Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — Q2 2024 Earnings Presentation
40 slides from Great-West Lifeco's earnings presentation, 2024
Slide 1: Supplemental Information Package for Analysts and Investors Q2 2024
Supplemental Information Package For Analysts and Investors (Unaudited) Q2 2024
Slide 2: Cautionary Note regarding Non-GAAP Financial Measures and Ratios
Q2 2024 Quarterly Information Package Cautionary Note regarding Non-GAAP Financial Measures and Ratios This document contains some non-GAAP financial measures and non-GAAP ratios as defined in National Instrument 52-112 “Non-GAAP and Other Financial Measures Disclosure”. Terms by which non-GAAP fina
Slide 3: Table of Contents
Q2 2024 Quarterly Information Package Table of Contents 3 Overview Europe 26 Europe Drivers of Earnings - Common Shareholders Great-West Lifeco Inc. 27 Assets Under Administration 4 Lifeco Financial Highlights 28 Sales, Net Book Premiums and CSM 7 Lifeco Value Drivers 8 Lifeco Base Earnings Capital
Slide 4: Lifeco Overview
Q2 2024 Quarterly Information Package Lifeco Overview Great-West Lifeco Inc. (GWO, Lifeco or the Company) is a financial services holding company with interests in the life insurance, health insurance, retirement savings, investment management, and reinsurance businesses, primarily in Canada, the Un
Slide 5: Lifeco Financial Highlights
Q2 2024 Quarterly Information Package Lifeco Financial Highlights (C$MM, unless otherwise stated) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Base earnings (loss)1, 4 Canada 322 302 302 301 296 283 278 260 340 624 561 1,158 U.S. 324 286 286 261 262 265 218 215 214 610 4
Slide 6: Financial Highlights - Continued
Q2 2024 Quarterly Information Package Lifeco Financial Highlights - Continued 2024 2023 2022 Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 Canada Life Assurance Company - LICAT Ratio 130 % 129 % 129 % 128 % 128 % 126 % 127 % Canada Life Assurance Company - LICAT Ratio - proforma1 130 % 129 % Dividends Common dividen
Slide 7: Financial Highlights - Continued
Q2 2024 Quarterly Information Package Lifeco Financial Highlights - Continued (C$MM, unless otherwise stated) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Sales and net asset flows1 Workplace - Life & Health sales 175 201 148 1,947 155 222 144 144 376 377 2,472 Workplace - Re
Slide 8: Lifeco Value Drivers
Q2 2024 Quarterly Information Package Lifeco Value Drivers Operating Segments1 Capital and Value Drivers Canada U.S. Europe Risk Solutions Group Life & Health Empower Defined Group Life & Health Workplace Solutions Group Retirement Contribution Group Retirement Empower Personal Wealth & Asset Indivi
Slide 9: Lifeco Base Earnings
Q2 2024 Quarterly Information Package Lifeco Base Earnings1 (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Canada Workplace Solutions 190 190 190 192 191 164 159 141 167 380 323 706 Group Life & Health 153 157 157 159 159 130 135 310 265 583 Group Retirement 37 33 3
Slide 10: Items Excluded from Base Earnings Summary
Q2 2024 Quarterly Information Package Lifeco - Items Excluded from Base Earnings Summary (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 2024 2023 2023 Items excluded from base earnings Market experience relative to expectations 28 107 107 (213) 153 (79) (168) (386) 135 (247) (307) Pu
Slide 11: The Canada Life Assurance Company - LICAT
Q2 2024 Quarterly Information Package The Canada Life Assurance Company - LICAT LICAT ratio for the Canada Life Assurance Company is disclosed according to OSFI's LICAT 2024 Guideline effective January 1, 2024. (C$MM unless otherwise stated) IFRS 17 IFRS 4 2024 2023 2022 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Avai
Slide 12: Statement of Net Earnings
Q2 2024 Quarterly Information Package Lifeco Statement of Net Earnings (C$MM, except Earnings per common share) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Insurance service result Insurance revenue 5,273 5,250 5,250 5,174 5,110 5,081 5,037 5,442 4,648 10,523 10,118 20,
Slide 13: Lifeco Drivers of Earnings - Common Shareholders
Q2 2024 Quarterly Information Package Lifeco - Drivers of Earnings - Common Shareholders (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Expected insurance earnings 751 741 741 743 732 739 713 700 675 1,492 1,452 2,927 Risk adjustm
