管理層發言
Good morning. Welcome to Voya Financial's Second Quarter 26 Earnings Conference Call. All participants will have an opportunity to ask questions after today's presentation. Please note this event is being recorded. I would now like to turn the call over to Mei Ni Chu, Head of Investor Relations. Please go ahead.
Good morning. Thank you for joining our second quarter earnings conference call. We will begin with prepared remarks by Heather Hamilton Lavallee, our Chief Executive Officer, and Michael Katz, our Chief Financial Officer. Following their prepared remarks, we will take your questions. Also joining the call are Jay Stuart Kaduson, CEO of Workplace Solutions; and Matthew Toms, our CEO of Investment Management. As a reminder, materials for today's call are available on our website at investors.voya.com. As noted on Slide 2 of our analyst presentation, some of the comments during today's discussion may contain forward-looking statements and refer to certain non-GAAP financial measures within the meaning of federal securities law. GAAP reconciliations are available in our press release and financial supplement found on our Investor Relations website. I will now turn the call over to Heather.
Thank you, Mei Ni. Good morning and thank you for joining us today. Let's turn to slide 4. Our businesses performed well in the second quarter. Strong underlying results were affected by lower alternative investment performance and by severance costs we incurred to reduce our expense base. For the quarter, we delivered adjusted operating earnings of $1.51 per share, generated approximately $150 million of excess capital and returned approximately $200 million to shareholders through repurchases and dividends. As Mike will cover in more detail, fundamental performance trends and the immediate payback from these expense actions give us a clear line of sight to increased earnings and cash generation in the second half. Our performance this quarter highlighted continued execution of our strategic priorities. We delivered strong commercial results in Retirement and Investment Management, we are stabilizing and growing margins in Employee Benefits, and we are expanding wealth management capabilities to drive future revenue growth.
Turning to our business results. In Retirement, we generated over $8 billion of defined contribution net inflows in the quarter supported by continued high client retention and large plan implementations in government and corporate markets. In government markets, where Voya leads the industry, we have added more than $30 billion in assets and approximately 1 million participants in the past 18 months through organic growth. We are also driving strong full-service growth in key segments with emerging market sales up over 30% year over year. We completed the final phase of our OneAmerica integration during the quarter, marking the conclusion of a highly successful acquisition and integration effort that has significantly exceeded the financial goals we set. We continue to build momentum in wealth management, with year-over-year revenue growth of 12%. Our retirement franchise now exceeds 10 million participant accounts and wealth management allows us to deepen those participant relationships and serve customers in a more comprehensive way.
Our results this quarter demonstrate Voya's leadership position in the retirement market. Our business is delivering consistent flows, high client retention and significant growth in participant accounts. Our presence across markets and expansive distribution footprint provides a durable foundation for sustainable growth. As we further develop our wealth management capabilities, we are building a platform that can serve an expanding customer base with the solutions they need for a confident financial future. In investment management, we generated positive net flows for both the quarter and the year supported by client demand across a broad range of investment strategies and distribution channels. We expanded our product offerings during the quarter, including the launch of two multi-manager collective investment trusts that enhance the private and alternative asset solutions we bring to retirement plan clients.
Our investment performance remains a clear strength with 83% of assets outperforming peers or benchmarks over three years, and 85% outperforming over 10 years. The strong outcomes we deliver for clients are driving continued commercial success and strengthen the role investment management plays in Voya's broader workplace and wealth management strategy. In employee benefits, we continue to improve and strengthen the business. In Stop Loss, we have stabilized loss ratios and margins across the entire book while maintaining the strength of our reserves. Early 26 experience reinforces our confidence that the actions we have taken will continue to drive higher margins and restore the business to its historical earnings power. Across the portfolio, disciplined pricing, underwriting and risk selection are improving margins and allowing us to focus on business that meets our return expectations. I will now turn it over to Mike to walk through the financials in more detail. Mike?
Thank you, Heather. Turning to slide 6. In the quarter, adjusted operating earnings were $140 million or $1.51 per diluted share. That result includes an approximate $0.90 per share impact from alternative investment performance below expectations as well as severance actions. The alternative investment impact was driven primarily by macro market conditions affecting our private equity portfolio, which are reported on a one-quarter lag. Year-to-date returns remain positive and we expect results to improve in the third quarter. On severance, we expect the resulting expense savings to fully offset the upfront costs by year-end. These actions improve efficiency, reduce ongoing expenses, and allow us to invest in long-term growth. While these items affected second quarter EPS, the underlying business trends remain strong. Continued commercial momentum in retirement and investment management along with improving margins in employee benefits support our confidence in meaningfully higher earnings in the second half.
