUM. In certain investment management fee
arrangements, we may also receive performance-based incentive fees when the return on AUM exceeds certain
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