Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Q2 2025 Earnings Presentation
41 slides from Great-west Lifeco's earnings presentation, Aug 6, 2025
Slide 1: Quarterly Results Presentation
Great-West Lifeco Quarterly Results Presentation August 6, 2025
Slide 2: Cautionary Notes
Q2 2025 Cautionary Notes CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION From time to time, Lifeco makes written and/or oral forward-looking statements within the meaning of applicable securities laws, including in this presentation. In addition, in the course of the Company’s Q2 2025 earnings
Slide 3: Conference call participants
Q2 2025 Conference call participants PRESENTERS David Harney Jon Nielsen Ed Murphy President & CEO EVP & Chief Financial Officer President and CEO, Empower 3 Q&A PARTICIPANTS Fabrice Morin Lindsey Rix-Broom President & COO, Canada CEO, Europe GREAT-WEST LIFECO Jeff Poulin Linda Kerrigan CEO, Reinsur
Slide 4: Business Overview
Business Overview David Harney President & CEO Great-West Lifeco
Slide 5: Key messages
Q2 2025 Key messages Strong momentum on strategic actions shared at Investor Day 2025 Leadership changes reflect bench strength and ability to attract external talent 5 Delivered another record quarter of base earnings Customer innovation supporting double-digit base earnings growth at Empower Incre
Slide 6: Our proven strategic playbook continues to drive growth
Q2 2025 Our proven strategic playbook continues to drive growth Strategic Playbook 6 Build leading franchises in Focus on attractive market Invest to strengthen Capital and risk discipline stable markets sectors market leadership reinforce stability and grow • Recognized brands • Wealth • Drive scal
Slide 7: A clear set of priorities to accelerate momentum
Q2 2025 A clear set of priorities to accelerate momentum Priorities 7 Digital Driven Accelerating Customer First, Powered by 1 2 Future 3 Operational 4 Always Talent Leveraging AI Excellence GREAT-WEST LIFECO
Slide 8: Playbook and priorities backed by favourable tailwinds
Q2 2025 Playbook and priorities backed by favourable tailwinds Favourable tailwinds Demographic Socioeconomic Growing need for advice in Aging population expanding the underserved mid-to-affluent need for retirement income 8 segments Commercial Public Policy Governments face constrained Corporates i
Slide 9: Q2 2025 financial highlights
Q2 2025 Q2 2025 financial highlights Base Earnings1 Base ROE1 Base EPS1 Total client assets1 $1,149M 17.4% $1.24 $3.0T Up 11% YoY Up 0.2pp YoY Up 12% YoY Up 12% YoY2 Net Earnings Net ROE2 Net EPS AUMA1 $894M 14.9% $0.96 $1.0T 9 Share repurchases of LICAT ratio3 Leverage Ratio4 Lifeco Cash $432M YTD5
Slide 10: Continued underlying strength in Wealth & Retirement
Q2 2025 Continued underlying strength in Wealth & Retirement Lifeco - Retirement Lifeco - Wealth Base earnings1 Base earnings1 (C$M) (C$M) +15% +12% +13% in CC2 179 +1% Credit impacts and fee income 41 adjustment in 2Q24 156 10 0% in CC2 10 289 293 2Q24 2Q25 2Q24 2Q25 • Retirement base earnings grew
Slide 11: Solid momentum across insurance businesses
Q2 2025 Solid momentum across insurance businesses Lifeco - Group Benefits Lifeco - Insurance & Risk Solutions Base earnings1 Base earnings1 (C$M) +17% (C$M) +9% +15% in CC2 250 +5% in CC2 370 340 214 11 2Q24 2Q25 2Q24 2Q25 • Canada Group Benefits base earnings up 19% YoY, reflecting strong long- •
Slide 12: Empower
Empower Ed Murphy President and CEO, Empower
Slide 13: Empower: Well positioned on the back of double-digit client asset growth
Q2 2025 Empower: Well positioned on the back of double-digit client asset growth Base Earnings1 (bars) and Net Earnings (diamonds) (US$M) Highlights +13% +1% • Base earnings grew 13% excluding credit-related impacts 37 Credit impacts and fee income of US$37M in 2Q25 and US$29M in 2Q24, and a 7 adjus
Slide 14: Expanded product offering enhances Empower's competitiveness
Q2 2025 Expanded product offering enhances Empower’s competitiveness Empower S&P 500® Index Separate Account Consumer Directed Health Industry first with wide accessibility Integrated health and wealth solutions in index assets held on Empower held in U.S. Health Savings ~$200B1 Retirement platform