With that, let me turn to the segment results. Starting with Retirement on Slide 7. Adjusted operating earnings were $190 million in the quarter. Results were impacted by lower spread income, reflecting alternative investment performance below expectations. Excluding the alternative investment impact, core spread income remained resilient supported by reinvestment at higher rates. On a trailing 12-month basis, adjusted operating earnings increased 6%. Fee-based revenue increased 10% year over year, now representing over 60% of revenue. Margins remained healthy at 38%. Defined contribution net flows were $8.1 billion in the quarter, supported by continued high client retention and large plan implementations in both government and corporate markets. Our platform now serves more than 10 million participant accounts providing meaningful scale to drive future fee-based revenue growth. Stepping back, robust flows, high client retention, and growth in participant accounts reinforce the strength of our retirement franchise.
Turning to Investment Management on slide 8. Adjusted operating earnings increased 12% year over year to $57 million driven by higher advisory fees across institutional and retail channels. On a trailing 12-month basis, adjusted operating earnings increased 11% reflecting both those higher advisory fees as well as disciplined expense management. Net inflows were $1.2 billion in the quarter and are now $6.3 billion over the last 12 months. Looking ahead, we continue to see healthy client demand for our differentiated investment capabilities and robust investment performance. At the same time, the second half will include the wind down of a legacy relationship, which will modestly offset momentum in actively distributed products. Importantly, the revenue impacts from this are expected to be immaterial in 2026. Overall, Investment Management delivered solid earnings growth supported by positive flows, healthy client demand and strong investment performance.
Turning to Employee Benefits on slide 9. Adjusted operating earnings were $22 million in the quarter and $122 million over the last 12 months. In the quarter, we released $8 million of reserves in stop loss while continuing to hold reserves at the high end of our best estimate range. Early claims experience on 2026 business is encouraging and is emerging favorably relative to both 2024 and 2025 business. We also continue to see favorable underwriting conditions as we complete the non-January 2026 selling season and begin pricing for January 2027. In Group Life, results continue to benefit from favorable mortality consistent with broader industry trends. This helped to offset higher voluntary loss ratios in the quarter which were elevated in part due to non-recurring items. For voluntary, while one-time items contributed to higher loss ratios in the quarter, the broader trend remains consistent with our expectations as expense actions are supporting our plan to maintain net margins.
Stepping back, the underlying fundamentals across the portfolio remain strong highlighted by the five-point improvement in aggregate loss ratios over the last 12 months. Our disciplined approach to risk selection, pricing and expense management reinforces our ability to deliver further margin expansion and earnings growth in Employee Benefits. Turning to slide 10. We generated approximately $150 million of excess capital in the second quarter and $350 million year-to-date with cash conversion above 100% in the quarter. We remain on track for 2026 cash generation to exceed 2025 levels, supported by strong cash conversion, second half earnings outlook and the expense actions we have discussed. On capital deployment, we repurchased $150 million of shares in the second quarter and $300 million year-to-date. We ended the quarter with approximately $200 million of excess capital preserving flexibility while continuing to return capital to shareholders.
For the third quarter, we expect to deploy at least $100 million towards share repurchases and the second half cash generation outlook gives us flexibility to deploy additional capital in the fourth quarter. Return on equity was impacted by alternative investment and severance items which is why we are explicitly calling them out rather than leaving investors to reconcile the effect on their own. Stepping back, the second half outlook is supported by business momentum, expense discipline and improving fundamentals. Most importantly, cash generation remains strong and we remain on track for 2026 to exceed 2025 levels. With that, I will turn it back to Heather.
Let me close on slide 11 which brings together the key points from today's discussion. We are carrying strong commercial momentum into the second half particularly in retirement and investment management. We continue to improve margins in employee benefits supported by the pricing and underwriting actions we have taken across the portfolio. The expense actions we took in the second quarter alongside a more constructive macro environment provide a tailwind for increased earnings in the second half. Our cash generation remains strong with 2026 on track to exceed 2025 levels and conversion rates above our 90% target. We continue to be disciplined in deploying capital. We returned more than $380 million to shareholders in the first half of 26. We are maintaining our commitment to return capital to shareholders in the second half with our repurchase program active in the market and at least $100 million of buybacks planned for the third quarter.
