Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — CIBC Institutional Investor Conference 2016
34 slides from Great-West Lifeco's conference presentation, Sep 22, 2016
Slide 1: Building on our Strengths. Investing in our Future.
Building on our STRENGTHS. Investing in our FUTURE. CIBC Institutional Investor Conference Garry MacNicholas, EVP & CFO Great-West Lifeco Montreal | September 22, 2016
Slide 2: Cautionary Note Regarding Forward-Looking Information
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION These slides may contain, and in the course of their presentations (in their remarks or in response to questions) representatives of the Company may make, forward-looking statements. Forward-looking statements include statements that are predicti
Slide 3: Key messages
Key messages • Market leadership driven by strong business franchises and brands • Multi-diversification: by geography, channel and product type • Experienced and talented management team built through internal development, acquisitions and targeted recruiting • History of consistent execution resul
Slide 4: Significant benefits from corporate structure
Significant benefits from corporate structure (As of June 30, 2016) 67.6% Power Financial Corporation relationship facilitates: • Distribution access to IGM platforms • Shared services with IGM 61.5% Board composition delivers strong governance and oversight CIBC Institutional Investor Conference |
Slide 5: Great-West Lifeco is diversified across geographies, channels and products
Great-West Lifeco is diversified across geographies, channels and products EMPLOYEES MARKET REACH SCALE U.S. 7,000 Customers 28M Benefits paid $22B Europe 4,200 Canada 11,300 Advisors 280K AUA $1.2T 2015 EARNINGS $2.8B 100% Reinsurance U.S. Group / Health Benefits 80% Wholesale Asset Mgmt Europe 60%
Slide 6: A history of delivering strong returns for our shareholders
A history of delivering strong returns for our shareholders Operating Earnings C$M Empower $3,000 launch 25% Putnam $2,500 Irish Life 20% $2,000 15% Canada Life $1,500 10% $1,000 TSR: 9% London Life TSR: 6% 5% $500 TSR: 16% $- 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 7: Consistent growth over the years
Consistent growth over the years Dividends per share Earnings per share (operating) 2.77 2.55 2.41 2.30 2.02 2.10 2.05 2.11 1.92 2.00 1.83 1.72 1.50 1.27 1.11 1.38 1.30 0.86 1.20 1.23 1.23 1.23 1.23 1.23 1.23 0.72 1.06 0.59 0.93 0.49 0.81 0.35 0.41 0.69 0.56 0.47 0.22 0.27 0.33 0.39 0.12 0.15 0.19 1
Slide 8: Returning value to shareholders
Returning value to shareholders1 1995 2015 CAGR Earnings per share $0.35 $2.77 11% Dividends per share $0.12 $1.30 13% Share price $3.59 $34.53 12% $100 Invested2 $100 $1,906 16% Consistent shareholder returns over many years 1. Data adjusted for historical share splits 2. Return calculation include
Slide 9: Key company metrics
Key company metrics1 2015 Operating Earnings $2.8 Holding Company Cash $0.8 2015 Financial Leverage 26% 2015 Sales $128 Financial Strength Ratings3 Assets Under Management $634 S&P AA Assets Under Administration $1,184 Moody’s Aa3 Regulatory Capital Ratios Book Value per Share2 $19 MCCSR 232% Market
Slide 10: Stable trends
Stable trends MCCSR Ratio Return on Equity (Trailing 4 quarters ) 238% 16.6% 16.5% 232% 15.7% 223% 224% 15.2% 14.7% 207% 14.0% 204% 2011 2012 2013 2014 2015 Q2/16 2011 2012 2013 2014 2015 Q2/16 Operating Earnings Book Value per Share (C$M) $2,762 $2,546 $20.07 $19.04 $16.80 $2,052 $15.16 $1,898 $1,9
Slide 11: Efficient capital structure
Efficient capital structure Great-West Lifeco Inc. The Great-West Life Great-West Life & Putnam Investments Assurance Company Annuity Insurance LLC (MCCSR) Company (RBC) Europe Canada (Solvency II) Reinsurance U.K. Ireland Germany Capital raised primarily at Great-West Lifeco and invested in subsidi
Slide 12: A differentiated business model driving stable, sustained growth
A differentiated business model driving stable, sustained growth COMPETITIVE DIFFERENTIATORS Advice channel Underwriting and Disciplined Expense commitment risk management investment, M&A management Leadership in Developed Strong regulatory Industry markets where we economies frameworks consolidatio
Slide 13: Growth strategy
Growth strategy • Strengthen positions in targeted regions: Canada, U.S. and Europe, each with market specific strategies Manage and extend the • Maintain balanced portfolio: Insurance, Asset Management and Retirement core • Leverage strong brands, diverse products and substantial customer base to c
Slide 14: Culture and focus are shifting
Culture and focus are shifting FROM TO Growth and Acquisition, synergy harvesting and Customer acquisition and retention through value creation expense containment service excellence / differentiation Productivity Expense management; operational Competitive unit costs, continuous focus excellence im
Slide 15: Leveraging global strengths and capabilities to drive growth
Leveraging global strengths and capabilities to drive growth Canada U.S. Europe Protection Depth of insurance expertise across life, health, wealth and retirement Asset management Diversity of platforms, investment styles, products and global reach Retirement solutions Scale and breadth of member of
Slide 16: Protection: delivering on promises for over 28 million customer relationships
Protection: delivering on promises for over 28 million customer relationships Canada U.S. Europe $8.6B in benefits paid to clients $1.1B in benefits paid to clients $3.9B in benefits paid to clients • $2B life insurance benefits to 40K • $800M life insurance benefits to 4K • $1.1B life insurance ben
Slide 17: Asset management: diverse platforms managing $650B+
