Good morning and welcome to the Voya Financial Second Quarter 2017 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Darin Arita, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Paula, and good morning, everyone. Welcome to Voya Financial’s second quarter 2017 conference call. A slide presentation for this call is available on our Web site at investors.voya.com or via the webcast. Turning to Slide 2. On today’s call, we will be making forward-looking statements. Except with respect to historical information, statements made in this conference call constitute forward-looking statements within the meaning of federal securities laws, including statements relating to trends in the Company’s operations and financial results, and the business and the products of the Company and its subsidiary. Voya Financial’s actual results may differ materially from the results anticipated in the forward-looking statements as a result of risks and uncertainties, including those from time-to-time in Voya Financial’s filings with the U.S. Securities and Exchange Commission. Slide 2 also notes that the call today includes non-GAAP financial measures. In particular, all references on this call to ROE, return on equity; ROC, return on capital; or other measures containing those terms are to ongoing business adjusted operating return on equity or return on capital as applicable, which are each non-GAAP financial measures. An explanation of how we calculate these and other non-GAAP financial measures and reconciliation to the most directly comparable GAAP measures can be found in the press release and quarterly investors supplement available on our Web site at investors.voya.com. Joining me this morning on the call are Rod Martin, Voya Financial’s Chairman and Chief Executive Officer; Alain Karaoglan, Voya Financial’s Chief Operating Officer; and Mike Smith, Voya Financial’s Chief Financial Officer. After their prepared remarks, we will take your questions. Also here with us today to participate in the Q&A session are other senior members of management; Charlie Nelson, Chief Executive Officer of Retirement; Christine Hurtsellers, Chief Executive Officer of Investment Management; and Carolyn Johnson, Chief Executive Officer of Annuities and Individual Life. With that, let’s go to Slide 3 and I will turn the call over to Rod.

Good morning. Let's begin on Slide 4 with our key themes for the second quarter. We achieved significant improvement in our ROE during the quarter, achieving a 14.3% over the trailing 12 months ended June 30. This is the highest level of performance since our IPO in 2013. Just four years ago, we began our journey starting with an ROE of 8.3%. Since then we have made considerable progress. Our improved ROE reflects our focus and commitment to execution and specifically results reflect achievements we have made in growing our business. Improving our capital efficiency and improving margins. We remain focused on executing the remainder of our plans through 2018 to deliver more value to our customers and shareholders. These plans include delivering on our growth objectives and improving our customer experiences and achieving our cost savings targets. The intended outcome is to operate consistently and sustainably at high levels of return. During the quarter we generated strong sales growth and net flows in all of our businesses. Our strong momentum reflects the benefits of the strategic investments which include expanding our distribution, digitizing operations and leveraging our skill sets in new markets. Turning to our balance sheet. Our capital position is strong. We concluded the quarter with $877 million of excess capital after continuing to repurchase shares during the quarter. With respect to our Closed Block Variable Annuity segment, we took further actions to reduce risk and to accelerate the run off of the block. We will be conducting a second GMIB enhanced surrender offer with policyholders receiving mail-ins next week. That offer will conclude in mid-December. Moving to Slide 5. We reported operating earnings per diluted share of $0.67 for the second quarter. This includes $0.39 per share of DAC/VOBA and other intangibles unlocking. The actions resulting from…

Good morning. Let's begin on Slide 7. With the trailing 12-months ended June 30, our return on equity and return on capital increased to 14.3% and 11.7%, respectively. The return on equity for the trailing 12-months also reflects approximately 100 basis points of prepayments and alternative investments income above our long-term expectations. We are pleased with the significant improvement in our return on equity. Our results reflect the execution of our plans, including strong business growth in the second quarter as well as the benefit of our strategic investment program and our cost savings efforts. We are very excited about our positive momentum and are committed to executing on our plans in each of our businesses. On Slide 8, you can see that growth was strong during the second quarter. In retirements, we continue to drive new business growth through our expanded distribution reach, higher productivity, and greater ease of doing business as a result of our investment digital solutions. Our small/mid corporate deposits grew 40% compared with the first half of 2016 and 33% compared with the second quarter of 2016. In tax exempt, deposits while level with the second quarter of 2016, are up 20% compared with the first half of 2016. In investment management, sales grew across all channels, particularly in institutional with several mandates funded during the quarter. We saw continued interest across a diverse range of strategies in both domestic and international markets. In annuities, we generated solid performance. Sales of investment only products are up 18% compared with the first half of 2016 due in part to improved equity markets. As we expected, sales of fixed indexed products are below 2016 levels as firms adapt to the implementation of the Department of Labor fiduciary rule. And we expect this to continue during the second…

