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May 7, 2025

Great-West Lifeco reports strong first quarter 2025 results, driven by growth in Wealth and Retirement businesses

Great-West Lifeco Inc.’s Quarterly Report to Shareholders for the first quarter of 2025, including its Management’s Discussion and Analysis (MD&A) and consolidated financial statements for the three months ended March 31, 2025, are available at greatwestlifeco.com/financial-reports and sedarplus.comOpens a new website in a new window. Readers are referred to the Basis of presentation, Cautionary note regarding Forward-Looking Information and Cautionary note regarding Non-GAAP Financial Measures and Ratios sections at the end of this release for additional information on disclosures.

All figures are expressed in millions of Canadian dollars, unless otherwise noted.
 

  • Base earnings of $1.0 billion, or $1.11 per share, up 5% from Q1 2024
  • Net earnings from continuing operations of $860 million, or $0.92 per share, down 17% from Q1 2024
  • Base ROE of 17.2% and ROE from continuing operations of 15.6%
  • LICAT ratio of 130% and Lifeco cash of $2.5 billion
  • Book value per share of $27.61, up 12% year over year
  • Repurchased 2.1 million shares, consistent with intention to repurchase $500 million in 2025


Toronto, ON, May 7, 2025 – Great-West Lifeco Inc. (Lifeco or the Company) today announced its Q1 2025 results.

“We delivered strong results in the first quarter, including double-digit base earnings growth in our Retirement and Wealth businesses,” said Paul Mahon, President and CEO, Great-West Lifeco. “Our U.S. segment continues to be the leading driver of this growth, with strong net flows on the back of retirement plan wins and excellent momentum in rollover sales. While market volatility is elevated, the core business continues to perform, and our growth ambitions remain well supported by our strong capital generation and balance sheet.”

Key Financial Highlights

Base earnings1 of $1,030 million or $1.11 per common share in the first quarter, up 5% from $978 million a year ago. The results reflect higher base earnings in our Retirement and Wealth businesses, primarily driven by business growth and higher equity markets compared to a year ago, as well as improved expense efficiency and favourable currency movements. These items were partially offset by lower earnings on surplus, write downs on three mortgage loans totaling $45 million, a claims provision of $21 million related to the California wildfires, and unfavourable mortality experience.

1  This is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details.
2 Base EPS and base return on equity are non-GAAP ratios. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details.
3 Base return on equity and return on equity – continuing operations are calculated using the trailing four quarters of applicable earnings and common shareholders' equity.

Net earnings from continuing operations of $860 million or $0.92 per common share in the first quarter, compared to $1,031 million a year ago primarily reflect unfavourable market experience, particularly lower returns on real estate assets and interest rates.

Highlights

  • Strong underlying performance:
    • Base earnings once again topped $1.0 billion, up 5% year-over-year, driven by double-digit base earnings growth in our Retirement and Wealth businesses.
    • Base ROE exceeded 17% and remains poised to expand, largely owing to stronger growth in our more capital-efficient U.S. business.
    • Strong capital generation contributed to a $370 million increase in cash at Lifeco compared to Q4 2024.
  • Continued repositioning of the portfolio toward higher-growth, capital-efficient businesses, particularly Retirement and Wealth:
    • Total client assets4 exceeding $3.0 trillion, of which more than $1.0 trillion represents higher-margin assets under management or advisement.
    • Strong growth in client assets of 13% across Retirement and Wealth businesses in all markets.
    • Canada Wealth net flows5 improved by more than $300 million compared to a year ago and nearly $200 million from the preceding quarter, in part driven by higher Investment Planning Counsel net flows and strong segregated fund sales.
    • Continued mid-single-digit growth across our Group Benefits businesses as we maintain strong pricing discipline.
  • U.S. segment continued to deliver double-digit earnings growth:
    • U.S. base earnings up 13% year-over-year, driven by growth in average customer account balances, significant retirement plan wins and continued strength in Wealth net flows. U.S. net earnings from continuing operations were up 32% in the quarter compared to the first quarter of 2024.
    • Base ROE of 18.6%, up 50 basis points from Q4 2024. Net ROE from continuing operations of 16.7%, up 90 basis points from Q4 2024.
    • Approximately 270,000 net new plan participants at Empower in Q1 2025, an increase of 1.5% from Q4 2024.
    • Net flows of US$2.8 billion in the Wealth business, largely driven by continued strength in rollover sales, which increased 30% from the prior year.  
  • Disciplined approach to managing the business contributes to the Company’s resilience during periods of market volatility:
    • Strong capital position provides substantial financial flexibility: LICAT ratio of 130% and Lifeco cash of $2.5 billion.
    • Diversified portfolio of businesses, with no operating segment or line of business accounting for more than a third of base earnings6.
    • Significant earnings contribution from sources that are not market-sensitive in our Retirement and Wealth businesses.
    • Prudent investment approach, with 93% fixed income assets, of which 99% is investment grade.
    • Reduced exposure to weather-related catastrophes in our reinsurance business, as underscored by a claims provision of $21 million after-tax in Q1 2025 related to the wildfires in California despite significant insured losses for the industry.

