Voya Expects More Than $800 Million in Excess Capital in 2026, Raises Buyback Authorization
Key Facts
Voya Financial expects to generate more than $800 million in excess capital during 2026, saying the outlook comes despite incurring about $70 million in severance costs since the start of the year. Alongside its third-quarter results, the company announced a $500 million increase in its share repurchase authorization, in addition to about $163 million of remaining capacity on September 30. It also raised its quarterly cash dividend 21% to $0.57 per share, starting in the fourth quarter. The moves link management’s capital-generation outlook with continued returns to shareholders. But the $800 million remains a full-year forecast, not an amount already generated.
The CFO said the company generated about $575 million in excess capital through the end of the third quarter and returned most of it to shareholders, ending September with about $250 million. Excess capital generation in the quarter alone was $225 million, equivalent to 95% of adjusted operating earnings after tax. Voya returned about $150 million during the quarter through dividends and share repurchases. The company bought $100 million of shares in the third quarter, bringing purchases since the start of the year to $400 million. It expects to repurchase an additional $150 million of shares in the fourth quarter.
Net income available to common shareholders was $193 million, or $2.09 per diluted share, in the third quarter of 2026, compared with $176 million and $1.80 per share in the corresponding period of 2025. Adjusted operating earnings after tax were $240 million, or $2.60 per share, versus $239 million and $2.45 per share a year earlier. The company said higher earnings in the retirement and employee benefits segments were largely offset by lower venture capital income in investment management. It also cited pretax severance costs of $25 million during the quarter as an offsetting factor. Adjusted earnings per share therefore rose, while growth in total adjusted earnings remained limited year over year.
In retirement, client assets rose to $878 billion on September 30, up 12% from $785 billion a year earlier, and the number of participants reached 10.3 million. The segment’s pretax adjusted operating earnings were $266 million, compared with $261 million in the third quarter of 2025, while its net revenue increased 6% in the 12 months ended September 30. The segment recorded nearly $14 billion in net inflows in defined contribution retirement plan contributions during the quarter, driven by the implementation of a large plan; management said it does not expect a similar contribution in the fourth quarter. Fee-based revenue also increased 12% over the 12 months, accounting for more than 60% of segment revenue. Chief Executive Heather Lavallee said commercial momentum in retirement and investment management, improved margins in employee benefits, and expense discipline support operating performance.
In investment management, Voya recorded $1.4 billion in net flows during the quarter, excluding businesses that were exited and a sub-advisory transition. But assets under management were $363 billion on September 30, compared with $366 billion on the same date a year earlier; the company attributed the decline mainly to exits and the sub-advisory transition. In employee benefits, pretax adjusted operating earnings rose to $51 million from $47 million a year earlier. The gross loss ratio also improved to 74% in the 12 months ended September 30, from 78% in the corresponding period. These indicators place segment performance against the backdrop of the company’s capital outlook, with results varying across flows, assets and earnings.
In after-hours trading on November 3, Voya shares rose 4.86% to $104.26, approaching their 52-week high of $105.64. The company said its quarterly Form 10-Q for the period ended September 30 will be filed with the U.S. Securities and Exchange Commission no later than November 9, 2026. On the call, management said it expects free cash flow conversion of 90% or more, a level that matches its stated target. It also expects adjusted operating return on equity to improve in the fourth quarter. This guidance accompanies the buyback plan and higher dividend, while the 2026 excess capital forecast remains under watch through year-end.