Our second quarter results demonstrated strong growth in underlying earnings, rising fee income, favorable net underwriting and realized cost savings, all supported operating earnings growth. Slide 15 is new this quarter and is intended to help investors think about the upcoming third quarter. We intend to update this slide in future quarters. Our second quarter reported operating EPS was $.67 which includes the following two items. First, it included $.39 of DAC/VOBA and other intangibles unlocking. As Alain mentioned, this item is primarily related to changing terms on a portion of our retirement contracts with above market guaranteed minimum interest rate provisions. We view these changes positively from an economic standpoint because we will have greater flexibility to adjust crediting rates in line with the evolving portfolio yields. However, GAAP accounting rules require us to accelerate the amortization of DAC and VOBA on contracts that have been modified. We aim to mostly complete this important initiative by the end of 2017. There is approximately $220 million of DAC/VOBA remaining on the targeted assets of which a portion could be subject to further accelerated amortization. Second, combined prepayment and alternative income was above long-term expectations. This outperformance was driven mostly by a $28 million pre-tax recovery of carried interest in one of our private equity funds. This carried interest was previously reversed during the first half of 2016. Looking ahead to third quarter 2017, we expect our earnings per share to be helped by additional cost savings in our ongoing business and a reduction of operating losses from institutional spread products. The impact of those beneficial items could be offset should certain items revert to normalized levels. For example, we may see fewer favorable expense items for the third quarter. A breakout of these items by business segments is shown on…

[Operator Instructions] Your first question comes from Ryan Krueger of KBW.

I had a question about the retirement guaranty interest rate action. Can you help us think about the, any impact to future that would occur as a result of this? I assume it will both help future [crediting out] [ph] but it will also -- can you give any sense if it will also reduce DAC amortization going forward as well?

Yes, Ryan. Charlie will take that.

Good morning, Ryan. Certainly we are on this journey relative to our GMIR and, yes, you can expect that there will be a net amortization on a pretax benefit basis of about $10 million to $15 million annually. That’s from this tranche that we have dealt with through June 30. And as you indicated, there will be benefits from a crediting rate perspective but that will evolve over time and really not start to be noticeable I think until early 2018 and maybe later this year as well. There is about a 90 day notice period for participants to -- when we make these types of changes at a plan level. So there is a bit of a lag in terms of when that crediting interest component can kick in. But it really does, I think, and we are really pleased with the progress that our team has made on the GMIR initiative as we look broadly across our business. But our value proposition has been and is much broader than just our GMIR. And certainly the value proposition I think is resonating in the market and is driving some strong growth in deposits and flows as well. Certainly there was a little lumpiness this quarter in some of our stable value flows. If you look at our stable value flows, about 70% were -- on the negative side were driven by participant direction. And that happens from quarter to quarter with reallocation of participant accounts. But as Alain mentioned, on our tax exempt business, with deposits up 20% in the first half versus 2016, we are really pleased with the progress there, and as well as in our small/mid corporate business. The kind of 23 out of 24 quarters in a row of positive deposits and positive flows. It…

Great. Thanks a lot Charlie. And then just, I guess a quick follow up. So $10 million to $15 million of lower DAC amortization from what you have done so far. How should we think about the relative size of what you are looking to do in the second half of this year and should we expect a similar amount of benefit for DAC amortization, I guess, relative to that, whatever the sizing is.

Ryan, this is Mike. So I think, as I said, the total DAC that remains on the targeted accounts is $220 million. Some portion of that will -- depending on the success of the ultimate initiative, will get the same kind of treatment as we had last -- in this quarter. And then that would have a probably similar proportionate impact on ongoing amortization so I think to be determined as to the exact amount depending on how the initiative ultimately unfolds.

Your next question comes from Humphrey Lee of Dowling & Partners.

Just a question on the Stop Loss. So you mentioned that there is the high reserves -- you have prior year developments for 2016 and looking higher reserves for 2017. So is this a pricing issue for kind of the more recent sales, especially given the strong sales in the first quarter and second quarter. And kind of maybe remind us what is the re-pricing cycle for these businesses.