Together, these actions reinforce our confidence in our strategy and position Voya to deliver continued earnings growth, strong cash generation and shareholder value. Before we go to questions, I want to thank our employees across Voya. Every day, they help our customers navigate some of life's most important financial decisions with greater confidence. Their focus and commitment continue to drive our success. With that, I will turn it over to the operator so we can take your questions.
分析師問答
Thank you. We will now begin the question and answer session. Our first question is from Kenneth Lee with RBC Capital. Please proceed.
Hey, good morning and thanks for taking my question. Just one on the investment management side, the institutional net inflows in the quarter. If you could talk a little bit more about some of the drivers there and perhaps also any color on the composition of the pipeline? Thanks.
Yes. Good morning, Kenneth. Matthew will take your question.
Yes. I'm happy to unpack that for you, Kenneth. So second quarter was strong. The $1.2 billion in net inflows equates to an annualized growth rate of about 1.6%. Importantly, within that, the revenue yield was up as well, which is counter to industry trends and supports broader fee revenue growth. That shows the quality of those flows. You referenced institutional specifically; that contributed to the $1.2 billion. Within that, we continue to see strength from insurance-related demand backed by both our fixed income and private credit capabilities, which continue to resonate in the marketplace. That is both backward-looking and forward-looking. Overall, demand for our institutional and retail products remains intact. We like our competitive position in fixed income and international markets which we believe are poised for continued growth. That underpins our long-term expectation of 2% plus organic growth.
Great. Very helpful. And one follow-up, if I may. Any color around what you are seeing in terms of plan RFP activity within the retirement business? Thanks.
Yes, Kenneth. Jay will take your question.
Thanks. If you think about RFP volumes themselves, they differ across markets. In our emerging market, you should think mid-single-digit growth, about 6% to 7%. In the mid-market we are seeing double-digit growth and a lot of activity and success. In the large mega segment, results have been very consistent in prior years with low-single-digit growth and that remains very healthy. Overall, we are really pleased with the RFP volumes which are helping drive our commercial momentum.
And I think the broader step back, Kenneth, is that we continue to be very pleased with the commercial momentum in retirement and the overall performance in our largest and highest margin business. Great.
Very helpful there. Thanks again.
Our next question is from Tom Gallagher with Evercore ISI. Please proceed.
Hey, good morning. A few on stop loss. Heather, I know you mentioned the early 26 experience gives you confidence that margins will improve in stop loss. Any quantification that you can share on how we should think about that? And is a third-quarter change to your 2026 loss pick possible? Or is it more likely we need more seasoning and should expect the change in the fourth quarter?
Yes. Good morning, Tom. I will let Mike start on the question.
Hey, Tom. I think a change in the third quarter is remote. The fourth quarter is the more likely opportunity for reserve recognition, because by then we'll be three quarters or two thirds through the year and have a more complete view. We have zero interest in trying to accelerate outcomes. That said, the 2026 business so far is running meaningfully better than what we saw in 2024 and 2025 coming out of August. We are about 15% to 20% complete coming out of the second quarter, and we are still thinking about reserves at the high end of our best estimate ranges. We have been consistent on that. Importantly, the work we did last year — the underwriting leadership and how we quote, review and select risk — along with the rate increases we have achieved, supports our confidence. We got 21% rate coming into 2025, 24% coming into 2026, and we are getting even more rate in pricing for 2027. So we feel really good but we do not want to accelerate any outcomes here, Tom.
Tom, if I can add a little more explicit color on the 2026 book: not only are we seeing better claims experience versus 2024 and 2025 — and again, it's early — we are seeing a lower number of high-severity claims and a lower frequency of claims. That, combined with pricing and reserve levels, is encouraging for 2026.
That is really helpful color. Just a follow-up: the 2024 accident year, which I would have thought had no juice left, actually had favorable development of 2 points between mid-25 to now, and 2025 improved only 1 point versus your reset 90% loss ratio versus Q4 25. Is there something about these claim patterns that is stretching out development longer? Is that a trend? What should we infer?