4  This is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details
5  An indicator of the Company's ability to attract and retain business and includes cash flows related to segregated funds and proprietary and non-proprietary mutual funds.
6  Excludes Corporate segment and excludes earnings on surplus, corporate expenses and other within segments

Q1 2025 SEGMENTED OPERATING RESULTS

For reporting purposes, Lifeco’s consolidated operating results are grouped into five reportable segments – Canada, United States, Europe, Capital and Risk Solutions and Corporate – reflecting the management and corporate structure of the Company. For more information, refer to the Company’s first quarter 2025 interim Management’s Discussion and Analysis (MD&A).

7  This is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures and Ratios” section of this document for additional details.
8  The Company has updated segment and line of business classifications for 2025 which has resulted in the restatement of certain comparative amounts.

UNITED STATES

  • U.S. segment base earnings of US$255 million ($365 million) and net earnings from continuing operations of US$237 million ($338 million) – Base earnings increased by US$30 million, or 13%, compared to the first quarter of 2024, primarily due to growth in fee-bearing client assets from higher equity markets and business growth, as well as the impact of cost synergies realized from the integration of Prudential last year. This was partially offset by write downs on three commercial mortgage loans of US$26 million post-tax ($37 million), as well as lower spread income resulting from higher crediting rates compared to a year ago.

CANADA

  • Canada segment base earnings of $316 million and net earnings of $301 million – Base earnings decreased by $24 million, or 7%, compared to the same quarter last year, primarily as a result of lower Contractual Service Margin (CSM) recognized due to actuarial assumption changes in the second half of 2024, less favourable Group Benefits mortality experience, and lower earnings on surplus due to declines in shorter-term yields. These items were partially offset by higher fee income resulting from asset growth in the Retirement and Wealth businesses, as well as organic growth of the Group Benefits in-force block.

EUROPE

  • Europe segment base earnings of $239 million and net earnings of $167 million – Base earnings increased by $13 million, or 6%, compared to the same quarter last year, primarily due to higher fee income from our Wealth business in Ireland, which benefitted from both strong flows and higher equity markets. In addition, Europe segment earnings benefitted from higher CSM recognized, mainly reflecting strong new business volumes in our U.K. bulk annuity business over the past year. These items were partially offset by lower earnings on surplus as a result of remitting capital to Lifeco.

CAPITAL AND RISK SOLUTIONS

  • Capital and Risk Solutions segment base earnings of $213 million and net earnings of $184 million – Base earnings increased by $8 million, or 4%, compared to the same quarter last year as business growth was partially offset by insurance experience losses.  In-quarter experience included a net provision for estimated claims resulting from the impact of the California wildfires of $21 million after-tax as well as unfavourable mortality experience in the U.S. life business.