Sure, Humphrey, this is Mike. I think the way to think about this is that the Stop Loss really runs on a two year cycle. And most of the business has an effective date of January 1, they are annual contracts. But we don’t have a really good sense of how the block is going to unfold until actually 13th month, 14th month, 15 is when we really start to understand. So we don’t know how the experience is actually going to emerge until after the end of the period that they are covered. The reason that translates into a two-year cycle is that somewhere in month seven or eight, we are beginning the renewal process. Just as we are doing right now on the business that we renewed in January '17. So by the time we have experience on the business that we wrote before, we are already renewed into the second renewal cycle. So here is the way this has played out for us in '16 and '17. We wrote business coming off of a really good experience in '15 and '14. Felt good about the pricing and good about the underwriting and as the experience emerged, it turned out to be higher than we expected. And so that’s resulting in some of the loss ratio experience that we reported in the last several quarters. We started the renewal cycle for January '17 business in August or September before we had a sense of where the business of the block was ultimately going to unfold. At that time actually it was looking pretty good. So now, we fast forward to where we are today, which is August of 2017, we are going to be renewing the '17 business starting now. We have the benefit of that experience both in terms of the '16 business and emerging '17 business. And I think we will be able to take appropriate pricing actions through this renewal cycle to get back on track and more consistent with our overall target of 77% to 80%.

Got it. Thank you for the color. And then a question about the Cognizant outsourcing transaction. So how should we think about the cost savings from that outsourcing agreement, given you are paying $400 million of payments over a five-year period. I would assume the benefit would definitely outweigh that payments consideration. But just think about in terms of how those kind of costs savings would emerge?

Thank you for the question. So just let's get back and just putting this agreement in perspective. When we announced our plans in 2015 and our strategic investment program, there were three areas that we were focusing on. IT simplification, digital and analytics and cross-enterprise initiatives. And this agreement here is part of our continuing drive to simplify our IT infrastructure and delivery. And when we announced our simplicity cost savings in November of last year of more than $100 million by 2018, we had contemplated such an agreement in those plans. And ultimately, this is going to help us to continue to deliver the highest level of service to our customers, to continue to grow our business while minimizing our cost. The $400 million is paid over 5 years and the way to think about it is we spent around $1.7 billion of dollars of administrative expenses and instead of spending it the way we are spending it before we are going to pay it Cognizant as a service fee, and they will be servicing -- and our expectation is we will get meaningful improvement in service, in cost savings, that’s already reflected in our more than $100 million that we expect to achieve in 2018.

Your next question comes from Erik Bass of Autonomous Research.

One follow-up on the retirement guaranteed minimum income rate changes. Were those contemplated or something similar in your 2018 ROC guidance for the retirement business.

Yes.

Okay. And then I know you probably don't intend to update the 2018 allocated capital target quarterly but we did see the allocated capital for the business decline again this quarter and given the DAC write-offs you mentioned from the spread initiative, some of the restructuring charges and just ongoing capital return. Struggling to see why the numbers should grow materially going forward. Are there other factors we should be thinking about there?

Thanks, Erik. First of all, just to be very clear, we are still very confident in our current guidance of high seven to low eights in terms of the overall capital level at the end of '18. I think that will be driven by business growth primarily. And ultimately evolve over time as we move forward. I wouldn’t get distracted by kind of one time DAC adjustments. I think the overall picture here is one of improving our overall returns through a variety of ways. One of which is growth and that will be a primary contributor to the GAAP results.

Thank you. And just one more for Charlie on the guaranteed minimum income rate adjustments. What is the incentive for the plan sponsors to agree to these?

Thank you. You know plan sponsors, and I think their advisors that advise them as well, as fiduciary certainly understands that the fixed investment option or fixed general account on average is probably about 15% of plan assets, total plan assets. And so while it's important to take that into consideration, they look at each thing in totality of their overall plan. So each component of that. So when we are in a prolonged period of low interest rate, certainly plan sponsors' advisors are aware of this and the impact that it has on potentially crediting rates and the portfolio rates. And plan sponsors have increasingly become focused at trying to preserve the guarantees on the existing assets while providing a competitive rate of return for deposits and transfers. So if a plan sponsor were to leave us, the market rate for a GMIR if you went to a new provider today is not 3% and 4%, obviously. It's probably down in the 1% range. So they recognize this and so when presented with options preserving the existing assets at the above market GMIR levels and offering participants a competitive current crediting rate. Many are taking advantage of the offer. And I think it's the main driver for this in maintaining existing assets, maintaining of the existing assets above the above market GMIR rate and it's not a fee concession issue.

