Voya Financial, formerly known as ING US, has reached an agreement to have Milliman, Inc. provide the hedging, modelling and actuarial valuation services to the firm’s closed-block variable annuity (VA) business for an undisclosed sum. The transition is expected to be completed in 2015.
This outsourcing initiative allows Voya to distance itself further from its variable annuity business. In 2009, the firm made a decision to end sales of its variable annuities which contained substantial guarantee features. The last of these VA contracts were sold in early 2010.
“We have a longstanding relationship with Milliman, which has been a consultant on our Closed Block Variable Annuity (CBVA) segment for several years and has a strong understanding of variable annuity products,” a Voya spokesman told SRP.
Since ending new sales, the company has ring-fenced its previous VA contracts into a separate entity of “closed block variable annuities” which is kept fully separated from its retirement solutions, investment management and insurance solutions businesses. It also changed the hedging program to protect existing VA contract holders from adverse equity market movements.
According to Voya’s secondary offering document filed with the US Securities & Exchange Commission (SEC) in March 2014, assets in the closed block variable annuity business totalled over $49.5bn as of the end of last year.
The firm said that it continues on its mission to become “America’s Retirement Company” and continues to sell and service fixed, immediate and indexed annuities that are linked to the performance of an index or benchmark.
In a related move, this past April Voya hired Carolyn Johnson as the president of its annuities business segment, reporting to Maliz Beams, CEO of Retirement Solutions, the unit within which the non-variable annuities businesses reside.
Formerly known as ING, the company began selling shares publicly last year and rebranded as Voya Financial two months ago.
According to SRP data, ING was an active provider of indexed annuities in the US market between 2002 and 2007. There are currently ten live ING structures in the US.