Voya 2014 Annual Report Download - page 46

Investment Management manages a variety of variable portfolios and mutual funds which are sold through
our Retirement Solutions and Insurance Solutions businesses. As of December 31, 2014, total AUM from these
channels and CBVA was $59.0 billion with the majority of the assets gathered through our Retirement segment.
Competition
Investment Management competes with a wide array of asset managers and institutions in the highly
fragmented U.S. investment management industry. In our key market segments, Investment Management
competes on the basis of, among other things, investment performance, investment philosophy and process,
product features and structure and client service. Our principal competitors in the Investment Management
business include insurance-owned asset managers such as Principal Global Investors (Principal Financial Group),
Prudential and Ameriprise, bank-owned asset managers such as J.P. Morgan Asset Management, as well as
“pure-play” asset managers including PIMCO, Invesco, Wellington, Legg Mason, T. Rowe Price, Franklin
Templeton and Fidelity.
Insurance Solutions
Our Insurance Solutions business comprises two reporting segments: Individual Life and Employee
Benefits. Our strategy is based on a broad and effective distribution model, fueled by a manufacturing capability
that provides a stream of competitive product solutions, all supported by an efficient operations and underwriting
model.
Individual Life
Our Individual Life segment has a broad independent distribution footprint and manufactures a wide range
of competitive products, from low-cost term life insurance designed to serve the middle market to fixed, indexed
and variable universal life insurance products targeted to more affluent markets. We have re-priced certain
products and will continue to monitor changes to the product portfolio to align with market conditions. As of
September 30, 2014, we were the eighteenth largest writer of term life in the United States. As of September 30,
2014, we were the nineteenth largest writer of universal life in the United States based on premiums sold or
written. Our strong market positions have allowed us to properly scale our business to achieve greater
profitability. Our larger term operation is a crucial part of achieving this scale and can be adjusted through
pricing changes as necessary. As of December 31, 2014, Individual Life’s in-force book comprised over
1.1 million policies and gross premiums and deposits of over $2.0 billion.
The Individual Life segment generates revenue on its products from premiums, investment income, expense
load, mortality charges and other policy charges, along with some asset-based fees. Profits are driven by the
spread between investment income earned and interest credited to policyholders, plus the difference between
premiums and mortality charges collected and benefits and expenses paid. Our Individual Life segment generated
operating earnings before income taxes of $237.3 million for the year ended December 31, 2014.
We intend to achieve our earnings growth in our Individual Life segment by focusing on growing our
earnings drivers. Our earnings drivers include growing our in-force block of business by adding new businesses
and entering new markets that meet our profit and capital requirements, combined with effectively managing our
in-force block to meet our profitability objectives. They also include focusing on improving our investment
margins, growing our mortality profits and fully exploiting our technological capability in order to continue to
reduce the new business unit costs and underwriting expense. In addition, we will further our financial objectives
by continuing to utilize reinsurance to actively manage our risk and capital profile with the goal of controlling
exposure to losses, reducing volatility and protecting capital. We aim to maximize earnings and capital efficiency
in part by relieving the reserve strain for certain of our term and universal life products by means of reinsurance
arrangements and other financing transactions. We also look to transfer certain blocks of business through
reinsurance in order to more effectively manage our capital. For example, in 2014 we reinsured an in-force block
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