Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — Investor Presentation (March 2019)
24 slides from Great-West Lifeco's investor presentation, March 2019
Slide 1: Investor Presentation March 2019
INVESTOR PRESENTATION MARCH 2019
Slide 2: Cautionary notes
Cautionary notes CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION This document may contain forward-looking information. Forward-looking information includes statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "antic
Slide 3: Company highlights
Company highlights Leading insurance franchise with geographic and product diversity Proven ability to generate strong and stable long-term earnings 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: Diversified across geographies, channels and products
Diversified across geographies, channels and products 2018 Net Earnings $3.0B 100% Reinsurance Reinsurance Reinsurance 12% 12% 12% US Health Benefits 80% 13% 11% Group / Wholesale Wealth & Asset 36% Mgmt Europe 22% 60% 32% Annuities 17% 40% Individual / Retail Canada 52% Protection 20% 43% 38% 0% 1
Slide 6: Significant benefits from corporate structure
Significant benefits from corporate structure 67.8%1 Power Financial Corporation relationship facilitates: • Distribution access to IGM platforms • Shared services with IGM Board composition delivers strong 61.4% governance and oversight Note: As of December 31, 2018 1. IGM also owns 4% of Great-Wes
Slide 7: Key company metrics
Key company metrics Net Earnings $3.0 Holding Company Cash $1.0 ROE 14.0% Financial Leverage 27.1% $144 Financial Strength Ratings 2 Sales1 S&P AA Assets Under Management1 $709 Moody’s Aa3 Assets Under Administration1 $1,399 Regulatory Capital Ratios Book Value per Share $22.08 LICAT2 140% Market Ca
Slide 8: Canada
Canada Net Earnings Sales AUA $1,275 $13,186 $180,735 Individual Customer Group Customer • Individual Life Insurance, Living Benefits • Group Life and Health, Wealth and (Critical Illness and Disability Insurance) and Group Creditor products Wealth savings and income products • #1 in group life and
Slide 9: Europe & Reinsurance
Europe & Reinsurance Net Earnings Sales AUA $1,311 $24,481 $266,241 U.K. Ireland Germany Reinsurance • Market leader in • Irish Life is • Pension (including • Traditional and group life and Ireland’s largest life lifetime GMWB) and structured life, income protection assurance company individual prot
Slide 10: U.S. – Great-West Financial & Putnam
U.S. – Great-West Financial & Putnam Net Earnings Sales AUA $388 $105,948 $951,897 Great-West Financial Putnam Investments Empower Retirement • Retail mutual funds and institutional asset management; AUM of US$160B • #2 defined contribution (DC) recordkeeper with 8.8M participants and AUA of US$516B
Slide 11: Sale of U.S. individual life and annuity business
• On January 24, 2019, Great-West Lifeco announced an agreement by its subsidiary, Great-West Life & Annuity Insurance Company, to sell, via reinsurance, substantially all of its U.S. individual life insurance and annuity business1 • The transaction is expected to close in the second quarter of 2019
Slide 12: Diverse asset management platforms $709B AUM
Diverse asset management platforms $709B AUM Retail Customers Institutional Note: In Canadian dollars, at December 31, 2018 12
Slide 13: History of value creation through M&A
History of value creation through M&A 1997 2003 2007 2013 2014 2016 2017 2018 JP Morgan RPS Strategic acquisition New products / services New customer segments New distribution channels Synergy target NA NA achieved Integration EPS accretive X NA ongoing NA ROE target achieved X NA NA 13
Slide 14: Company highlights
Company highlights Leading insurance franchise with geographic and product diversity Proven ability to generate strong and stable long-term earnings Strong balance sheet, capitalization and liquidity 14
Slide 15: Adjusted Net Earnings and Adjusted ROE
Adjusted Net Earnings1 (C$M) $3,500 30% Empower launch $3,000 Putnam 25% $2,500 Irish Life 20% $2,000 Canada Life 15% $1,500 10% $1,000 London Life $500 5% $- 0% Adjusted Net Earnings Adjusted ROE 1. Adjusted net earnings and adjusted ROE are non-IFRS measures. Please refer to the Company’s Annual R
Slide 16: Stable earnings and dividend growth
Stable earnings and dividend growth Dividends per share (C$) Adjusted net earnings per share1(C$) 3.05 2.77 2.71 2.68 2.55 2.41 2.30 2.11 2.02 2.10 2.00 2.05 1.83 1.92 1.72 1.50 1.27 1.56 1.10 1.47 1.38 1.30 0.86 1.20 1.23 1.23 1.23 1.23 1.23 1.23 0.72 1.06 0.59 0.93 0.81 0.69 0.56 0.47 0.22 0.27 0.
Slide 17: Returning value to shareholders
Returning value to shareholders(1) 1998 2018 CAGR Earnings per share(2) $0.59 $3.05 9% Dividends per share $0.22 $1.56 10% Share price $13.00 $28.18 4% $100 Invested(3) $100 $453 8% Consistent shareholder returns over many years 1. Data adjusted for historical share splits 2. Adjusted net earnings p
Slide 18: Company highlights
Company highlights Leading insurance franchise with geographic and product diversity Proven ability to generate strong and stable long-term earnings Strong balance sheet, capitalization and liquidity 18
Slide 19: Strong regulatory capital position
Strong regulatory capital position Regulatory Capital Ratios GWL LICAT Ratio OSFI Minimum 90% Total Regulatory Capital Available Regulatory Required Capital OSFI Supervisory Target 100% $26.8 Billion GWL Target Range 110% – 120% $19.2 Billion GWL Ratio 140% 140% GWL’s1 consolidated LICAT ratio is
Slide 20: Substantial issuer bid
Substantial issuer bid • On March 4, 2019, Great-West Lifeco (Lifeco) announced a substantial issuer bid (the Offer) for up to $2 billion of its common shares • The Offer is being made by way of a “modified Dutch auction” which allows each Lifeco shareholder to select the price within the specified
Slide 21: Strong liquidity and credit profile
Strong liquidity and credit profile Strong Liquidity & Credit Ratings Profile Well Laddered Senior Debt Maturity Profile Senior Debentures (incl. Lifeco guaranteed debt) (C$M) GWL Lifeco Financial Strength Ratings Euro Senior Debt (Opco) (Holdco)* $902 $934 A.M. Best A+ $778 $774 DBRS AA A (high) $6
Slide 22: Efficient capital structure
Efficient capital structure Senior Debentures Lifeco Subordinated Debentures Finance LP Preferred Shares Great-West Lifeco $934m Euro Senior Debt Inc. Lifeco U.S. Senior Debt $1.9b Finance $2.7b Short-term borrowings $1.6b 2018, LP by subsidiaries $1,078m Capital Trust Securities The Great-West Life
Slide 23: Conservative investment policy
Conservative investment policy Lifeco Invested Assets1 Bond Portfolio by Credit Rating1 $184.4 billion $131.8 billion Loans to Cash & CD's Investment BB & Lower Policyholders 2% Properties 1% 5% 3% BBB AAA 20% 18% Stocks 5% Mortgages 14% AA 28% Bonds A 71% 33% • Asset portfolio predominantly fixed i
Slide 24: Investor Presentation March 2019
INVESTOR PRESENTATION MARCH 2019
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