Slide 14: Balance Sheets - Assets
Q2 2024 Quarterly Information Package Lifeco Balance Sheets - Assets (C$MM) 2024 2023 2022 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Assets Cash and cash equivalents 8,582 7,708 7,742 6,978 7,171 6,666 7,290 Bonds 156,349 156,008 157,051 150,042 152,325 158,252 156,091 Mortgage loans 38,355 38,215 38,414 37,276 36,929 3
Slide 15: Balance Sheets - Liabilities and Equity
Q2 2024 Quarterly Information Package Lifeco Balance Sheets - Liabilities and Equity (C$MM) 2024 2023 2022 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Liabilities Insurance contract liabilities 145,282 145,018 144,388 133,724 136,774 138,765 135,438 Investment contract liabilities 87,070 87,599 88,919 88,960 89,777 94,612
Slide 16: Cash at Holding Company
Q2 2024 Quarterly Information Package Lifeco Cash at Holding Company (C$MM) 2024 Fiscal Q2 Q1 2023 Lifeco cash balance Beginning 936 525 996 Dividends to Lifeco 666 944 3,471 Debenture interest paid by Lifeco1 (76) (55) (404) Changes in external debentures and short-term debt — — (1,360) Other capit
Slide 17: Supplemental Balance Sheet Information
Q2 2024 Quarterly Information Package Lifeco Supplemental Balance Sheet Information (C$MM) 2024 2023 Mortgage Loan Portfolio Q2 Q1 Q4 Q3 Q2 Q1 Non- Total Bond Portfolio Quality Insured Insured Total AAA 22,588 22,122 24,298 24,159 24,000 24,373 Q2 2024 AA 29,928 30,723 31,435 29,508 30,764 32,333 Si
Slide 18: Capital Structure
Q2 2024 Quarterly Information Package Lifeco Capital Structure (C$MM) 2024 2023 2024 2023 LIABILITIES Q2 Q1 Q4 Q3 Q2 Q1 EQUITY Q2 Q1 Q4 Q3 Q2 Q1 Short-term Non-Controlling Interests Commercial paper and other short-term debt instruments, unsecured 137 134 132 136 132 135 Non-controlling interest in
Slide 19: Fee and Other Income
Q2 2024 Quarterly Information Package Lifeco Fee and Other Income (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Fee and other income Canada Workplace Solutions 264 263 244 233 240 228 219 189 527 468 945 Individual Wealth Management 202 190 131 88 92 90 88 90 392 182 40
Slide 20: Operating and Administrative Expenses
Q2 2024 Quarterly Information Package Lifeco Operating and Administrative Expenses (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Operating and administrative expenses Salaries and other employee benefits 1,222 1,225 1,206 1,134 1,074 1,130 1,113 1,048 2,447 2,204 4,544
Slide 21: Canada Drivers of Earnings - Common Shareholders
Q2 2024 Quarterly Information Package Canada - Drivers of Earnings - Common Shareholders (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Expected insurance earnings 338 336 325 328 332 330 324 318 674 662 1,315 Risk adjustment release 3
Slide 22: Canada - Assets Under Administration
Q2 2024 Quarterly Information Package Canada – Assets Under Administration1 (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Workplace Solutions Beginning 69,281 65,512 61,134 62,688 61,665 58,817 55,886 56,112 65,512 58,817 58,817 Net asset flows 64 253 435 (161) 157 418
Slide 23: Canada - Net Book Premiums, CSM and Sales
Q2 2024 Quarterly Information Package Canada – Net Book Premiums, CSM and Sales (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Group Life & Health book premiums1 Beginning 14,985 14,843 14,700 12,761 12,583 12,155 11,955 11,808 14,843 12,155 12,155 New sales 115 159 113
Slide 24: United States Drivers of Earnings - Common Shareholders
Q2 2024 Quarterly Information Package United States - Drivers of Earnings - Common Shareholders (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Expected insurance earnings 6 6 17 16 18 18 18 19 12 36 69 Risk adjustment release 2 2 1 1 2
Slide 25: U.S. - Empower Defined Contribution
Q2 2024 Quarterly Information Package Lifeco U.S. – Empower Defined Contribution (US$MM, unless otherwise stated) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Net revenue1, 4 Spread income2 146 173 156 183 185 198 222 186 319 383 722 Asset-based fee income (net) 327 316 304 3
Slide 26: U.S. - Empower Personal Wealth
Q2 2024 Quarterly Information Package Lifeco U.S. – Empower Personal Wealth (US$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Net revenue1,4 Spread income2 44 46 44 44 39 37 35 32 90 76 164 AUM fees (net) 88 85 78 76 71 64 64 60 173 135 289 Other fees 18 19 18 16 16 12 10