Your next question comes from Seth Weiss of Bank of America Merrill Lynch.

A couple on retirement. The first is just more of a modeling type question. But in response to the question from Ryan Krueger on $10 million to $15 million of net DAC. Just so directionally we have this. This is a benefit or a headwind to earnings as we think about ongoing quarters.

It's a benefit, Seth. The amortization -- we accelerated the amortization, we won't have to take it in the future. So the amortization will go down $10 million to $15 million.

Okay. Great. And that’s a quarterly number or an annual number?

That’s an annual number.

That’s an annual number. And then a broader question just on retirement as we look at the earnings run rate in this quarter. Even if you adjust out the expense benefits which you highlighted on your Slide deck, earnings this quarter running still over $140 million, so it's significant higher than where you have been running in previous quarters. So I know the market played a role this quarter but we have had quarters recently with even better market growth. So just trying to get a sense of what's driving earnings higher and if this is a good run rate to think about going forward.

Seth, we are very pleased with the progress and I think very encouraged in what our team is doing in retirement. I am very very excited about the progress that we have made. As you point out, the equity markets, they certainly have helped. But the proactive management that we have to manage the spread compression relative to our GMIR initiative as an example of execution of some of our growth margin and capital initiatives. Certainly the expense management that I referred to earlier. I mean you look at the growth that we have had in our business both at plans and participants and our admin fees going down 4% on a year-to-date basis versus last year, I think shows some of the expense management discipline that we are bringing and the simplification to our business. And then you throw on there as well, which I think gives us encouragement for the future as well, is the continued growth that we have. And it's not just in our small [net] [ph], our tax exempt is doing quite well. Our large corporate business in the last 24 months has had $19 billion in sales and almost 200,000 participants. And our retail wealth management business is really starting to pick up as well and we have seen our field advisor productivity improve on a revenue basis about 20%. So if you look at this in total, I think it's simplifying, our value proposition is resonating in the market and we are quite pleased with the results.

And, Seth, it's Alain. Just to add a couple of thoughts on that. It's really the culmination of all the execution that we have been doing over the past couple of years. So when you sell and grow originally, the impact of the sale on earnings is not significant. The accumulation of sales becomes significant. On the saving, the same things. We are coming through. We are going to -- by the end of next year we would have achieved our more than $100 million of savings. That will come through the results but they weren't necessarily coming through before that. So with the accumulation of sales every quarter of our cost savings and our unit cost are down at 10%, as Charlie says, as a combination of that. And that’s going to continue and you start to see it through the results in all of our segments. And in particular in retirement which was the one because of the interest rate environment that was more under pressure.

Your next question comes from Suneet Kamath of Citi.

Just wanted to go the CBVA first. It seems like net amount at risk to the current value is getting more attention given certain transactions in the market. I was wondering if you can update your in terms of when your rollups on your various contracts sort of hit their peaks and sort of net amount at risk starts to level off?

Sure. Suneet. So the answer is a stratified one, depending on which block we are talking about. So the GMWB is largely at their peak over the next couple of years and a few of some of them have already. And then the GMIB is also, they are two different cohorts to think about, some of which they have already hit. I think the larger share will start to hit their peaks in 2019 and then that will run through 2022.

Got it. And then just in terms of the CBVA, has there been any sort of change in tone or interest level from third parties in terms of a permanent solution. Particularly given some of the transactions in the market.

Suneet, it's Rod. Certainly the point you are referencing, there is increased activity in the market and there has been for a period of time. You should conclude that we are as engaged as any other partner during that period. And I doubt you will be surprised that we are not going to forecast something on the call with advance of our concluding a solution different than the plan that we have today. But we are actively engaged, we are watching carefully the activity that’s happening in the market and we will keep you and all parties posted if we feel there is a better or different solution than the one that we are executing against now.

Got it. And then just one last follow-up, if I could, just on the retirement business and the $10 to $15 million lower DAC amortization. Are there any other offsets to that, lower fees or anything else that we need to think about as we model the impact of what you have done in 2Q and then what you may do in the second half.