QUARTERLY DIVIDENDS

The Board of Directors approved a quarterly dividend of $0.61 per share on the common shares of Lifeco payable June 30, 2025, to shareholders of record at the close of business June 2, 2025.

In addition, the Directors approved quarterly dividends on Lifeco's preferred shares, as follows:

First Preferred Shares

Amount, per share

Series G

$0.3250

Series H

$0.30313

Series I

$0.28125

Series L

$0.353125

Series M

$0.3625

Series N

$0.109313

Series P

$0.3375

Series Q

$0.321875

Series R

$0.3000

Series S

$0.328125

Series T

$0.321875

Series Y

$0.28125

For purposes of the Income Tax Act (Canada), and any similar provincial legislation, the dividends referred to above are eligible dividends.

NCIB Share Purchases

The Company previously announced that it intends to purchase $500 million under its current NCIB, in addition to any purchases made to offset dilution under its share compensation plans. These share repurchases are made subject to market conditions, the Company's ability to effect the purchases on a prudent basis, and other strategic opportunities emerging.

In Q1 2025, the Company repurchased 2.1 million shares for $111 million, of which $80 million represented purchases in respect of the additional $500 million intention for 2025.

Q1 2025 Conference Call

Lifeco's first quarter conference call and audio webcast will be held on Thursday, May 8, 2025 at 9:30 a.m. ET.

The live webcast of the call will be available at 1st Quarter 2025 – Conference Call and Webcast or by calling  1-833-752-3481 (toll-free) or  1-647-846-7232 for International participants.

A replay of the call will be available following the event on our website or by calling 1-855-669-9658 (Canada toll-free) or 1-412-317-0088 (U.S. toll-free) and using the access code 9089756.

Selected financial information is attached.
 

GREAT-WEST LIFECO INC.

Great-West Lifeco is a financial services holding company focused on building stronger, more inclusive and financially secure futures. We operate in Canada, the United States and Europe under the brands Canada Life, Empower and Irish Life. Together we provide wealth, retirement, workplace benefits and insurance and risk solutions to our over 40 million customer relationships. As of March 31, 2025, Great-West Lifeco’s total client assets exceeded $3 trillion.

Great-West Lifeco trades on the Toronto Stock Exchange (TSX) under the ticker symbol GWO and is a member of the Power Corporation group of companies. To learn more, visit greatwestlifeco.com.

Basis of presentation

The condensed consolidated interim financial statements for the period ended March 31, 2025 of Lifeco, have been prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise noted and are the basis for the figures presented in this release, unless otherwise noted.

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 release. Forward-looking information includes statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "achieve", "ambition", "anticipate", "believe", "could", "estimate", "expect", "initiatives", "intend", "may", "objective", "opportunity", "plan", "potential", "project", "target", "will" and other similar expressions or negative versions of those words. Forward-looking information includes, without limitation, statements about the Company and its operations, business (including business mix), financial condition, expected financial performance (including revenues, earnings or growth rates, and medium-term financial objectives), strategies and prospects, expected costs and benefits of acquisitions and divestitures (including timing of integration activities and timing and extent of revenue and expense synergies), the timing and extent of expected transformation charges and related expected run-rate base earnings savings, expected expenditures or investments (including but not limited to investment in technology infrastructure and digital capabilities and solutions and investments in strategic partnerships), value creation and realization and growth opportunities, product and service innovation, expected dividend levels, expected cost reductions and savings, expected capital management activities and use of capital, the timing and extent of possible share repurchases, market position, estimates of risk sensitivities affecting capital adequacy ratios, estimates of financial risk sensitivities (including as a result of current market conditions), anticipated global economic conditions, potential impacts of catastrophe events, potential impacts of geopolitical events and conflicts and the impact of regulatory developments on the Company’s business strategy, growth objectives and capital.