Slide 15: Financial Highlights
Financial Highlights Jon Nielsen EVP & Chief Financial Officer, Great-West Lifeco
Slide 16: Market rebound since April bodes well for H2 2025
Q2 2025 Market rebound since April bodes well for H2 2025 Total Returns1 2Q25 1.40 In-quarter average Change 1.35 1.30 2Q25 vs. 2Q25 vs. 2Q24 1Q25 1.25 Market Indices 1.20 S&P 500 9% (3%) 16 S&P / TSX Composite 16% 1% 1.15 MSCI Europe 3% (1%) 1.10 BBG US Agg. Bond 5% 1% 1.05 Currency 1.00 USD/CAD 1%
Slide 17: Double-digit base earnings growth exceeded our medium-term objective
Q2 2025 Double-digit base earnings growth exceeded our medium-term objective Base Earnings1 (bars) and Net Earnings (diamonds) Base ROE1 (bars) and Net ROE (diamonds) (C$M) +11% +0.2pp +8% in CC2 1,149 17.2% 17.4% 1,038 16.2% 1,005 14.9% 894 17 2Q24 2Q25 2Q24 2Q25 GREAT-WEST LIFECO • Base earnings d
Slide 18: Lifeco credit experience has been strong over the last decade
Q2 2025 Lifeco credit experience has been strong over the last decade Credit Experience: 10-year history (post-tax, basis points of average non-participating fixed income assets1) 5 bps 0 bps 0 bps 0 bps 18 (1 bps) (1 bps) (1 bps) 10-year average: (3 bps) (3 bps) (3 bps) (4 bps) (5 bps) (5 bps) (6 b
Slide 19: Canada: Solid performance across businesses; continued Group Benefits momentum
Q2 2025 Canada: Solid performance across businesses; continued Group Benefits momentum Base Earnings1 (bars) and Net Earnings (diamonds) (C$M) Highlights +4% • Solid performance across business lines, partly offset by 360 375 lower earnings on surplus 373 255 Retirement and Wealth • Higher average c
Slide 20: Europe: Wealth business drives strong base earnings growth
Q2 2025 Europe: Wealth business drives strong base earnings growth Base Earnings1 (bars) and Net Earnings (diamonds) (C$M) Highlights +11% • Excluding earnings on surplus, base earnings grew at +4% in CC2 262 double-digits in constant currency 236 231 • Growth in Wealth client assets from favourable
Slide 21: CRS: Continued strength in Capital Solutions new business volumes
Q2 2025 CRS: Continued strength in Capital Solutions new business volumes Base Earnings1 (bars) and Net Earnings (diamonds) (C$M) Highlights +15% • Double-digit earnings growth in Q2 2025 driven by +12% in CC2 229 strong Capital Solutions new business volume and 199 improved experience in Risk Solut
Slide 22: Lifeco expense efficiency continues to improve
Q2 2025 Lifeco expense efficiency continues to improve Efficiency Ratio1 (%) -80 bps 57.5% Transformation initiatives • Initiatives presented at Investor Day 2025 aimed at reducing Efficiency Ratio to below 50% over the medium term 22 • Associated business transformation charges expected to be in th
Slide 23: Strong capital and cash generation contribute to flexibility
Q2 2025 Strong capital and cash generation contribute to flexibility Base Capital Generation1, 2Q25 Free Cash Flow2 by quarter (C$M and % of Base Earnings, Trailing four quarters) (C$M) 1,387 4,355 4 quarter average 1,047 >80% 998 incl. withheld cash: 1,033 23 701 Cash withheld for 680 upcoming 3Q25
Slide 24: Strong capital position provides substantial financial flexibility
Q2 2025 Strong capital position provides substantial financial flexibility LICAT Ratio1 Financial Leverage2 Lifeco Cash (C$B) 132% 130% 130% 29% 2.5 28% 28% 2.1 24 1.0 2Q24 1Q25 2Q25 2Q24 1Q25 2Q25 2Q24 1Q25 2Q25 GREAT-WEST LIFECO • LICAT up 2pp QoQ due to strong base capital generation, partially o
Slide 25: Closing Remarks
Closing Remarks David Harney President & CEO Great-West Lifeco
Slide 26: Key messages
Q2 2025 Key messages Strong momentum on strategic actions shared at Investor Day 2025 Leadership changes reflect bench strength and ability to attract external talent 26 Delivered another record quarter of base earnings Customer innovation supporting double-digit base earnings growth at Empower Incr
Slide 27: Q&A
27 GREAT-WEST LIFECO Q2 2025 Q&A
Slide 28: Appendix
28 GREAT-WEST LIFECO Q2 2025 Appendix
Slide 29: Lifeco's medium-term objectives
Q2 2025 Lifeco’s medium-term objectives Base EPS Base Capital Base ROE1 Base earnings growth1 Generation1 Dividend Payout Ratio1 Objectives 8-10% 80%+ 19%+ 45-55% 29 Prior objectives 8-10% N/A 16-17% 45-55% GREAT-WEST LIFECO Potential to outperform base EPS growth through accretive deployment of exc
