Our ongoing business operates in highly competitive markets. We face a variety
of large and small industry participants, including diversified financial
institutions, investment managers and insurance companies. These companies
compete in one form or another for the growing pool of retirement assets driven
by a number of exogenous factors such as the continued aging of the U.S.
population and the reduction in safety nets provided by governments and
corporations. In many segments, product differentiation is difficult as product
development and life cycles have shortened. In addition, we have experienced
pressure on fees as product unbundling and lower cost alternatives have emerged.
As a result, scale and the ability to provide value-added services and build
long-term relationships are important factors to compete effectively. We
believe that our leading presence in the retirement market and resulting
relationships with millions of participants, diverse range of capabilities
(as a provider of retirement, investment management and insurance products and
services) and broad distribution network uniquely position us to effectively
serve consumers’ increasing demand for retirement savings, income and
protection solutions.
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Our Institutional Retirement Plans business competes with other large, well-
established insurance companies, asset managers, record keepers and diversified
financial institutions. Competition varies in all market segments as very few
institutions are able to compete across all markets as we do. The following
chart presents the current competitive landscape in the markets where we offer
our Institutional Retirement Plans and stable value products:
Market Segment Competitive Landscape Select Competitors
Small-Mid Corporate Dominated by insurance based providers, John Hancock
primarily with third-party administration Principal
relationships
K-12 Education Dominated by a small number of insurance AXA
based providers VALIC
Higher Education 403(b) providers, asset managers and some TIAA-CREF
insurance-based providers Fidelity
Healthcare /Other Non-Profits 403(b) providers, asset managers and some TIAA-CREF
insurance-based providers Fidelity
Government Primarily insurance-based providers but Nationwide
also asset managers and 457 providers Great West
Recordkeeping Asset managers, business consulting Fidelity
services, payroll firms and insurance AON Hewitt
based providers
Product Offering Competitive Landscape Select Competitors
Stable Value Insurance companies and banks Prudential MetLife
Our full-service Institutional Retirement Plans business competes primarily
based on pricing, the breadth of our service and investment offerings,
technical/regulatory expertise, industry experience, local enrollment and
financial planning support, investment performance and our ability to offer
industry tailored product features to meet the retirement income needs of our
clients. Regarding the large plan recordkeeping only business, we have seen
consolidation among industry providers in recent years seeking to increase
scale, improve cost efficiencies and enter new market segments. However, the
market remains competitive with few dominant players. As a result, we emphasize
our strong sponsor relationships, flexible value-added services, technical and
regulatory expertise, and participant retirement readiness suite of products
and services to compete in this segment of the institutional market. Finally,
we have seen new insurance company competitors enter the stable value space
because demand from participant and plan sponsors remains strong for these
products. Our long standing experience in the retirement market underscored by
strong stable value expertise allows us to effectively compete against existing
and new providers.
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Our Individual Markets advisory services and product solutions compete for
rollover and other asset consolidation opportunities against asset managers,
banks, wirehouses and other broker-dealers who also offer individual retirement
products, all of which currently have more market share than insurance based
providers in this space. Primary competitors to our Individual Markets business
are Fidelity, Vanguard, Morgan Stanley Smith Barney, Bank of America Merrill
Lynch, TIAA-CREF and Ameriprise.
Our Individual Markets advisory services and product solutions compete based on
our consultative approach, simplicity of design and a fund and investment
selection process that includes proprietary and non-proprietary investment
options. The advisory services and product solutions are primarily targeted
towards existing participants, which allows us to benefit from our extensive
relationships with large corporate and tax-exempt plan sponsors, our small and
mid corporate market plan sponsors and other qualified plan segments in
healthcare, higher education and K-12 education.
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Our Annuities segment faces competition from traditional insurance carriers, as
well as banks, mutual fund companies and other investment managers such as
Allianz, Aviva, American Equity, AXA, Lincoln and Great American. Principal
competitive factors for fixed annuities are initial crediting rates, reputation
for renewal crediting action, product features, brand recognition, customer
service, cost, distribution capabilities and financial strength ratings of the
provider. Competition may affect, among other matters, both business growth and
the pricing of our products and services.
