Voya 2014 Annual Report Download - page 84

Item 1A. Risk Factors
We face a variety of risks that are substantial and inherent in our business, including market, liquidity,
credit, operational, legal, regulatory and reputational risks. The following are some of the more important factors
that could affect our business.
Risks Related to Our Business—General
Continued difficult conditions in the global capital markets and the economy generally have affected and may
continue to affect our business and results of operations.
Our business and results of operations are materially affected by conditions in the global capital markets and
the economy generally. Deviating economic growth rates globally and attendant diverging paths of monetary
policy could create new global imbalances, increasing market volatility and potentially impacting the availability
and cost of credit.
In 2011, Standard & Poor’s Ratings Services (“S&P”) lowered its long term sovereign credit rating on the
United States from AAA to AA+. Concerns persist around the long-term sustainability of the nation’s debt
profile given expectations regarding future entitlement spending and persistent budget deficits.
Long-term structural headwinds remain in the Eurozone’s move towards a closer currency, fiscal, economic
and monetary union. In addition, significant concerns persist regarding the sovereign debt of Greece, as well as
certain other countries, which in some cases have required countries to obtain emergency financing. The
financial turmoil in Europe continues to be a long-term threat to global capital markets and remains a challenge
to global financial stability. If these or other countries require additional financial support or if sovereign credit
ratings decline further, yields on the sovereign debt of certain countries may increase, the cost of borrowing may
increase and the availability of credit may become more limited. Additionally, the possibility of capital market
volatility spreading through a highly integrated and interdependent banking system remains elevated. In the event
of any default or similar event with respect to a sovereign issuer, some financial institutions may suffer
significant losses for which they would require additional capital, which may not be available.
Weakening global growth has reduced the demand for certain commodities, resulting in sharply lower prices
in 2014. While reduced energy and commodity prices may produce positive offsets for much of our investment
portfolio, prolonged low prices could negatively impact the credit profile of issuers that produce these
commodities or countries that chiefly export these commodities. Heightened geopolitical risk, most notably in
Eastern Europe and the Middle East, could also lead to an increase in market volatility.
The Board of Governors of the Federal Reserve System (the “Federal Reserve”) has begun to scale back
programs that have in recent years fostered a historically low interest rate environment, which could generate
volatility in debt and equity markets including increases in interest rates and associated declining values on fixed
income investments. As the Federal Reserve moves towards normalizing monetary policy and moving short-term
interest rates off of their lower bound, the central bank may adversely affect prospects for continued economic
recovery with little headroom for incremental monetary accommodation. Our results of operations, investment
portfolio and AUM are exposed to these risks and may be adversely affected as a result. In addition, in the event
of extreme prolonged market events, such as the recent global credit crisis, we could incur significant losses.
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