Slide 30: Invested Assets
Q2 2025 Invested Assets Conservative investment portfolio, predominantly comprised of fixed income instruments – 98% of which are investment-grade • Invested assets of ~$244.5B Invested Asset Distribution Bond Portfolio Quality • Bonds represent 69% Investment Properties Cash and CD's – 98% are inve
Slide 31: Diversified investment portfolio with resilient commercial mortgage portfolio
Q2 2025 Diversified investment portfolio with resilient commercial mortgage portfolio Lifeco Invested Assets Lifeco Mortgage Portfolio (excluding Participating Account) (excluding Participating Account) Cash and CDs Commercial - Other Single Family Investment properties Gov’t and 6% Agency Bonds 6%
Slide 32: Lifeco Consolidated Bond Portfolio
Q2 2025 Lifeco Consolidated Bond Portfolio % OF INVESTED ASSETS Gov't, Gov't Related and Agency Corporate and Non-Agency Country of Domicile Securitized Bonds Securitized Bonds Total Bonds U.S. 3.4% 26.7% 30.1% Canada 7.5% 9.1% 16.6% U.K. 5.1% 6.5% 11.6% Germany 0.7% 1.1% 1.8% 32 Ireland 0.1% 0.4% 0
Slide 33: Corporate and Non-Agency Securitized Bonds
Q2 2025 Corporate and Non-Agency Securitized Bonds Sector Diversification Corporates % of Invested Assets Non-Agency Securitized % of Invested Assets Electric Utilities 7.5% CMBS 1.6% Consumer Products 6.5% RMBS 0.1% Industrial Products 5.2% Other ABS 4.8% Financial Services 3.7% Total Non-Agency Se
Slide 34: Lifeco Mortgage Exposures
Q2 2025 Lifeco Mortgage Exposures (C$m) Carrying Value Mortgage Holdings by Segment % of Canada Canada Property Type Total U.S. Europe CRS Insured Non-insured LTV1 DSCR2 WALT3 Lifeco IA Par Non-Par 1,046 0.4% 810 236 212 834 Single Family - - - 5,387 2.2% 617 1,451 2,659 660 - 5,387 Equity Release -
Slide 35: Lifeco Non-Fixed Income Portfolio
Q2 2025 Lifeco Non-Fixed Income Portfolio (C$m) Carrying Value Equity Portfolio by Segment % of Canada NFI Portfolio by Type Total Canada Par U.S. Europe CRS Lifeco IA Non-Par Investment Properties Industrial 2,718 1.1% 2,002 284 - 432 - Office 1,583 0.6% 914 160 16 493 - Multi Family 2,087 0.9% 1,7
Slide 36: Empower: Diversified earnings streams
Q2 2025 Empower: Diversified earnings streams Empower 2Q25 net fee and spread income1 Empower 2Q25 ending client asset composition (Retirement) 27% 27% 36 50% 53% 20% 23% GREAT-WEST LIFECO Asset-based fee income Spread Income Other fee income U.S. Equities Foreign & Capital preservation & other equi
Slide 37: Contractual Service Margin (CSM)
Q2 2025 Contractual Service Margin (CSM) Total CSM (C$M) CSM (C$M), excluding segregated funds and par 117 45 207 13,802 59 117 7,150 48 7,153 13,666 15 13,607 14 7,098 7 (308) (12) (170) 37 Beginning Impact of Expected CSM Insurance CSM with Assumption Impacts of Ending Beginning Impact of Expected
Slide 38: Reconciliation of Base Earnings to Net Earnings
Q2 2025 Reconciliation of Base Earnings to Net Earnings 2Q25 Earnings Reconciliation (Post-tax, C$M) 1,149 22 Public equity markets Real estate & other non-fixed income Interest rate & other (51) (75) 38 (104) (121) (38) 894 (3) 11 Base Earnings1 Market experience2 Business Amortization Assumption c
Slide 39: Non-GAAP Financial Measures and Ratios
NON-GAAP FINANCIAL MEASURES AND RATIOS This document contains some non-Generally Accepted Accounting Principles (GAAP) financial measures and non-GAAP ratios as defined in National Instrument 52-112 “Non-GAAP and Other Financial Measures Disclosure”. Non-GAAP financial measures and ratios are used t
Slide 40: Endnotes
ENDNOTES All references to the Company’s Q2 2025 MD&A in the below footnotes are to the Company’s management’s discussion and analysis for the periods ended June 30, 2025, which is available on SEDAR+ at www.sedarplus.com. Slide 9 2. Additional information regarding this metric has been incorporated
Slide 41: Endnotes
ENDNOTES Slide 34 1. Loan-To-Value; Calculated on conventional mortgages (non-insured) only. 2. Debt Service Coverage Ratio; Calculated on conventional mortgages (non-insured) only. 3. Weighted Average Lease Term Slide 38 2. Additional information regarding this metric is incorporated by reference a