Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Q2 2023 Earnings Presentation
39 slides from Great-west Lifeco's earnings presentation, 2023
Slide 1: Supplemental Information Package Q2 2023
GREAT-WEST LIFECOr<. Supplemental Information Package For Analysts and Investors (Unaudited) Q2 2023 Updated Template canada IB EMPOWER Mii Putnam
Slide 2: Cautionary Note regarding Non-GAAP Financial Measures and Ratios
Q2 2023 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 2023 Quarterly Information Package Table of Contents Overview 3 Europe Europe Drivers of Earnings - Common Shareholders 25 Great-West Lifeco Inc. Assets Under Administration 26 Lifeco Financial Highlights 4 Sales, Net Book Premiums and CSM 27 Lifeco Value Drivers 7 Lifeco Base Earnings 8 Capital
Slide 4: Lifeco Overview
Q2 2023 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 2023 Quarterly Information Package Lifeco Financial Highlights (C$MM, unless otherwise stated) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Common shareholder earnings (loss) - by segment Base earnings (loss)1,3 Canada — 278 260 340 340 224 278 564 1,164 U.S.3 — 218 215 214 164 144 2
Slide 6: Financial Highlights - Continued
Q2 2023 Quarterly Information Package Lifeco Financial Highlights - Continued 2023 2022 Q2 Q1 Q4 Q3 Q2 Q1 Canada Life Assurance Company - LICAT Ratio —% 127 % Canada Life Assurance Company - LICAT Ratio - proforma1 130 % 129 % 126 % 127 % Dividends Common dividends declared / share $— $0.520 $0.520
Slide 7: Financial Highlights - Continued
Q2 2023 Quarterly Information Package Lifeco Financial Highlights - Continued 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Sales and net asset flows1 Workplace - Life & Health net sales — 222 144 144 143 253 222 396 684 Workplace - Retirement net asset flows5,7 — 9,909 5,344 8,026 (5,69
Slide 8: Value Drivers
Q2 2023 Quarterly Information Package Lifeco Value Drivers Operating Segments1 Capital and Value Drivers Canada U.S. Europe Risk Solutions Group Life & Health Empower Defined Group Life & Health Workplace Solutions Group Retirement Contribution Group Retirement Empower Personal Wealth & Asset Indivi
Slide 9: Lifeco Base Earnings
Q2 2023 Quarterly Information Package Lifeco Base Earnings (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Canada Workplace Solutions — 159 141 167 213 110 159 323 631 Individual Wealth Management — 61 44 60 52 43 61 95 199 Insurance & Annuities — 43 120 110 65 63 43 128 358 Corpora
Slide 10: The Canada Life Assurance Company - LICAT
Q2 2023 Quarterly Information Package The Canada Life Assurance Company - LICAT LICAT ratio for the Canada Life Assurance Company is disclosed according to OSFI's LICAT 2023 Guideline effective January 1, 2023. The 2023 Guideline specifies that Available Capital for LICAT purposes includes the Contr
Slide 11: Statement of Net Earnings
Q2 2023 Quarterly Information Package Lifeco Statement of Net Earnings1 (C$MM, except Earnings per common share) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Insurance service result Insurance revenue — 5,037 5,442 4,648 4,762 4,780 5,037 9,542 19,632 Insurance service expenses — (3,995
Slide 12: Lifeco Drivers of Earnings - Common Shareholders
Q2 2023 Quarterly Information Package Lifeco - Drivers of Earnings - Common Shareholders1 (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Expected insurance earnings — 713 700 675 694 678 713 1,372 2,747 Risk adjustment release — 109 113 112 120 1
Slide 13: Balance Sheets - Assets
Q2 2023 Quarterly Information Package Lifeco Balance Sheets - Assets (C$MM, unless otherwise stated) Jun 30 Mar 31 Dec 31 Jan 1 2023 2023 2022 2022 (Restated) (Restated) Assets Cash and cash equivalents — 6,666 7,290 6,075 Bonds — 158,252 156,091 142,655 Mortgage loans — 37,643 37,197 29,357 Stocks
Slide 14: Balance Sheets - Liabilities and Equity