Mutual fund custodial products compete with brokerage accounts and other
financial service and asset allocation offerings.
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Investment Management competes with a wide array of asset managers and
institutions in the highly fragmented U.S. investment management industry. In
our key market segments, Investment Management competes on, among other things,
the basis of investment performance, investment philosophy and process, product
features and structure and client service. Our principal competitors in the
Investment Management business include insurance-owned asset managers such as
Principal Global Investors (Principal Financial Group), Prudential and
Ameriprise, bank-owned asset managers such as J.P. Morgan Asset Management, as
well as “pure-play” asset managers including PIMCO, Invesco, Wellington, Legg
Mason, T. Rowe Price, Franklin Templeton and Fidelity.
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The Individual Life segment competes with large, well-established life
insurance companies in a mature market, where price and service are key drivers.
Primary competitors include Lincoln, MetLife, Prudential, American General,
Principal Financial Group, John Hancock, Transamerica and Pacific Life.
Individual Life primarily competes based on service and distribution channel
relationships, price, brand recognition, financial strength ratings of our
insurance subsidiaries and financial stability. We have strong capabilities to
monitor competition and we utilize advanced models to benchmark our product
offerings against others in the industry.
Factors that could influence our ability to competitively price products while
achieving targeted returns include the cost and availability of statutory
reserve financing required for certain term and universal life insurance
policies, internal capital funding requirements and an extended low interest
rate environment.
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The group insurance market is mature and, due to the large number of
participants in this segment, price and service are key competitive drivers.
Our principal competitors include MetLife, Prudential and Minnesota Life in
Group Life, Houston Casualty, Symetra and Sun Life in Stop Loss, and Unum,
Allstate and Transamerica in VB.
For group life insurance products, rate guarantees have become the industry
norm, with rate guarantee duration periods trending upward in general.
Technology is also a competitive driver, as employers and employees expect
technology solutions to streamline their administrative costs.
December 31, 2012) are focused on executing our mission to make a secure
financial future possible—one person, one family and one institution at a time.
Through our retirement, investment management and insurance businesses, we help
our customers save, grow, protect and enjoy their wealth to and through
retirement. We offer our products and services through a broad group of
financial intermediaries, independent producers, affiliated advisors and
dedicated sales specialists throughout the United States.
Our extensive scale and breadth of product offerings are designed to help
Americans achieve their retirement savings, investment income and protection
goals. Our strategy is centered on preparing customers for “Retirement
Readiness”—being emotionally and economically secure and ready for their
retirement. We believe that the rapid aging of the U.S. population, weakening
of traditional social safety nets, shifting of responsibility for retirement
planning from institutions to individuals and growth in total retirement
account assets will drive significant demand for our products and services
going forward. We believe that we are well positioned to deliver on this
Retirement Readiness need.
We believe that we help our customers achieve four essential financial goals,
as they prepare for, enter and enjoy their retirement years.
. Save . Our products enable our customers to save for retirement by
establishing investment accounts through their employers or individually.
. Grow . We provide advisory programs, Individual Retirement Accounts (“IRAs”),
fixed annuities, brokerage accounts, mutual funds and accumulation insurance
products to help our customers achieve their financial objectives.
. Protect . Our specialized retirement and insurance products, such as
universal life (“UL”), indexed universal life (“IUL”), term life and stable
value products, allow our customers to protect against unforeseen life events
and mitigate market risk.
. Enjoy . Our income products such as target date funds, guaranteed income
funds, fixed annuities, IRAs, mutual funds and accumulation insurance
products enable our customers to meet income needs through retirement and
achieve wealth transfer objectives.
