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July 31, 2019

2nd Quarter 2019 Results

Great-West Lifeco announced net earnings attributable to common shareholders (net earnings) of $459 million or $0.49 per common share for the second quarter of 2019 compared to $831 million or $0.84 per common share for the same quarter last year.  Lifeco’s net earnings for the second quarter of 2019 included a net charge of $199 million relating to the sale, via indemnity reinsurance, of the U.S. individual life insurance and annuity business, which reduced earnings per common share by $0.21.

“We continued to make progress on our strategic priorities in the quarter and business fundamentals remained solid despite the decline in net earnings,” said Paul Mahon, President and Chief Executive Officer, Great-West Lifeco Inc. “We continue to invest in new products and digital capabilities to drive better customer and advisor experiences and our capital position remains strong.”

Highlights

Sales up $1.2 billion to $34.3 billion

  • Sales for the second quarter of 2019 were $34.3 billion, up 4% from the second quarter of 2018, primarily driven by higher sales in Europe.

U.S. Individual Markets business sale closed on June 1, 2019

  • On June 1, 2019, the Company’s subsidiary, Great-West Life & Annuity, completed the sale, via indemnity reinsurance, of substantially all of its individual life insurance and annuity business to Protective Life Insurance Company (Protective Life). The transaction value of $1.6 billion frees up capital and allows the Company to focus on the defined contribution retirement and asset management markets in the U.S. segment.

Capital strength and financial flexibility maintained

  • On April 17, 2019, the Company purchased and subsequently cancelled 59,700,974 common shares under a substantial issuer bid at a price of $33.50 per share for an aggregate purchase price of $2 billion.  The excess paid over the average carrying value under the Offer was $1,628 million and was recognized as a reduction to accumulated surplus.
  • The Great-West Life Assurance Company reported a Life Insurance Capital Adequacy Test (LICAT) ratio of 136% at June 30, 2019 which includes a 6 percent reduction related to the impact of the substantial issuer bid.
  • Adjusted return on equity, which excludes the net charge of $199 million relating to the U.S. sale, was 13.2% for the second quarter of 2019.

 

2nd Quarter 2019 – Webcast and Conference Call