Q2 2023 Quarterly Information Package Lifeco Balance Sheets - Liabilities and Equity (C$MM, unless otherwise stated) Jun 30 Mar 31 Dec 31 Jan 1 2023 2023 2022 2022 (Restated) (Restated) Liabilities Insurance contract liabilities — 138,765 135,438 157,910 Investment contract liabilities — 94,612 94,8
Slide 15: Supplemental Balance Sheet Information
Q2 2023 Quarterly Information Package Lifeco Supplemental Balance Sheet Information (C$MM, unless otherwise stated) 2023 2022 Mortgage Loan Portfolio Q2 Q1 Q4 Non- Total Bond Portfolio Quality Insured Insured Total AAA — 24,373 25,397 Q2 2023 AA — 32,333 31,614 Single-family residential — — — A — 55
Slide 16: Capital Structure
Q2 2023 Quarterly Information Package Lifeco Capital Structure (C$MM) 2023 2022 2023 2022 LIABILITIES Q2 Q1 Q4 EQUITY Q2 Q1 Q4 Short-term Non-Controlling Interests Commercial paper and other short-term debt instruments, unsecured — 135 135 Non-controlling interest in capital stock & surplus — 190 15
Slide 17: Fee and Other Income
Q2 2023 Quarterly Information Package Lifeco Fee and Other Income (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Fee and other income Canada Workplace Solutions — 228 219 189 205 209 228 414 822 Individual Wealth Management — 90 88 90 89 93 90 182 360 Corporate — 7 6 8 8 8 7 16 30
Slide 18: Operating and Administrative Expenses
Q2 2023 Quarterly Information Package Lifeco Operating and Administrative Expenses1 (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Operating and administrative expenses Salaries and other employee benefits — 1,130 1,113 1,048 1,027 960 1,130 1,987 4,148 General and administrative —
Slide 19: Canada - Drivers of Earnings - Common Shareholders
Q2 2023 Quarterly Information Package Canada - Drivers of Earnings - Common Shareholders (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Expected insurance earnings — 330 324 318 329 317 330 646 1,288 Risk adjustment release — 33 33 31 33 31 33 64
Slide 20: Canada - Assets Under Administration
Q2 2023 Quarterly Information Package Canada – Assets Under Administration1 (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Workplace Solutions1 Beginning — 58,817 55,886 56,112 61,419 63,081 58,817 63,081 63,081 Net asset flows — 418 186 203 86 541 418 627 1,016 Market impacts & ot
Slide 21: Canada - Sales, Net Book Premiums and CSM
Q2 2023 Quarterly Information Package Canada – Sales, Net Book Premiums and CSM (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Group Life & Health book premiums1 Beginning — 12,155 11,955 11,808 11,645 11,314 12,155 11,314 11,314 New sales — 178 108 107 98 205 178 303 518 Terminati
Slide 22: United States - Drivers of Earnings - Common Shareholders
Q2 2023 Quarterly Information Package United States - Drivers of Earnings - Common Shareholders (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Expected insurance earnings — 18 18 19 21 8 18 29 66 Risk adjustment release — 1 1 1 2 1 1 3 5 CSM reco
Slide 23: U.S. - Empower Defined Contribution
Q2 2023 Quarterly Information Package Lifeco U.S. – Empower Defined Contribution (US$MM, unless otherwise stated) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Net revenue1 Net investment result — 198 222 186 175 124 198 299 707 Asset-based fee income (net) — 294 270 292 279 235 294 514
Slide 24: U.S. - Empower Personal Wealth
Q2 2023 Quarterly Information Package Lifeco U.S. – Empower Personal Wealth (US$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Net revenue1 Net investment result — 37 35 32 25 14 37 39 106 AUM fees (net) — 64 64 60 60 61 64 121 245 Other fees — 12 10 10 10 5 12 15 35 Total net revenue
Slide 25: U.S. - Asset Management - Other Assets Under Management
Q2 2023 Quarterly Information Package Lifeco U.S. – Asset Management – Other Assets Under Management 1,2 (US$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 PanAgora Institutional Beginning — 31,880 30,355 33,489 41,317 43,409 31,880 43,409 43,409 Net asset flows — (589) (675) (497) (1