We tailor our products to meet the unique needs of our individual and
institutional customers. Our individual businesses are primarily focused on the
middle and mass affluent markets; however we serve customers across the full
income spectrum, especially in our Institutional Retirement Plans business,
Retail and Alternative Fund businesses, and Employee Benefits segment.
Similarly, our institutional businesses serve a broad range of customers, with
customized offerings to the small-mid, large and mega market segments.
We believe that with our leading market positions, investment expertise, and
distribution reach we are well positioned to generate attractive risk-adjusted
returns and earnings growth for our shareholders over time.
We operate our principal businesses through three business lines: Retirement
Solutions, Investment Management and Insurance Solutions. We refer to these
business lines as our “ongoing business.” In addition, we also have Closed
Blocks and Corporate reporting segments. Closed Blocks consists of three
businesses where we have placed our portfolios in run-off—Closed Block Variable
Annuity, Closed Block Institutional Spread Products and Closed Block Other. Our
Corporate segment includes our corporate activities and corporate-level assets
and financial obligations.
The following presents the key products we offer across each of our businesses.
Retirement Solutions . We are a leading provider of retirement services and
products in the United States, with approximately $116.6 billion in assets
under management (“AUM”) and $213.7 billion of assets under administration
(“AUA”) as of December 31, 2012. We provide an extensive product range
addressing both the accumulation and income distribution needs of customers,
through a broad distribution footprint of nearly 2,400 affiliated
representatives and thousands of non-affiliated agents and third party
administrators (“TPAs”) as of December 31, 2012. Our Retirement Solutions
business comprises two financial reporting segments: Retirement and Annuities.
. Retirement provides tax-deferred, employer-sponsored retirement savings plans
and administrative services to nearly 48,000 plan sponsors covering more than
5 million plan participants in corporate, education, healthcare and
government markets as of December 31, 2012. Retirement also provides rollover
IRAs, and other retail financial products as well as comprehensive financial
advisory services to individual customers. We serve a broad spectrum of
employers ranging from small companies to the very largest of corporations
and government entities. As of the latest Pensions and Investments survey
published in March 2013, we rank second in the U.S. defined contribution plan
market by number of record kept plan sponsors, third by number of plan
participants served, and fifth by assets under management and administration
at September 30, 2012. Retirement had $304.1 billion of AUM and AUA at
December 31, 2012, of which $80.2 billion was full service business, $221.5
billion was recordkeeping and stable value business and $2.4 billion was
Individual Markets business.
. Annuities provides fixed and indexed annuities, tax-qualified mutual fund
custodial products and payout annuities for pre-retirement wealth
accumulation and post-retirement income management sold through multiple
channels, and had $26.1 billion of AUM at December 31, 2012.
Investment Management. We are a prominent full-service asset manager with
$181.8 billion of AUM and $54.7 billion of AUA as of December 31, 2012,
delivering client-oriented investment solutions and advisory services. We serve
both individual and institutional customers, offering them domestic and
international fixed income, equity, multi-asset and alternative investment
products and solutions across a range of geographies, investment styles and
capitalization spectrums.
. As of December 31, 2012, we managed $101.3 billion in our commercial business
(comprised of $60.7 billion for third-party institutions and individual
investors, and $40.6 billion in separate account assets for our Retirement
Solutions, Insurance Solutions and Closed Block businesses) and $80.4 billion
in general account assets. We are particularly focused on growing our
commercial business, in which we achieved 11.3% organic AUM growth in 2012.
. We have a highly scalable business model and are among the twenty largest
managers of institutional tax-exempt assets in the U.S. and ranked number one
among defined contribution investment managers in client loyalty and
favorability in 2011.
. As of December 31, 2012, our retail mutual fund portfolio assets totaled
$22.0 billion. On a five-year asset-weighted basis, 77% of our mutual funds
beat their Morningstar category average and 85% had lower volatility than
their Morningstar competitor average as of December 31, 2012.