Tom, we will let Mike hit the technical aspects and Jay will add more on market perspective.
Tom, following your logic, last quarter we discussed a pending reserve cleanup that affected first-quarter reserve releases. The reserve release from the 2025 book in Q1 was about $7 million, with the big balance coming from a pending reserve cleanup in 2024 and 2023. There is not a new normal where it takes over two years for this to season. I see 2025 as about 90% to 95% complete at this point, so it's getting pretty firmed up. We expect a similar pattern for 2026.
Tom, if you step back, since Q1 of 2025 we have made substantive changes to our stop loss leadership team and the operating model. We have seasoned leaders in risk, pricing and underwriting. They have focused on advancing the risk and operating model with a clear focus on margin-over-growth. We are seeing early results in our 2026 book. We are pricing every piece of business to get back to our target loss ratios. Market demand is up over 13% and supply is not keeping pace. More employers are looking for stop loss solutions, and with a hardening market we are confident in achieving the desired rate and persistency targets for 2026. This reflects strong client and intermediary relationships and active dialogue with them. We remain focused on disciplined pricing, risk selection and underwriting as we grow the business.
Thanks. Appreciate your answers.
Our next question is from Joel Hurwitz with Dowling & Partners. Please proceed.
Hey, good morning. I wanted to touch base on the expense actions. How much of the improvement in expenses in your back-half outlook is driven by those? And do you think those are sustainable as we move into 2027?
Hey, good morning, Joel. Mike will take your question.
Joel, as we noted in the prepared remarks, we expect a six-month payback for the severance actions and for the savings to drop to the bottom line. Heather, myself and the team have been focused on self-funding growth investments, and these actions are part of that discipline. In the appendix we provide a sense of how to think about the split between Retirement and Employee Benefits. Looking beyond this year, we view the actions as resetting the baseline heading into 2027. We are entering planning season and the mindset is operating leverage, full stop. We have confidence in cash generation outlook. These expense actions, combined with commercial momentum and margin expansion in Employee Benefits, support expected increases in cash generation in 2026 and again next year.
Got it. That's helpful. Then just shifting to voluntary: can you unpack the experience in the quarter, quantify the unusual items, and where do you expect the loss ratio to go from here? Is it still low 50s or creeping toward mid-50s?
Joel, Miles will speak to the loss ratio and Jay can add color on what we're seeing commercially in voluntary.
Joel, there were a couple of unusual items in the quarter: billing true-ups that shifted from the first quarter into the second and some reserve adjustments through legacy products that are reported in that line because voluntary disability and other products are grouped together. Cutting through that, those items had about a 2.5-point impact in the quarter. A more normalized number for voluntary would be in the 54% range, year-to-date about 53%. That's a reasonable starting point for the second half. Remember we are putting up IBNR with those loss ratios and the fourth quarter is important for voluntary. We expected higher loss ratios because we are pursuing customer value with these products, but we expect to maintain stable net margins, aided by the expense actions taken in the quarter.
Joel, from a commercial perspective, as a top-three voluntary provider our strength sits in distribution and an enhanced service model, which matters in the market. Market demand is up year-over-year across all size segments. Sales are up 7% on a trailing 12-month basis. Persistency over the last 12 months has been extremely solid. So the commercial momentum results are there. Our integrated leave and disability claim solution launched in January is helping broaden our value proposition and improve onboarding and servicing, which supports bundles and retention. Overall the portfolio fundamentals remain strong and we like our market position as we continue to grow voluntary sales.
Our next question is from Ryan Krueger with KBW. Please proceed.
Hey, thanks. Good morning. One question on stop loss. When you put everything together on the trends you are seeing, do you feel like you can get back to your target margins in that business in 2027 at this point?
Yes, Ryan. That is absolutely our plan. As you heard, we have taken pricing actions and tightened underwriting discipline. We are pricing business to hit target margins in 2027. We like what we are seeing in 2026 and our objective is to return the business to its target margins.
Ryan, stepping back: in late 2024 we focused on getting as much rate as possible. In 2025 the teams we put in place allowed us to get more rate while holding premium flat into January 2026 business. This year we are getting even more rate. The market dynamics have allowed us to achieve that. We have confidence heading into the fall as we price January 2027. Every piece of business we priced this year and last year was with the goal of getting back to target margins.
