Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — Investor Presentation (March 2018)
25 slides from Great-West Lifeco's investor presentation, March 2018
Slide 1: Delivering on our Commitments Today and Tomorrow
March 2018 Delivering on our Commitments Today and Tomorrow
Slide 2: Cautionary notes
Cautionary notes 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", "anticipa
Slide 3: Company highlights
Company highlights 1. Leading insurance franchise with substantial geographic and product diversity 2. Proven ability to deliver strong long-term earnings and shareholder returns 3. Strong balance sheet, capitalization, and liquidity 3
Slide 4: Company snapshot
Company snapshot • Global financial services holding company with interests in life and health insurance, retirement and investment services, asset management and reinsurance • Operations in Canada, Europe and the U.S. through Great-West Life, London Life, Canada Life, Irish Life, Great-West Financi
Slide 5: Earnings by geography, channel and product
100% Reinsurance Reinsurance Reinsurance Health US Benefits 80% Group / Wholesale Wealth & Asset Europe Mgmt 60% Annuities 40% Individual / Canada Retail 20% Protection 0% BY GEOGRAPHY 1 BY CHANNEL 2017 BY PRODUCT 2017 Note: Based on Lifeco’s 2017 adjusted earnings of $2.6B, which exclude restructur
Slide 6: Significant benefits from corporate structure
Significant benefits from corporate structure 67.7% Power Financial Corporation relationship facilitates: • Distribution access to IGM platforms • Shared services with IGM Board composition delivers strong 61.5% governance and oversight Note: As of December 31, 2017 6
Slide 7: Key company metrics
Key company metrics(1) Adjusted Earnings(2) $2.6 Holding Company Cash $0.5 Financial Leverage 27.1% Sales $117 Financial Strength Ratings(4) Assets Under Management $699 S&P AA Assets Under Administration $1,350 Moody’s Aa3 Regulatory Capital Ratios Book Value per Share(3) $20.11 MCCSR 241% Market C
Slide 8: Canada overview
Canada overview Adjusted Earnings Sales AUA $1,219 $13,608 $180,150 Individual Customer Group Customer • Individual Life Insurance, Living Benefits • Group Life and Health, Group Wealth and (Critical Illness and Disability Insurance) and Group Creditor products Individual Wealth products • #3 share
Slide 9: Europe & Reinsurance overview
Europe & Reinsurance overview Adjusted Earnings Sales AUA $1,121 $21,938 $255,481 U.K. Ireland Germany Reinsurance • #1 Group Risk • Pension, investment • Pension (including • Traditional and provider savings, protection lifetime GMWB) and Structured Life, products and health individual protection P
Slide 10: Great-West Financial overview
Great-West Financial overview Great-West Empower Individual Markets Investments Business Retirement Life & annuity Asset management • 2nd largest DC record- • A leading provider of • $103B in Great-West keeper with 8.5M executive benefits and Financial AUM or Scale participants single premium life M
Slide 11: Putnam Investments overview
Putnam Investments overview Putnam Putnam PanAgora Business Mutual Funds Institutional Institutional • $79B AUM • $39B AUM • $54B AUM Scale • 168K advisors • 70+ clients worldwide • 150+ clients worldwide • 100+ mutual funds • 50+ institutional • Quantitative investment • Fundamental approach strate
Slide 12: Asset management: diverse platforms managing $699B
Asset management: diverse platforms managing $699B $41B $114B $10B $107B Retail Customers $14B $148B Institutional $68B $104B $93B Note: In Canadian dollars, at December 31, 2017 12
Slide 13: M&A scorecard: strong track record of value creation
M&A scorecard: strong track record of value creation 1997 2003 2007 2013 2014 2016 2017 JP Morgan RPS Strategic acquisition New products / services New customer segments New distribution channels Synergy target NA achieved Integration EPS accretive NA ongoing ROE target NA achieved Earnings 1996 201