Insurance Solutions . We are one of the top providers of life insurance in the
United States. In our focus individual products, term and universal life, we
currently rank fifth and seventeenth, respectively, based on premiums sold as
of December 31, 2012. We are also the fifth ranked provider of medical stop
loss coverage in the United States based on in-force premiums as of September
30, 2012. Our Insurance Solutions business comprises two financial reporting
segments: Individual Life and Employee Benefits.
. Individual Life provides wealth protection and transfer opportunities through
universal, variable, and term products, distributed through independent
channels meet the needs of a broad range of customers from the middle-market
through affluent market segments. As of December 31, 2012, the Individual Life
distribution model is supported by independent life sales agents (over 2,200
independent general agents with access to over 93,000 producers), strategic
distribution (over 30 independent managing directors supporting approximately
6,900 additional producers) and specialty markets (approximately 75 general
agents with access to over 7,400 producers).
. Employee Benefits provides stop loss, group life, voluntary employee-paid and
disability products to mid-sized and large businesses. As of December 31,
2012, the Company has 58 employee benefits sales representatives, across 19
sales offices, with average industry experience of 16 years. Approximately
59.4%, 18.8% and 9.6% of 2012 Employee Benefit sales were attributed to stop
loss, life and voluntary products, respectively.
Closed Blocks . We separated our Closed Block Variable Annuity and Closed Block
Institutional Spread Products segments from our other operations and made a
strategic decision to stop actively writing new retail variable annuity
products with substantial guarantee features and to run-off the institutional
spread products portfolio over time. Accordingly, these segments have been
classified as closed blocks and are managed separately from our ongoing
business.
. Closed Block Variable Annuity . In 2009, we decided to cease sales of retail
variable annuity products with substantial guarantee features (the last
policies were issued in early 2010) and placed this portfolio in run-off.
Subsequently, we refined our hedging program to dynamically protect regulatory
and rating agency capital of the variable annuities block for adverse equity
market movements. In addition, since 2010, we have increased statutory reserve
considerably, added significant interest rate risk protection and have more
closely aligned our policyholder behavior assumptions with experience. Our
focus in managing our Closed Block Variable Annuity segment is on protecting
regulatory and rating agency capital from equity market movements via hedging
and judiciously looking for opportunities to accelerate the run-off of the
block, where possible. We believe that our hedging program combined with our
statutory reserves of $7.6 billion at December 31, 2012, related to the
variable annuity block, provides adequate resources to fund a wide range of,
but not all, possible market scenarios as well as a margin for adverse
policyholder behavior.
. Closed Block Institutional Spread Products. In 2009, we also placed the
institutional spread products portfolio in run-off. As of December 31, 2012,
remaining assets in the institutional spread products portfolio had an
amortized cost of $3.8 billion, down from a peak of $14.3 billion in 2008.
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Prior to this offering, we are a wholly owned subsidiary of ING Group, a global
financial institution of Dutch origin offering banking, retirement, insurance
and investment management services. ING Group entered the United States life
insurance market in 1975 through the acquisition of Wisconsin National Life
Insurance Company, followed in 1976 with its acquisition of Midwestern United
Life Insurance Company and Security Life of Denver Insurance Company in 1977.
ING Group significantly expanded its presence in the United States in the late
1990s and 2000s with the acquisitions of Equitable Life Insurance Company of
Iowa (1997), Furman Selz, an investment advisory company (1997), ReliaStar Life
Insurance Company (including Pilgrim Capital Corporation) (2000), Aetna Life
Insurance and Annuity Company (including Aeltus Investment Management) (2000)
and CitiStreet (2008).
ING U.S., Inc. is a holding company incorporated in Delaware on April 7, 1999.
It changed its name from ING America Insurance Holdings, Inc. to ING U.S., Inc.
on June 14, 2012. Our principal executive office is located at 230 Park Avenue,
New York, New York 10169 and our telephone number is (212) 309-8200. Our
website address is ing.us.
We operate our businesses through a number of direct and indirect subsidiaries.