Thanks. And a quick one on recordkeeping fees: they were flat sequentially despite the strong flows. Is that timing-related and should we expect tailwind in the second half?
Jay, Mike will start and then you can add color.
Yes. It's largely timing. The timing of when flows came in and when fees are recognized affected quarter-to-quarter comparisons. We expect healthy fee-based margins in the second half due to the commercial momentum in Q2 and a more constructive macro environment heading into the third quarter.
Ryan, we expected strong commercial momentum in Q2 and we delivered over $8 billion of defined contribution net inflows. Given pipeline visibility, we remain positive on the second half of 26. Trailing 12-month revenue is up 10% and margins remain high. Fee income now represents 60% of operating revenue. We completed the OneAmerica integration in the quarter, which added capabilities and distribution scale and provided additional full-service flows. Our position as a top-five defined contribution provider by participant accounts now exceeds 10 million, reflecting distribution strength and service model enhancements. Overall, we are confident in continued revenue growth.
Our next question is from Jian Huang with Morgan Stanley. Please proceed.
Hey, good morning. I am calling for Bob. Just want to ask about the retirement flows. If we look at the quarter, recordkeeping flows are quite strong and full-service flows are improving from Q1. Is the OneAmerica integration still impacting surrenders? Are you expecting surrenders to trend down in the second half?
Good morning. I will let Jay add color, but there are two primary drivers: you are still seeing the effect of OneAmerica flows which we expect to moderate, and we are seeing impacts from higher participant account balances due to equity markets leading to higher surrenders. Jay, please add more color.
If you think about the industry, there is an equity market effect on full-service flows in Q2; participant surrenders are common in a high equity environment. As Heather said, full-service sales in emerging markets are up 30%. We completed the OneAmerica integration during the quarter, validating our disciplined acquisition strategy and establishing us as a strategic acquirer in the retirement space. The transaction continues to drive benefits: additional capabilities, broader distribution and incremental sales momentum from strategic relationships. Capabilities include ESOP, self-directed accounts and tax-exempt capabilities. We are pleased with the talent, financial results and capabilities driving commercial momentum.
Okay, that sounds good. Second, on the strong pipeline for recordkeeping in the rest of the year, any update on the pipeline since Q1?
I will answer: we have visibility into large plan implementations in the second half. As we discussed in the first-quarter call, we are confident in our ability to deliver positive flows. Retirement is more than a flow story; it's a revenue growth story. We are confident in our largest business's margins and ability to lead the retirement market. Overall, we have a very strong outlook for the year.
Our next question is from Wesley Carmichael with Wells Fargo. Please proceed.
Good morning. Alternatives were a bit of a headwind in the quarter and have bounced around in recent quarters. Can you provide color on how you are thinking about alternative performance in the back half of this year?
Good morning, Wesley. Matthew will take your question.
Wesley, let me unpack that. Second quarter alternative income was a modest loss, about 2.5% annualized, which is a weak result compared to first-quarter return just over 8% and our long-term expectation of 9%. Our alternatives portfolio is focused on buyout private equity. This quarter's result was impacted by lower realizations in the industry and volatility in broader equity markets during the Q1 valuation period, coupled with higher interest rates affecting valuations. Importantly, our diversified private equity holdings continue to be in harvest mode. We plan to moderate the size of the portfolio and focus more on income-oriented and fee-generative opportunities — a path we've been on for years and expect to continue. The strength of the broader market in Q2 and moving into Q3 provides a favorable backdrop, so we expect scope for an improved result next quarter. Long-term, we are not changing the 9% target and expect to outperform that over time, though there will be quarter-to-quarter volatility.
Thanks. One more on expenses: it sounds like you have taken explicit severance actions for savings. Has anything changed fundamentally and what drove the decision to take severance actions now?
Wesley, this is part of our ongoing discipline on expense management. We took operating efficiencies across the business, specifically within Workplace. Earlier in the year Mike and I signaled our plan to self-fund growth investments. We are reallocating expenses to higher-growth areas while managing to targeted unit cost levels and operating efficiency. This is how we operate — disciplined management to fund strategic priorities, not part of a special program.
Sure. Thank you.
Our next question is from Joshua Shanker with Bank of America Securities. Please proceed.