Slide 26: Europe - Drivers of Earnings - Common Shareholders
Q2 2023 Quarterly Information Package Europe - Drivers of Earnings - Common Shareholders (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Expected insurance earnings — 172 164 153 157 170 172 327 644 Risk adjustment release — 27 28 30 30 33 27 63 1
Slide 27: Europe - Assets Under Administration
Q2 2023 Quarterly Information Package Europe – Assets Under Administration1 (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Workplace Solutions1 Beginning — 32,975 30,325 30,449 33,312 34,998 32,975 34,998 34,998 Net asset flows 157 194 359 239 801 157 1,040 1,593 Market impacts & o
Slide 28: Europe - Sales, Net Book Premiums and CSM
Q2 2023 Quarterly Information Package Europe – Sales, Net Book Premiums and CSM (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Group Life & Health book premiums1 Beginning — 2,125 1,990 2,051 2,128 2,117 2,125 2,117 2,117 New sales — 44 36 37 45 48 44 93 166 Terminations — (63) (26
Slide 29: Capital and Risk Solutions - Drivers of Earnings
Q2 2023 Quarterly Information Package Capital and Risk Solutions - Drivers of Earnings - Common Shareholders (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Expected insurance earnings — 193 194 185 187 183 193 370 749 Risk adjustment release — 48
Slide 30: Capital and Risk Solutions - Run-Rate Insurance Results and CSM
Q2 2023 Quarterly Information Package Capital and Risk Solutions – Run-Rate Insurance Results and CSM (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Run-rate insurance results CSM recognized for services provided — 39 41 37 38 36 39 74 152 Risk adjustment release — 48 51 50 55 59 4
Slide 31: Corporate - Drivers of Earnings - Common Shareholders
Q2 2023 Quarterly Information Package Lifeco Corporate - Drivers of Earnings - Common Shareholders (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Earnings on surplus — 8 8 10 11 7 8 18 36 Base earnings - net investment result — 8 8 10 11 7 8 18 3
Slide 32: Lifeco Drivers of Earnings - Reconciliation
Q2 2023 Quarterly Information Package Lifeco Drivers of Earnings – Reconciliation1 (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) — 659 674 622 784 644 659 1,428 2,724 Base earnings: net investment re
Slide 33: Canada - Reconciliation
Q2 2023 Quarterly Information Package Canada Drivers of Earnings – Reconciliation (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) — 304 305 360 374 275 304 649 1,314 Base earnings: net investment resul
Slide 34: U.S. - Reconciliation
Q2 2023 Quarterly Information Package U.S. Drivers of Earnings – Reconciliation1 (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) — 13 16 17 6 4 13 10 43 Base earnings: net investment result (NIR) — 22
Slide 35: Europe - Reconciliation
Q2 2023 Quarterly Information Package Europe Drivers of Earnings – Reconciliation (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) — 182 164 156 193 173 182 366 686 Base earnings: net investment result
Slide 36: Capital & Risk Solutions - Reconciliation
Q2 2023 Quarterly Information Package Capital & Risk Solutions Drivers of Earnings – Reconciliation (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) — 160 189 89 211 192 160 403 681 Base earnings: net i
Slide 37: Corporate - Reconciliation
Q2 2023 Quarterly Information Package Lifeco Corporate Drivers of Earnings – Reconciliation (C$MM) 2023 2022 YTD YTD Fiscal Q2 Q1 Q4 Q3 Q2 Q1 2023 2022 2022 Drivers of earnings analysis (base) Base earnings: insurance service result (ISR) — — — — — — — — — Base earnings: net investment result (NIR)
Slide 38: Drivers of Earnings - Glossary
Q2 2023 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 39: Drivers of Earnings - Glossary
Q2 2023 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