So as I indicated earlier, the plan sponsors are taking advantage of our GMI offers and are exchanging their contracts, not of a [e-concession] [ph]. So that’s unrelated here. Certainly we have ongoing management of our book of business, we continually look at our book of business and manage on a pricing basis, on a pro-active basis. But that’s connected to what we are doing with the GMIR and we will continue to do that as we go forward. So nothing related to GMIR.

So I would add to what Charlie has already said, I think he has covered an awful lot. The increased engagement with our customers as a result of this activity has been a very good outcome for us and our customers in terms of the breadth of portfolio and value proposition that we have. So outside of just the discipline of the approach on this project, it's been a very good outcome in terms of just reengaging with the customers and having them have a very current picture of the progress we have made and the breadth of the value proposition. Both in retirement and in investment management solutions as part of that retirement picture.

Your next question comes from John Nadel of Credit Suisse.

I was hoping you could give us a sense for what the offer is going to look like for this next enhanced surrender program. Will it look very similar to the offer that was provided a couple of quarters ago to a relatively small block of your GMIB customers and in particular also is this offer going to be made to the entire block.

John, this is Mike. Thanks for the question. So let's go back to what the original offer was. It went to half of the GMIB block. We got 25% take up rate out of that offered portion. This next offer will go to the entire GMIB block. So half of the offer is going to people who have not received it before. The other half is a repeat offer. For both the terms of the offer are identical financially. It's 55% of the difference between their benefit base and their account value, is added to their account value and that becomes their enhanced surrender value. One lesson we learned from the past offer was that we had only a 60 day window before and we ran into challenges, as much as anything with some of the agents being able to work through their block and reach all the customers who have been given these offers. And so we have extended the offer period. As we mention, they will now have until mid-December, so it's 120 window as opposed to a 60-day window. In terms of expectations, I think it's hard to say. All of these are learning experiences for us. I think it's safe to say that we will not see the same take up rate on the half that’s already gotten the offer. Working the other way, as a longer offer period may make it easier and may facilitate more folks to take it. But we are also approaching a group with a different benefit picture a different benefit base relationship to their account value and that will impact it as well. So we are certainly encouraged by the results of the prior offer and we are optimistic that we will see good take up of the this new one.

And then just as a follow up to that, Mike. And I realize this is all very hypothetical. But if you received an overall take up rate that looks something similar to the past offer, 20% to 25%, something in that neighborhood. It's a pretty significant reduction in the size of your GMIB in force. Is there -- would we see in all likelihood in response to that or I guess after that a reduction in hedge costs and maybe even perhaps a reduction in the CTE95 requirement for the block.

So the short answer to that is, yes, there would be reduction in both. Simply by having a smaller block, and these are policies that generally contribute to hedge cost and contribute to having a hold to CTE95 requirement. Making that smaller should ultimately reduce it but I should add that we have to pay for the incentive that we are giving to these customers, right. So in the short-term there is not -- just to anticipate where you maybe going -- there is not a capital release that comes from this in the short-term. Over the long-run, the good thing, we are happy about it. It will make the picture for the block overall better and certainly reduces the potential volatility.

Your next question comes from Jimmy Bhullar of J.P. Morgan.

I had a question just on the variable annuity block. As you are thinking about the CTE95 required, assuming a stable size of the block so ignoring those enhancement or value options that you are contemplating, are you expecting a big increase in the required CTE95 reserves as the GMIB is aging or is there no such dynamic in the book.

So the CTE95 calculation already contemplates that. So there will be some, all else being equal, as that potential benefit gets closer and nothing else changes then the value of that would simply increase just by virtue of a time value of money effect. The potential claim is now that much closer. So there would be some sort of normal progression but overall that peak is not something that’s going to drive a surprise in 2019 or 2020. That’s all part of the modeling and we are very comfortable with how that should play out.

Okay. And just a follow up on your Stop Loss. It seems like you are implying that margins should improve next year as your are contemplating price hikes on the block. Are you -- just maybe comment a little bit on market conditions as you are looking at renewal cycle and do you expect any increases in pricing to drive a noticeable reduction in your premiums in that business.

Yes. Jimmy, it's Alain. Yes, we do expect an improvement in our 2018 loss ratio. From a market point of view, it is competitive. You have a couple of new players that are coming in. The results as you recall have been terrific with return on capital in the high 20s and as we sit today with our loss ratio being higher than expected, we are at 20.8%. And we have done that and the business has grown. So it wasn’t just the returns were high. In the past few years, the business has grown significantly. That has attracted some additional competition in the market. You saw the market is more competitive. As Mike has said, we look at our book of business, we look at where we are, we look at our target and we focus on driving renewal and a disciplined basis to achieve our targeted loss ratios and targeted returns and we expect to be able to do that and achieve that in 2018.