Yes, thank you and good morning everybody. You talked about seeing the fruits of going after price in the stop loss market. Second quarter has not been an important quarter for sales in benefits and many lines have weaker sales than a year ago. Can you go product by product and talk about what is happening in sales on the benefit side?
Joshua, I will let Jay unpack that. We believe margin improvement in Employee Benefits is broader than stop loss. We are improving margins across every line while remaining well positioned for continued growth.
Joshua, the total aggregate loss ratio improved five points to 74% year-over-year, reflecting pricing actions across the portfolio. Voluntary sales are up 7% on a trailing 12-month basis and we are a top-three provider there. In Group Life, historically Q2 is not a big sales quarter; we manage on a full-year basis. Group Life sales are up 5% on a trailing 12-month basis. Brokers and employers are increasingly looking for bundled solutions; our leave administration sits at the center of that bundle. Through Q2, 48% of new life, absence and disability cases were bundled with supplemental health, up from 42% last year. The integrated leave and disability claim solution we launched in January provides an AI-enabled end-to-end workflow improving the employee experience, compliance for employers and strengthens bundling and retention. We look at full-year and trailing 12-month results; the business is growing.
Can we say the business that wrote a year ago is renewing in a different quarter than Q2 this year? Or did some business that you wrote in Q2 last year not meet your pricing appetite this year, explaining part of the decline?
Joshua, are you asking across the broader employee benefit portfolio or a specific product line?
Across the portfolio. We do not have detailed breakouts, but several lines are down. I assume some renewals that were done in Q2 2025 came up for renewal in Q2 2026 or are renewing in different quarters this year.
Joshua, on renewals you can see in in-force premium that reflects some of this. The voluntary line is up and Group Life renewal premiums being down is a contributor to the overall trend. We have been focused on growing margins which will be impactful for cash generation and earnings. Group Life has had several quarters where loss ratios were well below 77% to 80%, so we are adjusting on renewals. Life may be a year or two ahead of stop loss in terms of adjustment post-COVID. Jay and the team are making pricing adjustments to be more competitive where appropriate, which should help results in the fall.
Thanks.
Our next question is from Pablo Singzon with JPMorgan. Please proceed.
Hi, good morning. Questions on Investment Management. Historically institutional flows have been quite good, but retail turned negative the past two quarters. Can you provide perspective on what is going on in retail?
Good morning, Pablo. Matthew will unpack that.
Hi, Pablo. Happy to unpack that. Retail is two different stories by region. In the U.S. we are seeing positive momentum around key products, particularly in fixed income and specialty equities like small-cap growth which has strong demand and good fee rates. The quarter's net flows were dampened by redemption activity overseas. In the first half of the year, market volatility and macro uncertainty in international markets caused higher redemption rates despite strong gross sales. We believe some of that redemption activity will moderate in the second half, and persistent top-line sales should drive an improved outlook for retail.
Got it. Follow-up: historically you laid out a 2% organic growth target. Mike referenced a legacy plan that might run off in the back half. Putting everything together, how comfortable are you hitting 2% and seeing growth accelerate in the second half?
Let me unpack that. The run-off business is sub-advised U.S. business not currently distributed by Voya; it's been in rundown mode. It may create some lumpy inflows and outflows and is an identifiable headwind, but it's not expected to be a meaningful revenue impact in 2026. We have a broad array of strategies performing well and positioned to grow into the second half and beyond. The 2% is a long-term number; last year we were well above it at just shy of 5%. We are still outpacing the industry meaningfully. There will be ebbs and flows. We like the pipeline, the top line, and the revenue yield we are capturing — revenue is up 8% year over year — and that supports double-digit operating income growth.
Our next question is from Suneet Kamath with Jefferies. Please proceed.
Thanks. I wanted to ask about the wealth management business. Heather, you mentioned 10 million accounts. Could you give data on AUM in that strategy and average account size?
Happy to, Suneet. Jay will add color, but the supplement shows about $33 billion of assets within wealth management and year-over-year revenue growth of 12%. Jay, please elaborate.
