Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — Investor Presentation (September 2018)
24 slides from Great-West Lifeco's investor presentation, September 2018
Slide 1: Investor Presentation September 2018
INVESTOR PRESENTATION SEPTEMBER 2018
Slide 2: Cautionary notes
Cautionary notes CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION This document may contain forward-looking statements. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipa
Slide 3: Company highlights
Company highlights 1. Leading insurance franchise with substantial geographic and product diversity 2. Proven ability to sustain strong long-term earnings and shareholder returns 3. Strong balance sheet, capitalization, and liquidity 3
Slide 4: Company snapshot
Company snapshot • Global financial services holding company with interests in life and health insurance, retirement and investment services, asset management and reinsurance • Operations in Canada, Europe and the U.S. through Great-West Life, London Life, Canada Life, Irish Life, Great-West Financi
Slide 5: 2017 Adjusted Net Earnings $2.6B by geography, channel and product
2017 Adjusted Net Earnings $2.6B 100% Reinsurance 7% Reinsurance 7% Reinsurance 7% US Health 13% Benefits 13% 80% Group / Wealth & Asset Wholesale Mgmt Europe 40% 60% 24% 35% Annuities 40% 21% Individual / Canada Retail 20% Protection 45% 53% 35% 0% BY GEOGRAPHY 1 BY CHANNEL 2017 BY PRODUCT 2017 Not
Slide 6: Significant benefits from corporate structure
Significant benefits from corporate structure 67.7%1 Power Financial Corporation relationship facilitates: • Distribution access to IGM platforms • Shared services with IGM Board composition delivers strong 61.4% governance and oversight Note: As of June 30, 2018 1. IGM also owns 4% of Great-West Li
Slide 7: Key company metrics
Key company metrics Adjusted Net Earnings*(1) $2.6 Holding Company Cash $0.9 Adjusted ROE 14.2% Financial Leverage 27.1% (2) Sales* $117 Financial Strength Ratings S&P AA Assets Under Management $726 Moody’s Aa3 Assets Under Administration $1,423 Regulatory Capital Ratios Book Value per Share $21.22
Slide 8: Canada overview
Canada overview Adjusted Earnings Sales AUA $1,219 $13,608 $185,243 Individual Customer Group Customer • Individual Life Insurance, Living Benefits • Group Life and Health, Group Wealth and (Critical Illness and Disability Insurance) and Group Creditor products Individual Wealth products • #3 share
Slide 9: Europe & Reinsurance overview
Europe & Reinsurance overview Adjusted Earnings Sales AUA $1,121 $21,938 $267,037 U.K. Ireland Germany Reinsurance • #1 Group Risk • Pension, investment • Pension (including • Traditional and provider savings, protection lifetime GMWB) and structured life, products and health individual protection p
Slide 10: U.S. – Great-West Financial overview
U.S. – Great-West Financial overview Great-West Empower Individual Markets Investments Business Retirement Life & annuity Asset management • #2 DC record-keeper with • A leading provider of • $104B in Great-West 8.5M participants executive benefits and Financial AUM or Scale • AUA of $545B single pr
Slide 11: U.S. – Putnam Investments overview
U.S. – Putnam Investments overview Putnam Putnam PanAgora Business Mutual Funds Institutional Institutional • $79B AUM • $42B AUM • $51B AUM Scale • 168K advisors • 70+ clients worldwide • 150+ clients worldwide • 100+ mutual funds • 50+ institutional • Quantitative investment • Fundamental approach
Slide 12: Retail, Customers, Institutional
Retail Customers Institutional Note: In Canadian dollars, at June 30, 2018 12
Slide 13: Strategic acquisition history
1997 2003 2007 2013 2014 2016 2017 JP Morgan RPS Strategic acquisition New products / services New customer segments New distribution channels Synergy target NA achieved Integration EPS accretive NA ongoing ROE target NA achieved 13
Slide 14: Manage and extend the core
• Strengthen positions in targeted regions: Canada, U.S. and Europe, each with market specific strategies Manage and extend the • Maintain balanced portfolio: Insurance, Asset Management and Retirement core • Leverage strong brands, diverse products and substantial customer base to cross-sell and gr
Slide 15: Company highlights
Company highlights 1. Leading insurance franchise with substantial geographic and product diversity 2. Proven ability to sustain strong long-term earnings and shareholder returns 3. Strong balance sheet, capitalization, and liquidity 15
Slide 16: Long track record of consistent execution
Long track record of consistent execution Adjusted Net Earnings C$M $3,000 Empower 25% Putnam launch $2,500 Irish Life 20% $2,000 15% Canada Life $1,500 10% $1,000 London Life 5% $500 $- 0% Earnings ROE Note: Adjusted net earnings is a non-IFRS measure of earnings performance. Adjusted net earnings
Slide 17: Consistent earnings and dividend growth
Consistent earnings and dividend growth Dividends per share Earnings per share (operating) 2.77 2.71 2.68 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 1.47 1.38 0.86 1.20 1.23 1.23 1.23 1.23 1.23 1.23 1.30 0.72 1.06 0.59 0.93 0.49 0.81 0.69 0.56 0.47 0.33 0.39 0.19 0.22 0.27
Slide 18: Returning value to shareholders
Returning value to shareholders(1) 1997 2017 CAGR Earnings per share(2) $0.49 $2.68 9% Dividends per share $0.19 $1.47 11% Share price $9.63 $35.10 7% $100 Invested(3) $100 $556 9% Consistent shareholder returns over many years 1. Data adjusted for historical share split 2. Adjusted earnings per sha
Slide 19: Company highlights
Company highlights 1. Leading insurance franchise with substantial geographic and product diversity 2. Proven ability to sustain strong long-term earnings and shareholder returns 3. Strong balance sheet, capitalization, and liquidity 19
Slide 20: Strong regulatory capital position
Strong regulatory capital position Regulatory Capital Ratios GWL LICAT Ratio OSFI Minimum 90% Total Regulatory Capital Available Regulatory Required Capital OSFI Supervisory Target 100% $25.8 Billion GWL Ratio 133% $19.4 Billion GWL Target Range 110% – 120% 133% The Great-West Life Assurance Compa
Slide 21: Strong liquidity and credit profile
Strong liquidity and credit profile Strong Liquidity & Credit Ratings Profile Well Laddered Senior Debt Maturity Profile Senior Debentures (incl. Lifeco guaranteed debt) (C$M) GWL Lifeco Financial Strength Ratings Euro Senior Debt (Opco) (Holdco)* $987 $900 A.M. Best A+ $762 $759 $649 DBRS AA A (hig
Slide 22: Efficient capital structure
Efficient capital structure Senior Debentures Lifeco Subordinated Debentures Finance LP Preferred Shares Great-West Lifeco $900m Euro Senior Debt Inc. Lifeco U.S. Senior Debt $1.9b Finance $2.7b Short-term borrowings $1.5b 2018, LP by subsidiaries $1,039m Capital Trust Securities The Great-West Life
Slide 23: Conservative investment policy
Conservative investment policy (1) (1) Lifeco Invested Assets Bond Portfolio by Credit Rating $180.7 billion $129.8 billion Cash & Investment BB & Lower Loans to CD's Properties 1% Policyholders 2% BBB AAA 5% 3% 19% 18% Stocks 5% Mortgages 13% AA A 28% Bonds 72% 34% • Asset portfolio predominantly f
Slide 24: Investor Presentation September 2018
INVESTOR PRESENTATION SEPTEMBER 2018
Great-West Lifeco — Investor Presentation (September 2018) on 6ix