Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Investor Presentation (March 2021)
24 slides from Great-west Lifeco's investor presentation, March 2021
Slide 1: Investor Presentation
Investor Presentation Q4 2020 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: Highly Diversified Business With Leadership Positions in Key Markets
Highly Diversified Business With Leadership Positions in Key Markets
Slide 4: A Leading Global Financial Services Company
A Leading Global Financial Services Company US 13% Canada 36% 170+ Years 6th Capital & Risk Solutions Of History Largest Life Insurer 21% $2.9B in North America1 Net Earnings5 Europe $2.0T $951B 31% US Assets Under Administration2,3 Assets Under Management2,3 10% Capital & Risk Solutions 20% Canada
Slide 5: Great-West Lifeco At A Glance
Great-West Lifeco At A Glance • Great-West Lifeco (“Lifeco”) is a Key Performance Metrics Financial Strength Ratings, Regulatory Capital and Liquidity global financial services holding In $B, unless otherwise noted company with interests in life 12 Months Ended 12 Months Ended As at insurance, healt
Slide 6: Leadership Position Across Operating Segments
Leadership Position Across Operating Segments CANADA U.S. EUROPE CAPITAL & RISK SOLUTIONS 45% 10% 26% 20% Of Base Earnings1,2 Of Base Earnings1,2 Of Base Earnings1,2 Of Base Earnings1,2 • A leader for insurance and • Empower: #2 defined • U.K.: Market leader in group • Top 10 global reinsurer wealth
Slide 7: Canada
Canada Overview Earnings and ROE 1,2 (C$m) Key Metrics 2,3 (by Business Unit) Individual Customer (IC) and Group Customer Base Earnings* Sales: $12B1 (GC) businesses 1,206 Life insurance, health insurance, retirement 1,178 Group savings and investment management Customer Ind. 22% Leading market shar
Slide 8: U.S.
U.S. Overview Earnings and ROE 1,3,6 (C$m) Key Metrics 3,4 Two primary businesses: Empower Retirement 380 Base Earnings * Sales: $137B1 and Putnam Investments 350 273 Putnam Empower is the second-largest retirement 6% services provider in the U.S., serving 67k plans Base Net Empower and 12m particip
Slide 9: Empower’s Acquisition of Personal Capital
Empower’s Acquisition of Personal Capital Adds best-in-class hybrid digital wealth management platform to Empower • High growth direct-to-consumer wealth management business focused on large mass affluent market • Profitable business prior to customer acquisition costs (CAC) with attractive new cust
Slide 10: Empower’s Acquisition of MassMutual’s Retirement Services Business
Empower’s Acquisition of MassMutual’s Retirement Services Business ✓ Strengthens Empower’s #2 position in the growing U.S. retirement industry ✓ Establishes a clear #1 leadership position in highly attractive small-medium corporate Consolidates market segment Empower’s leadership ✓ Presents meaningf
Slide 11: Europe
Europe Segment Overview Earnings and ROE 1,2 (C$m) Other Key Metrics 2,3 Operations in the U.K., Ireland and Germany 1,004 Base Earnings by Geography* 913 Market leader in group risk, a leading player in 796 payout annuities and a strong competitor in the 688 Germany equity release mortgage market i
Slide 12: Capital & Risk Solutions (CRS)
Capital & Risk Solutions (CRS) Segment Overview Earnings and ROE 1,2 (C$m) Provides capital and risk solutions to clients primarily located in the U.S. 614 and Europe through operations in the U.S., Ireland, Barbados and Bermuda 536 Includes both reinsurance and retrocession business transacted dire
Slide 13: Consistent Long-Term Earnings and Successful M&A Track Record
Consistent Long-Term Earnings and Successful M&A Track Record
Slide 14: Long History Of Consistent Execution
5,000 Long History Of Consistent Execution 70.0% MassMutual’s Retirement Net Income Available to Common Shareholders Services 2000 – 2020, C$m Business 60.0% 4,000 1 50.0% 2,961 2,943 3,000 2,762 2,641 40.0% 2,546 2,359 2,278 2,149 2,056 2,022 2,000 1,875 30.0% 1,806 1,742 22.9% 1,600 1,627 1,615 20
Slide 15: Solid Earnings and Dividend Growth
Solid Earnings and Dividend Growth 3.17 3.00 2.77 2.67 2.55 2.49 2.30 2.34 2.10 2.13 2.17 1.96 1.90 1.79 1.72 1.70 1.56 1.48 1.75 1.26 1.65 1.56 1.47 1.38 1.30 0.86 1.20 1.23 1.23 1.23 1.23 1.23 1.23 0.69 1.06 0.93 0.81 0.69 0.56 0.47 0.33 0.39 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 16: History Of Value Creation Through M&A
History Of Value Creation Through M&A Aviva Health MassMutual’s ACQUISITIONS JP Morgan Insurance Ireland Retirement Services RPS Limited Business 1997 2003 2007 2013 2014 2016 2017 2018 2019 2020 U.S. Individual DIVESTITURES Life Insurance and Annuity Business ✓ Long-Term ROE of 15% or Higher ▪ U.S.
Slide 17: 2020 Acquisitions, Divestitures and Financing Activity
2020 Acquisitions, Divestitures and Financing Activity 1 On Aug. 4, 2020, Irish Life completed the sale of Irish Progressive Services International Limited (IPSI) On Aug. 4, 2020, the Company announced the proposed sale of GLC Asset Management Group Ltd. (GLC) to Mackenzie Financial 2 Corporation (t
Slide 18: Strong Balance Sheet and Capital Position
Strong Balance Sheet and Capital Position
Slide 19: Diversified, High Quality Asset Mix
Diversified, High Quality Asset Mix Conservative Investment Portfolio, Predominantly Comprised of Fixed Income Instruments – 99% of Which Is Investment-Grade • Invested assets of ~$215B Invested Asset Distribution1 Bond Portfolio Quality1 • Bonds represent 71% – 99% are investment grade – 75% rated
Slide 20: Solid Capital Base
Solid Capital Base Substantial Excess Capital Over Regulatory Thresholds CLAC1 – LICAT Ratio GWL&A2 – Risk-Based Capital 662% 140% 139% 136% 135% 133% 132% 131% 129% CLAC Target 502% Range: 480% 484% 110% - 120% 458% OSFI Supervisory Target – 100% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2
Slide 21: Strong Liquidity and Well-Laddered Debt Maturity Profile
Strong Liquidity and Well-Laddered Debt Maturity Profile • Liquidity requirements are largely Historical Coverage Ratio1 Historical Leverage Ratio2 self-funded (x) (%) – Short-term obligations met by 8.6x 8.9x 33.8% 8.1x internal funds and maintaining 7.1x 7.2x 27.8% 27.1% 27.1% 27.6% levels of liqu
Slide 22: 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 *Lifeco (Holdco) are senior debt ratings 1. Canada Life (Opco) are financial strength ratings 2. Lifeco (Holdco) are senior debt ratings 22
Slide 23: Efficient Capital Structure
Efficient Capital Structure Lifeco Finance LP U.S. Senior Debt $874m Lifeco Finance 2018, LP U.S. Senior Debt $1,007m Senior Debentures $2.5b Lifeco U.S. Finance 2020, LP Preferred Shares $2.7b U.S. Senior Debt $631m Euro Senior Debt $1.5b Empower Finance 2020, LP U.S. Senior Debt $1,889m The Canada
Slide 24: Investor Presentation
Investor Presentation Q4 2020 Note: All dollar amounts are expressed in Canadian dollars and references to “dollars” or “$” are to Canadian dollars, unless otherwise stated.
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