Slide 27: Europe Drivers of Earnings - Common Shareholders
Q2 2024 Quarterly Information Package Europe - Drivers of Earnings - Common Shareholders (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Expected insurance earnings 195 193 193 191 183 180 172 164 153 388 352 726 Risk adjustment re
Slide 28: Europe - Assets Under Administration
Q2 2024 Quarterly Information Package Europe – Assets Under Administration1 (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Workplace Solutions Beginning 33,343 31,327 29,266 29,361 28,666 27,496 25,027 25,156 31,327 27,496 27,496 Net asset flows 147 409 408 510 530 157 1
Slide 29: Europe - Net Book Premiums, CSM and Sales
Q2 2024 Quarterly Information Package Europe – Net Book Premiums, CSM and Sales (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Group Life & Health book premiums1 Beginning 2,459 2,415 2,348 2,306 2,230 2,125 1,990 2,051 2,415 2,125 2,125 New sales 60 42 35 35 59 44 36 37
Slide 30: Capital and Risk Solutions Drivers of Earnings
Q2 2024 Quarterly Information Package Capital and Risk Solutions - Drivers of Earnings - Common Shareholders (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Expected insurance earnings 212 206 206 210 205 209 193 194 185 418 402 81
Slide 31: Capital and Risk Solutions - Run-Rate Insurance Results and CSM
Q2 2024 Quarterly Information Package Capital and Risk Solutions – Run-Rate Insurance Results and CSM (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Run-rate insurance results1 CSM recognized for services provided 38 38 38 38 39 39 41 37 76 78 154 Risk adjustment release
Slide 32: Lifeco Corporate Drivers of Earnings - Common Shareholders
Q2 2024 Quarterly Information Package Lifeco Corporate - Drivers of Earnings - Common Shareholders (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Earnings on surplus 15 8 7 9 9 8 8 10 23 17 33 Base earnings - net investment result1 15
Slide 33: Lifeco Drivers of Earnings - Reconciliation
Q2 2024 Quarterly Information Package Lifeco Drivers of Earnings – Reconciliation (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) 794 763 763 854 786 711 659 674 622 1,557 1,370 3,010 B
Slide 34: Canada - Reconciliation
Q2 2024 Quarterly Information Package Canada Drivers of Earnings – Reconciliation (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) 386 358 370 373 320 304 305 360 744 624 1,367 Base earnings:
Slide 35: U.S. - Reconciliation
Q2 2024 Quarterly Information Package U.S. Drivers of Earnings – Reconciliation (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) — — 18 13 11 13 16 17 — 24 55 Base earnings: net investment re
Slide 36: Europe - Reconciliation
Q2 2024 Quarterly Information Package Europe Drivers of Earnings – Reconciliation (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) 214 193 193 242 211 178 182 164 156 407 360 813 Base ea
Slide 37: Capital & Risk Solutions - Reconciliation
Q2 2024 Quarterly Information Package Capital & Risk Solutions Drivers of Earnings – Reconciliation (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1PF Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) 194 212 212 224 189 202 160 189 89 40
Slide 38: Corporate - Reconciliation
Q2 2024 Quarterly Information Package Lifeco Corporate Drivers of Earnings – Reconciliation (C$MM) 2024 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 2024 2023 2023 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) — — — — — — — — — — — Base earnings: net investmen
Slide 39: Drivers of Earnings - Glossary
Q2 2024 Quarterly Information Package Drivers of Earnings - Glossary Drivers of earnings Description Characteristics Expected insurance earnings Risk adjustment release Release of in-period insurance risk margins into profit for non-Premium Allocation Stable period to period and emerges predictably
Slide 40: Drivers of Earnings - Glossary
Q2 2024 Quarterly Information Package Drivers of Earnings - Glossary Drivers of earnings Description Characteristics Items excluded from base earnings Market experience relative to The net earnings impact related to the direct equity and interest rate market Significant volatility which arises from