Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Investor Day (June 2022)
15 slides from Great-west Lifeco's investor day presentation, Jun 28, 2022
Slide 1: IFRS 17 Information Session
IFRS 17 Information Session June 28th 2022
Slide 2: Cautionary notes
Cautionary notes CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION This presentation and conference call may reference 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
Slide 3: Paul Mahon, President & CEO
Paul Mahon President & CEO Great-West Lifeco 3
Slide 4: Great-West Lifeco not anticipating material financial impacts; business strategy unchanged
Great-West Lifeco is not anticipating material financial impacts and its business strategy remains unchanged with the transition to IFRS 17 Great-West Lifeco business strategy not impacted by IFRS 17 Businesses representing over 70% of base earnings1 expected to see limited or no impact Shareholders
Slide 5: Garry MacNicholas, EVP & CFO
Garry MacNicholas EVP & CFO Great-West Lifeco 5
Slide 6: Limited or no impact expected from IFRS 17 to businesses representing over 70% of base earnings
Limited or no impact expected from IFRS 17 to businesses representing over 70% of base earnings Mix of Impact on Type of business Products Business 1 Earnings Workplace savings, Individual Wealth and Asset Management retirement accounts, Mutual funds 35% No Impact Group life and health, IFRS 17 is e
Slide 7: IFRS 17 does not impact the higher growth U.S. segment, modest impacts in other segments
IFRS 17 does not impact the higher growth U.S. segment, modest impacts expected in other segments Canada U.S. Europe CRS Moderate impact No impact1 Limited impact Moderate impact • Group Wealth business • Empower (including • Limited impact on UK • Limited impact on is not impacted Personal Capital)
Slide 8: Medium-term financial objectives: base EPS growth and payout unchanged; base ROE increased
Medium-term financial objectives: base EPS growth objective and target dividend 1 payout ratio unchanged; base ROE objective increased by 2% on transition 2 target dividend 8-10% base EPS growth p.a 3 . 16-17% base ROE 3 45-55% payout ratio (base earnings)3 • Modest transitional impact to the • Dive
Slide 9: Dervla Tomlin, EVP & Chief Actuary
Dervla Tomlin EVP & Chief Actuary Great-West Lifeco 9
Slide 10: Overview of change in insurance contract liability on transition
Overview of change in insurance contract liability on transition IFRS 4 IFRS 17 Liability1 Liability1 Contractual Service Margin3 (CSM) is a new liability that reflects CSM deferred profits. CSM is released into earnings as insurance Insurance PfADs2 contracts are fulfilled as expected. Risk Adjustm
Slide 11: Shareholders' equity expected to reduce by 10 to 15% on transition
Shareholders’ equity expected to reduce by 10 to 15% on transition Impact on Shareholders’ Equity (illustrative, not to scale) • Establishment of the CSM related to in force business is the main driver of the decrease in shareholders’ equity • A meaningful portion of the new CSM is Provisions no lon
Slide 12: Base earnings expected to decrease by low single-digits on transition to IFRS 17
Base earnings 1 expected to decrease by low single-digits on transition to IFRS 17; base earnings trajectory unchanged Base earnings impact on transition Base earnings growth under IFRS 17 • Modest transitional impact to the level of base • No material change to base earnings trajectory earnings1 •
Slide 13: IFRS 17 liability discount rates generally set using yields on our own assets
IFRS 17 liability discount rates are generally set using yields derived by designating our own assets as the reference portfolios The yields on our own assets1 are used to set the IFRS 17 liability discount rate for Liability portfolios where these portfolios: supporting assets reflect the duration
Slide 14: Conclusion
Conclusion Financial strength maintained Low impact on base earnings Medium-term financial objectives reconfirmed No impact to business strategy 14
Slide 15: Questions
QUESTIONS 15