Asset management: diverse platforms managing $650B+ (C$) $36B $101B $10B $109B Retail Customers $13B $152B Institutional $52B $80B $99B Note: In Canadian dollars, at Dec. 31, 2015 $50B of total sub-contracted to external managers. Canada Life Investments also includes funds managed by Isle of Man. C
Slide 18: Asset management: distribution and collaboration across countries and brands
Asset management: distribution and collaboration across countries and brands Canada U.S. Europe • Actively promoting product offerings across platforms • Recent developments: • Irish Life Investment Managers (ILIM) sold through Empower Retirement • Setanta through GLC • PanAgora through Canada Life
Slide 19: Putnam: focused on reaching scale in a challenging environment
Putnam: focused on reaching scale in a challenging environment • Strong investment track record Putnam investment and distribution • Substantial flows into alternatives capabilities are • PanAgora, a highly rated institutional platform strong • Industry-leading distribution capabilities However, the
Slide 20: Retirement: a global growth priority
Retirement: a global growth priority Canada U.S. Europe Enhancing sponsor and participant Driving further scale and delivering Building on solid foundations, offerings to protect and grow revenue and cost synergies from positioning Irish Life Empower as existing relationships and build integration t
Slide 21: Digitally connecting to customers and advisors
Digitally connecting to customers and advisors Canada U.S. Europe Individual Group Putnam Empower U.K. Ireland Germany advised Key digital strategies 4M 8M 4M 8M 3.4M 1M 325K Digitally connect to advisors and customers Cross-sell to group insurance customers Target marketing using customer / advisor
Slide 22: M&A: a core competency and key element of our growth strategy
M&A: a core competency and key element of our growth strategy M&A strategy • Actively prospecting • Bolt-on or transformational • Asset management Acquisition targets • Consolidation in the U.S. retirement marketplace • U.K. business extension • Experienced due diligence and integration teams Execut
Slide 23: M&A scorecard: strong track record of value creation
M&A scorecard: strong track record of value creation 1997 2003 2007 2013 2014 JP Morgan RPS Strategic acquisition New products / services New customer segments New distribution channels Synergies target achieved Integration ongoing EPS accretive Integration ongoing ROE target achieved Integration on
Slide 24: Well positioned for future growth
Well positioned for future growth • Stability of businesses • In-depth experience and Deep Strong • Conservative approach industry knowledge management performance • M&A skill set • Sustained earnings growth team • Market leadership • Strong capital position Well- • Multi-diversification Financial •
Slide 25: Opportunities for growth
Opportunities for growth Potential for • Grow scale in asset management to leverage investments acquisitions in the U.S. • Actively participate in consolidation of retirement market Broaden • Assess opportunities for broader participation in the U.K. market European product offering • Leverage curre
Slide 26: Capital deployment priorities
Capital deployment priorities • Continued strong earnings and capital generation provide significant flexibility • Maintain strong and stable capital structure • Reinvest in Lifeco growth strategy • Organic growth • Strategic acquisitions • Returning value to shareholders • Progressive dividend grow
Slide 27: Appendix
APPENDIX CIBC Institutional Investor Conference | September 22, 2016 27
Slide 28: Canada overview
Canada overview Scale Relationships AUM $166B Customers 12M+ Net Earnings $1.2B Advisors 25K+ Wealth Management Individual Insurance Group Insurance • Individual and Group retirement • Individual Insurance and Living • Group Life and Health and and investment products Benefits (critical illness and
Slide 29: Europe & Reinsurance overview
Europe & Reinsurance overview Scale AUM $238B Employees 4.2K U.K. Ireland Germany Reinsurance • #1 Group Risk provider • Pension, investment • Pension (including lifetime • Traditional and Structured savings and protection GMWB) and individual Life, Payout Annuity and • Strong position in retail pro
Slide 30: U.K. overview
U.K. overview £37B AUA | 3.4M Customers | 1,100 Employees Group Risk Payout Annuity Wealth Management • Life Insurance, Disability • Payout annuities sold to Drawdown Accumulation Income and Critical Illness provide lifetime retirement products products benefits income • Full range of drawdown • Lea
Slide 31: Great-West Financial: well-positioned in retirement markets
Great-West Financial: well-positioned in retirement markets Great-West Empower Individual Markets Investments Business Retirement Life & annuity Asset management • 2nd largest record-keeper; • A leading provider of • $89B in Great-West 8M participants executive benefits and Financial AUM or Managed
Slide 32: Putnam: globally diversified asset manager
Putnam: globally diversified asset manager with $146 AUM Putnam Putnam PanAgora Business Mutual Funds Institutional Institutional • $71B AUM • $37B AUM • $38B AUM Scale • 158K advisors • 75 clients worldwide • 150+ clients worldwide • 80+ mutual funds • 50 institutional strategies • Quantitative inv
Slide 33: Consistent positive experience gains contribute to earnings
Consistent positive experience gains contribute to earnings (C$M) 3,268 3,347 2,874 2,769 2,576 2,633 2,499 2,504 2,447 2,237 Experience Gains (Losses), Management Actions and Changes in Assumptions as a % of Net Income Before Tax 10 Year 25% 24% 25% Avg. 20% 19% 18% 20% 20% 21% 11% 20% 2006 2007 20
Slide 34: Building on our Strengths. Investing in our Future.
Building on our STRENGTHS. Investing in our FUTURE.
Great-West Lifeco — CIBC Institutional Investor Conference 2016 on 6ix