Suneet, that AUM number is up about 60% year over year. Revenue is up 12%. Employer demand for retail advice and guidance at the workplace has increased, and our position in the workplace lets us capture that. Adviser count is up 20% year-to-date to over 650 advisers, primarily in licensed sales desk advisers, supporting a growing customer base. Adviser productivity is meeting targets, driven by experienced hires, training and tech enhancements that elevate productivity. Wealth management helps retain and deepen relationships with plan sponsors and employees, and we continue to optimize the business for growth.
Thanks. One more: Benefitfocus, you acquired it a couple years ago and there was enthusiasm around it. You do not talk about it much anymore. What's the update post-acquisition? Some peers exited or took charges; any update from you?
Suneet, we continue to see strategic importance in benefits administration across Workplace and Employee Benefits. It has taken longer to reach expected economics within Benefitfocus, but we are stabilizing and moving into the next chapter. Revenues have been stable, roughly $200 million, and we've seen significant improvement in client retention and client satisfaction in onboarding and servicing. We view Benefitfocus as a significant avenue to our Workplace-to-Wealth strategy. Jay, please add.
Benefitfocus remains central to our Workplace business. Employers increasingly ask for integrated solutions, and we leverage Benefitfocus to connect clients to Voya capabilities like wealth management, creating a stronger growth engine across the enterprise. From a pipeline perspective through Q2, Benefitfocus pipeline is up 32% over the prior period, sales are tracking ahead by over 8%, and average sold case size is up 80% year over year. Benefitfocus helps guide employees to effective health and savings decisions, improves financial protection and supports adoption of voluntary benefits. It fits well in our workplace portfolio and we look forward to growing it.
Suneet, you can follow Benefitfocus in the fee-based margin line of the supplement; that line is essentially Benefitfocus and sits at about $227 million over the last 12 months.
Our next question is from Wilma Burdis with Raymond James. Please proceed.
Hey, good morning. How do you see the long-term pricing trend for stop loss? It has been over 20% for the last few years; are you seeing indications it will normalize more toward the high teens?
Wilma, right now the trend is consistent with recent experience, but over time you would expect normalization. We're in a cycle where demand is strong and we're getting more rate. First-dollar inflation trends are expected to remain at elevated levels. The key is demand remains strong — RFPs are up double digits — and this product is valuable to employers. That dynamic has allowed us to obtain rate, and we expect to continue to do so heading into this year's pricing season, which is why we discuss modest premium growth rather than flat premiums.
And it seems there's more industry interest in growing 401(k)s. What do you think is underappreciated about the opportunity in 401(k)s and in your business?
Wilma, one underappreciated factor is our position in the market. We have been growing across segments and maintaining high client retention. Our margins have been consistent and often on the high end, reflecting disciplined expense management. We're increasingly bullish because wealth management allows us to provide financial guidance to workers who otherwise lack access to advisers. Our workplace position and wealth management build-out create a compelling opportunity to serve customers and capture more value over time.
Our final question is from Andrew Kligerman with TD Cowen. Please proceed.
Last question: a nuanced follow-up on flows. Jay, could you talk to full service in Retirement? It sounds like you see flows reversing to positive in the not-too-distant future. Matthew, on Investment Management retail down the last two quarters — do you think you will get to the 2% net flow contribution to assets this year in the back half, or is that more of a longer-term expectation?
Andrew, to summarize what Matthew and Jay said: on the retirement side, we expect positive full-service flows for the full year, though you'll see nuance due to residual OneAmerica outflows and higher participant surrenders from equity markets. We expect those to moderate. For Investment Management, the 2% organic growth rate is a long-term target; this year may be affected by the legacy run-off headwind, but the broader revenue and margin trends are strong. Combined, the two businesses have significant scale — close to $1.2 trillion in assets — and commercial momentum in both Retirement and Investment Management supports our outlook.
Got it. One final topic: following prior headlines about potential offers or interest, has your stance changed regarding considering offers for the company or selling the stop loss business? Any update?
Andrew, a few points. We do not comment on rumors. The board and management will always act in the best long-term interest of shareholders. That includes restoring stop loss margins and executing our organic growth plan. We are delivering shareholder value today through growth in Retirement and Investment Management, wealth management build-out, margin restoration in Employee Benefits, and strong cash generation. We are returning capital via buybacks and dividends while preserving flexibility to invest in the business and pursue retirement roll-ups with a high bar. We have confidence in our strategy and our ability to deliver value for shareholders today and in the future.
We have reached the end of our question and answer session. That will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.