Slide 14: Growth strategy
Growth strategy • Strengthen positions in targeted regions: Canada, U.S. and Europe, each with market specific strategies Manage and extend the • Maintain balanced portfolio: Insurance, Asset Management and Retirement core • Leverage strong brands, diverse products and substantial customer base to c
Slide 15: Company highlights
Company highlights 1. Leading insurance franchise with substantial geographic and product diversity 2. Proven ability to deliver strong long-term earnings and shareholder returns 3. Strong balance sheet, capitalization, and liquidity 15
Slide 16: Long track record of consistent execution
Long track record of consistent execution Operating Earnings C$M $3,000 Empower 25% Putnam launch $2,500 Irish Life 20% $2,000 15% Canada Life $1,500 10% $1,000 London Life 5% $500 $- 0% Earnings ROE Note: 2016 and 2017 operating earnings are adjusted for restructuring charges; 2017 is also adjusted
Slide 17: Stable trend over the years
Stable trend over the years (C$m) Experience Gains (Losses), Management Actions, and Changes in Assumptions as a % of Net Income Before Tax 2005-2017 13 Year Average 20.8% Note: Experience Gains (Losses), Management Actions, and Changes in Assumptions exclude Putnam for 2008-2012; include Putnam for
Slide 18: Consistent earnings and dividend growth
Consistent earnings and dividend growth Dividends per share Earnings per share (operating) 2.77 2.71 2.68 2.55 2.41 2.30 2.02 2.10 2.05 2.11 1.92 2.00 1.83 1.72 1.50 1.27 1.11 1.47 1.38 0.86 1.20 1.23 1.23 1.23 1.23 1.23 1.23 1.30 0.72 1.06 0.59 0.93 0.49 0.81 0.69 0.56 0.47 0.33 0.39 0.19 0.22 0.27
Slide 19: Returning value to shareholders
Returning value to shareholders(1) 1997 2017 CAGR Earnings per share(2) $0.49 $2.68 9% Dividends per share $0.19 $1.47 11% Share price $9.63 $35.10 7% $100 Invested(3) $100 $556 9% Consistent shareholder returns over many years 1. Data adjusted for historical share splits 2. Adjusted earnings per sh
Slide 20: Company highlights
Company highlights 1. Leading insurance franchise with substantial geographic and product diversity 2. Proven ability to deliver strong long-term earnings and shareholder returns 3. Strong balance sheet, capitalization, and liquidity 20
Slide 21: Solid capital base with substantial excess capital
Solid capital base with substantial excess capital • Track record of maintaining a substantial capital buffer • Lifeco cash of $0.5B not included in MCCSR ratio • Dividend payout ratio above 45% for the past 10 years 238% 240% 241% 223% 224% The Great-West Life Assurance Company Internal Target MCCS
Slide 22: Efficient capital structure
Efficient capital structure Senior Debentures Subordinated Debentures Great-West Lifeco Lifeco Preferred Shares Inc. Finance I&II Euro Senior Debt $865m $1.6b $500m U.S. Senior Debt $2.7b $1.5b Short-term borrowings by subsidiaries Capital Trust Securities The Great-West Life Great-West Life & Putna
Slide 23: Strong liquidity and credit profile
Strong liquidity and credit profile Strong Liquidity & Credit Ratings Profile Well Laddered Senior Debt Maturity Profile (C$ million) Senior Debentures GWL Lifeco Euro Senior Debt Financial Strength Ratings (Opco) (Holdco) $865 $752 $749 A.M. Best A+ DBRS AA A (high) $500* $500 $400 Fitch AA A $342
Slide 24: Conservative investment policy
Conservative investment policy (1) (1) Lifeco Invested Assets Bond Portfolio by Credit Rating $175.8 billion $128.1 billion Cash & Loans to CD's Investment BB & Lower Policyholders 2% Properties BBB 1% 5% 2% 17% AAA 20% Stocks 5% Mortgages 13% A AA Bonds 34% 28% 73% • Asset portfolio predominantly f
Slide 25: Delivering on our Commitments Today and Tomorrow
March 2018 Delivering on our Commitments Today and Tomorrow
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