Forward-looking statements are based on expectations, forecasts, estimates, predictions, projections and conclusions about future events that were current at the time of the statements and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the financial services industry generally, including the insurance, wealth and retirement solutions industries. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of the Company and there is no assurance that they will prove to be correct. In arriving at our assessment of the Company’s potential exposure to Global Minimum Tax and our expectation regarding the impact on our effective income tax rate and base earnings, management has relied on its interpretation of the relevant legislation.

It has also assumed a starting point of its current mix of business and base earnings growth consistent with management’s base earnings growth ambitions. With respect to possible share repurchases, the amount and timing of actual repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, our ability to effect the repurchases on a prudent basis, capital requirements, applicable law and regulations (including applicable securities laws), and other factors deemed relevant by the Company, and may be subject to regulatory approval or conditions. In all cases, whether or not actual results differ from forward-looking information may depend on numerous factors, developments and assumptions, including, without limitation, the ability to integrate and leverage acquisitions and achieve anticipated benefits and synergies, the achievement of expense synergies and client retention targets from the acquisition of the Prudential retirement business, the Company’s ability to execute strategic plans and adapt or recalibrate these plans as needed, the Company’s reputation, business competition, assumptions around sales, pricing, fee rates, customer behaviour (including contributions, redemptions, withdrawals and lapse rates), mortality and morbidity experience, expense levels, reinsurance arrangements, global equity and capital markets (including continued access to equity and debt markets and credit instruments on economically feasible terms), geopolitical tensions and related economic impacts, interest and foreign exchange rates, inflation levels, liquidity requirements, investment values and asset breakdowns, hedging activities, financial condition of industry sectors and individual issuers that comprise part of the Company’s investment portfolio, credit ratings, taxes, impairments of goodwill and other intangible assets, technological changes, breaches or failure of information systems and security (including cyber attacks), assumptions around third-party suppliers, changes in local and international laws and regulations, changes in accounting policies and the effect of applying future accounting policy changes, changes in actuarial standards, unexpected judicial or regulatory proceedings, catastrophic events, continuity and availability of personnel and third-party service providers, unplanned changes to the Company’s facilities, customer and employee relations, levels of administrative and operational efficiencies, and other general economic, political and market factors in North America and internationally.

The above list is not exhaustive, and there may be other factors listed in the Company’s filings with securities regulators, including those set out in the "Risk Management" and "Summary of Critical Accounting Estimates" sections of the Company’s 2024 Annual MD&A and in the Company's annual information form dated February 5, 2025 under "Risk Factors". These, along with other filings, are available for review at www.sedarplus.com. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to place undue reliance on forward-looking information.

Other than as specifically required by applicable law, the Company does not intend to update any forward-looking information whether as a result of new information, future events or otherwise.

Cautionary note regarding Non-GAAP Financial Measures and Ratios

This release 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”. Terms by which non-GAAP financial measures are identified include, but are not limited to, "base earnings (loss)", "base earnings (loss) (US$)", “base earnings (loss) - pre-tax”, "base earnings: insurance service result", "base earnings: net investment result", "assets under management or advisement", "assets under administration only", "client assets", "non-par base operating and administration expenses", and "run-rate insurance earnings". Terms by which non-GAAP ratios are identified include, but are not limited to, “base earnings per common share (EPS)”, “base return on equity (ROE)”, "base dividend payout ratio", "base capital generation", "efficiency ratio", “effective income tax rate – base earnings – common shareholders” and “pre-tax base operating margin”. Non-GAAP financial measures and ratios are used to provide management and investors with additional measures of performance to help assess results where no comparable GAAP (IFRS) measure exists. However, non-GAAP financial measures and ratios do not have standard meanings prescribed by GAAP (IFRS) and are not directly comparable to similar measures used by other companies. Refer to the "Non-GAAP Financial Measures and Ratios" section in this release for the appropriate reconciliations of these non-GAAP financial measures to measures prescribed by GAAP as well as additional details on each measure and ratio.

For more information:

Media Relations
Tim Oracheski
204-946-8961
media.relations@canadalife.com

Investor Relations
Shubha Khan
416-552-5951
shubha.khan@canadalife.com