Your next question comes from Tom Gallagher of Evercore ISI.

My first question I have is just on your comment on expense saves. You mentioned realized total expense saves of $30 million. Is that an annualized number or is that a year to date number?

That’s a program to date number which start late '16.

So annualized, you would now be up to $60 million or so relative to the $100 million annualized level that you will get up to by next year. Is that the right way to think about it?

Tom, I would point you back to our overall guidance of $50 million to $60 million of saves in 2017 and more than $100 million in 2018. It's not meant to be an annualizable number though. The way to think about our expense saves is they are going to gradually build, right. And so as we mentioned, there will be additional run rate savings taken in the third quarter of about $3 million to $5 million and when you annualize that, that’s an additional $12 million to $20 million. It's multiplying by four. So that will add and so you will see this gradual buildup as we take the actions that will remove the cost.

I guess I just want to make sure I am clear. How much annualized savings as you think about eventually get into the $100 million plus build for next year, where do we stand? Are we at $60 million now or should I be thinking about it as $30 million. I just want to understand where we are going to versus where we are thus far?

So I think the way to think about it in terms of modeling is the $3 million to $5 million of run rate would be a reduction in the quarterly expense that you should expect to see, right. So that’s part one. The overall savings that you would achieve in 2017 should be in that $50 million to $60 range. And that’s not an annualized number, that’s an actual number. That’s the savings that we will have brought to the bottom line in 2017.

Got you. And then -- so right now, you are on track to get to the $50 million to $60 million, bottom line that you expect to get. But if we then annualize -- so if we annualize it by 4Q, you will be further along than the $50 million to $60 million, is the way we think about it.

Right. If you look at the saves that we have in the fourth quarter accumulated and then you multiply that by four, yes, you will be on a different path than 50 to 60. That’s right.

And just so I am clear on this. Then by next year, the way to think about it is, since you will be 50 to 60 total higher annualized number, let's' call it maybe you are at $70 million to $80 million. Would that only apply an extra $20 million for 2018 to get to your goal? Am I thinking about that correctly or it will be something larger than that.

Well, I guess, I would say first it’s a $100 million or more, so it's possible that it could be more. But if it's just $100 million, then I think your math is basically in the ballpark but that’s not necessarily guidance or direction we are trying to give on the path. Of your example, I think you are thinking about the math correct.

Got you. And then, just one other question on CBVA. The $250 reduction in cash flow testing reserves. Should we read anything into that? That to me, if you are able to release some reserves here, that certainly expresses some more confidence to the resources back in the block I would guess. But is there anything to read into that in terms of where you think the new variable annuity reserving standards are going, the whole [indiscernible] initial proposal. Or otherwise as you think about how that business is capitalized and where you think it ultimately needs to be and then potentially down the road freeing it up.

Tom, thanks for that question. I will make sure to clarify how to think about this. There is no change in the resources, either up or down, that support the CBVA as a result of this. The way to think about it is, we have got two entities that are engaged in the variable annuity business largely. There is the domestic Iowa company and then there is Arizona based captive. The original writing company is Iowa, that’s where the cash flow testing reserves were held. They were thus excluded from excess capital. We worked with the Iowa regulator to explain to them that what we needed to do is move resources from Iowa to Arizona and so we used the mechanism of reducing the cash flow testing reserves. They granted us an extraordinary dividend for that exact amount. We took that up for the holding company, took it back down to the captive. So the resources within the CBVA system were unchanged, the statutory reserves are lower and that’s a good thing but it's more about balancing the resources between the entities then it is about any view on anything else. We will probably, depending on how things evolve, we will probably do something similar to this at some point in the future. The reinsurance agreement between the Iowa company and the captive requires periodic rebalancing of resources.

This concludes our question-and-answer session. I would like to turn the conference call back over to Rod Martin for any closing remarks.

Thank you. We have made considerable progress during the second quarter towards achieving our 2018 financial targets. We remain focused on continuing to execute our plans. This will enable us to deliver greater value to our shareholders. It will also put us in an even stronger position to help Americans plan, invest and protect their savings. We look forward to updating you with our progress. Thank you and good day.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.