Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Investor Presentation (March 2022)
27 slides from Great-west Lifeco's investor presentation, March 2022
Slide 1: Investor Presentation
Investor Presentation March 2022 Note: All dollar amounts are expressed in Canadian dollars and references to “dollars” or “$” are to Canadian dollars, unless otherwise stated.
Slide 2: Cautionary notes
Cautionary notes CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION This document may contain forward-looking information. Forward-looking information includes statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "will", "may", "e
Slide 3: Diversified Business With Leadership Positions in Key Markets
Diversified Business With Leadership Positions in Key Markets
Slide 4: A global financial services company
A global financial services company Capital & Risk Solutions 17% 6th Canada 170+ Years 38% Of History Largest Life Insurer $3.1B in North America1 Net Earnings4 Europe 31% $2.3T $1.0T US 16% Assets Under Administration2,3 Assets Under Management2,3 Capital & Risk Solutions 17% Canada 37% $3.3B Base
Slide 5: Great-West Lifeco at a glance
Great-West Lifeco at a glance • Great-West Lifeco Inc. is a global Key Performance Metrics Financial Strength Ratings1, Regulatory Capital and Liquidity financial services holding company In $B, unless otherwise noted As at with interests in life insurance, 12 Months Ended 12 Months Ended health ins
Slide 6: Market-leading franchises well positioned for growth
Market-leading franchises well positioned for growth Canada U.S. Europe Capital & Risk Solutions 37% 38% 21% 16% 25% 31% 17% 17% of base earnings1,2,3 of net earnings1,3 of base earnings1,2,3 of net earnings1,3 of base earnings1,2,3 of net earnings1,3 of base earnings1,2,3 of net earnings1,3 • A lea
Slide 7: Four value-creation priorities: focus on the customer and leverage risk & investment expertise
Four value-creation priorities: focus on the customer and leverage risk & investment expertise Advice-centered value Digital capabilities Workplace extensions Risk & investment expertise creation Capture value through Deliver advice and Extend workplace participant Leverage capabilities to advice-ba
Slide 8: Our four priorities are expected to drive growth across the portfolio
Our four priorities are expected to drive growth across the portfolio Higher Lower impact impact Advice-centered value creation Digital capabilities Workplace extensions Risk & investment expertise 8
Slide 9: Sustainability, DEI and ESG are core to our value creation priorities
Sustainability, DEI and ESG are core to our value creation priorities Environmental Diversity, Equity ESG Stewardship & Inclusion Investing • Committed to achieving net zero for • Lifeco’s Diversity Policy focuses on • Inclusion of qualitative and quantitative operations well before 2050, and net ze
Slide 10: Medium-term financial objectives
Medium-term1 financial objectives target dividend 8-10% base EPS growth p.a 2 . 14-15% base ROE 2 45-55% payout ratio, base earnings2 • Organic earnings growth from • Diversified business that drives • Cash generative business supporting market-leading franchises in strong and stable returns a progr
Slide 11: Consistent Long-Term Earnings and Strong M&A Track Record
Consistent Long-Term Earnings and Strong M&A Track Record
Slide 12: Solid long-term earnings and shareholder returns
Solid long-term earnings and shareholder returns 6.6% 14.1% Lifeco net earnings per common share (EPS) $4.00 30.0% 2012 – 2021 C$, rounded to the nearest cent $3.50 Annual EPS growth1 Average ROE1 3.37 3.17 25.0% 3.00 $3.00 2.77 2.67 2.55 2.49 20.0% $2.50 2.34 2.17 1.90 16.6% 15.7% $2.00 15.0% 15.3%
Slide 13: History of stable and growing dividends
History of stable and growing dividends Annual dividends per common share1 5.2% 2021 dividend yield2 ‘14 – ‘21 CAGR 5.6% 45% - 55% Target dividend payout ratio3 Base3 Net4 51.4% 53.6% 1.23 1.23 1.23 1.30 1.38 1.47 1.56 1.65 1.75 1.80 2021 dividend payout ratio 2012 2013 2014 2015 2016 2017 2018 2019
