Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — Investor Presentation (2017)
34 slides from Great-West Lifeco's investor presentation, 2017
Slide 1: Delivering on our Commitments Today and Tomorrow
Delivering on our Commitments Today and Tomorrow Investor Presentation
Slide 2: Cautionary Note Regarding Forward-Looking Information
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", "anticipates", "intends",
Slide 3: Key messages
Key messages • Market leadership driven by strong business franchises and brands • Diversified by geography, channel and product type • Experienced and talented management team • History of consistent execution resulting in sustained earnings growth • Growth strategies in place; organic growth compl
Slide 4: Diversified across geographies, channels and products
Diversified across geographies, channels and products EMPLOYEES MARKET REACH SCALE U.S. 7,400 Customers 30M Benefits paid $28B Europe 4,500 Canada 12,500 Advisors 240K AUA $1.2T 2016 EARNINGS $2.6B 100% Reinsurance Reinsurance Reinsurance U.S. Health Benefits 80% Asset Mgmt Group / & Wealth 60% Euro
Slide 5: Significant benefits from corporate structure
Significant benefits from corporate structure (As of June 30, 2017) 67.6% Power Financial Corporation relationship facilitates: • Distribution access to IGM platforms • Shared services with IGM 61.5% Board composition delivers strong governance and oversight 5
Slide 6: A history of delivering strong shareholder returns
A history of delivering strong shareholder returns Operating Earnings C$M Empower $3,000 launch 25% Putnam $2,500 Irish Life 20% $2,000 15% Canada Life $1,500 10% $1,000 TSR: 16% London Life TSR: 5% 5% $500 TSR: 14% $- 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201
Slide 7: Consistent earnings and dividend growth
Consistent earnings and dividend growth Dividends per share Earnings per share (operating) 2.77 2.67 2.55 2.41 2.30 2.10 2.05 2.11 2.02 1.92 2.00 1.83 1.72 1.50 1.27 1.11 1.38 1.23 1.23 1.23 1.23 1.23 1.23 1.30 0.86 1.20 0.72 1.06 0.59 0.93 0.41 0.49 0.81 0.69 0.56 0.39 0.47 0.19 0.22 0.27 0.33 0.15
Slide 8: Returning value to shareholders
Returning value to shareholders1 1996 2016 CAGR Earnings per share $0.41 $2.67 10% Dividends per share $0.15 $1.38 12% Share price $5.31 $35.17 10% $100 Invested2 $100 $1,328 14% 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 2016 Operating Earnings $2.6 Holding Company Cash $1.1 2016 Financial Leverage 28% 2016 Sales $130 Financial Strength Ratings3 Assets Under Management $659 S&P AA Assets Under Administration $1,248 Moody’s Aa3 Regulatory Capital Ratios Book Value per Share2 $19.76 MCCSR 240% Mar
Slide 10: Stable trends
Stable trends MCCSR Ratio Return on Equity (Trailing 4 quarters ) 238% 240% 16.5% 223% 224% 15.7% 15.2% 14.7% 207% 13.8% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Operating Earnings Book Value per Share (C$M) $2,762 $2,546 $2,641 $20.07 $19.76 $15.16 $16.80 $1,946 $2,052 $12.64 2012 2013 201
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 and differentiation Productivity Expense management; operational Competitive unit costs, continuous focus excellence
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 30 million customer relationships
Protection: delivering on promises for over 30 million customer relationships Canada U.S. Europe $9.8B in benefits paid to clients $1.0B in benefits paid to clients $3.9B in benefits paid to clients • $2.4B life insurance benefits to 44K • $790M life insurance benefits to • $1.1B life insurance bene
Slide 17: Asset management: diverse platforms managing $650B+
Asset management: diverse platforms managing $650B+ (C$) $39B $108B $9B $111B Retail Customers $12B $147B Institutional $57B $88B $88B Note: In Canadian dollars, at December 31, 2016 $50B of total sub-contracted to external managers. Canada Life Investments also includes funds managed by Isle of Man
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 Key digital Individual Group Putnam Empower U.K. Ireland Germany strategies advised Digitally connect to advisors and customers Cross-sell to group insurance customers Target marketing using customer / advisor analytics Use social med
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 2016 JP Morgan RPS Strategic acquisition New products / services New customer segments New distribution channels Synergies target achieved Integration complete; Integration EPS accretive transformation ongoing ongoing ROE
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 • Maintain strong and stable capital structure and financial flexibility • Reinvest in Lifeco growth strategy • Organic growth • Strategic acquisitions • Returning value to shareholders • Progressive dividend growth • Opportunistic share repurchases 26
Slide 27: Appendix
APPENDIX 27
Slide 28: Canada overview
Canada overview Scale Relationships AUA $175B Customers 13M+ Net Earnings $1.2B Advisors 25K+ Individual Customer Group Customer • Individual Life Insurance, Living Benefits (Critical • Group Life and Health, Group Wealth and Illness and Disability Insurance) and Individual Group Creditor products W
Slide 29: Europe & Reinsurance overview
Europe & Reinsurance overview Scale AUA $232B Employees 4.6K U.K. Ireland Germany Reinsurance • #1 Group Risk provider • Pension, investment • Pension (including lifetime • Traditional and Structured savings, protection products GMWB) and individual Life, Payout Annuity and • Strong position in reta
Slide 30: U.K. overview
U.K. overview £40B AUA | 3.4M Customers | 1,100 Employees Group Risk Payout Annuity Wealth Management • Life Insurance, Disability • Payout annuities sold to Investment Retirement Accumulation Income and Critical Illness provide guaranteed products products benefits lifetime retirement income • Near
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 • $93B in Great-West over 8M participants executive benefits and Financial AUM or Ma
Slide 32: Putnam: globally diversified asset manager with $152B AUM
Putnam: globally diversified asset manager with $152B AUM Putnam Putnam PanAgora Business Mutual Funds Institutional Institutional • $72B AUM • $37B AUM • $43B AUM Scale • 158K advisors • 70+ clients worldwide • 150+ clients worldwide • 80+ mutual funds • 50 institutional strategies • Quantitative i
Slide 33: Consistent positive experience gains contribute to earnings
Consistent positive experience gains contribute to earnings (C$M) 3,347 3,268 3,133 2,874 2,769 2,499 2,504 2,447 2,576 2,633 2,335 2,237 Experience Gains (Losses), Management Actions and Changes in Assumptions as a % of Net Income Before Tax 12 Year 26% 25% 24% 23% 23% Avg. 20% 19% 20% 20% 21% 18%
Slide 34: Delivering on our Commitments Today and Tomorrow
Delivering on our Commitments Today and Tomorrow Investor Presentation