Slide 14: Strong track record of value-enhancing M&A
Strong track record of value-enhancing M&A ACQUISITIONS Full-Service Retirement Business1 Retirement Retirement Health Insurance Services Business Plan Services Ireland Ltd. L&G International RPS (Ireland) Ltd. Minority Interest 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 DIVESTITURES U.S. ind
Slide 15: Recent acquisitions transforming the U.S. business
Recent acquisitions transforming the U.S. business Retirement Services Business Full-Service Retirement Business • AUM1 of US$23B2 • AUA1 of US$190B8; participants of 2.5M8 • Expected to close in the first half of 2022, subject to regulatory and customary closing conditions • Direct-to-consumer hybr
Slide 16: Performance against medium-term financial objectives
Performance against medium-term1 financial objectives 1-Year 3-Year As of December 31, 2021 Medium-Term Financial Objectives Base2 Base2 8-10% base EPS2 growth per year 21.9% 13.4% 14-15% base ROE2 14.6% 13.6% Target dividend payout ratio of 45-55% of base earnings2 51.4% 56.7% Net Financial Highlig
Slide 17: Strong Balance Sheet and Capital Position
Strong Balance Sheet and Capital Position
Slide 18: Diversified, high-quality asset mix
Diversified, high-quality asset mix Conservative investment portfolio, predominantly comprised of fixed income instruments – 99% of which are investment-grade • Invested assets of ~$206B Invested Asset Distribution1 Bond Portfolio Quality1 • Bonds represent 68% – 99% are investment grade – 74% rated
Slide 19: Robust capital and liquidity
Robust capital and liquidity Historical Coverage Ratio2 Historical Financial Leverage Ratio1, 3 Historical LICAT Ratio4 • Liquidity requirements are (x) (%) (%) largely self-funded 135% 9.3x 129% 124% – Short-term obligations met 7.6x 8.2x 7.3x 7.1x by internal funds and 33.8% 33.2% maintaining leve
Slide 20: Strong credit ratings
Strong credit ratings Canada Life Lifeco Outlook (Opco)1 (Holdco)2 A+ Stable AA A (High) Stable AA A Negative Aa3 Stable AA A+ Stable 1. Canada Life’s ratings are financial strength ratings 2. Lifeco’s ratings are senior debt ratings 20
Slide 21: Efficient capital structure
Efficient capital structure Lifeco Finance (Delaware) LP U.S. Senior Debt $874m Lifeco Finance 2018, LP U.S. Senior Debt $1,008m Senior Debentures $2.5b Lifeco U.S. Finance 2020, LP Preferred Shares $2.7b U.S. Senior Debt $632m Euro Senior Debt $1.4b Subordinated LRCN $1.5b Empower Finance 2020, LP
Slide 22: Appendix
Appendix
Slide 23: Canada
Canada Overview Earnings 1,2 Return on Equity (ROE) 1,2 Individual Customer (IC) and Group Customer (GC) businesses 1,206 1,220 18.5% 1,187 Life insurance, health insurance, retirement 1,178 savings and investment management 17.2% Leading market shares in major product 16.8% 16.7% categories 1,051 1
Slide 24: U.S.
U.S. Overview Earnings 1,2,3 Return on Equity (ROE) 1,2 Financial Services (Empower) Two primary businesses: Empower and Putnam 11.4% 12.2% Investments 671 8.6% 8.7% Empower is the second-largest retirement 5.6% 499 5.1% services provider in the U.S.4, serving 67k plans Net and 13M5 participants wit
Slide 25: Europe
Europe Segment Overview Earnings 1,2 Return on Equity (ROE) 1,2 Operations in the U.K., Ireland and Germany 1,004 976 17.2% 913 16.5% Market leader in group risk, a leading player in 830 796 payout annuities and a strong competitor in the 15.7% 688 equity release mortgage market in the U.K. 14.6% Ne
Slide 26: Capital & Risk Solutions (CRS)
Capital & Risk Solutions (CRS) Segment Overview Earnings 1,2 Return on Equity (ROE) 1,2 Includes both reinsurance and retrocession 614 business transacted directly with clients or 44.4% 536 547 through reinsurance brokers in the U.S., Ireland, 532 Barbados and Bermuda 386 401 38.8% Products include
Slide 27: Investor Presentation
Investor Presentation March 2022 Note: All dollar amounts are expressed in Canadian dollars and references to “dollars” or “$” are to Canadian dollars, unless otherwise stated.
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