Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — BMO Capital Markets 2018 Fixed Income Financial Services Conference
20 slides from Great-West Lifeco's conference presentation, June 2018
Slide 1: BMO Capital Markets 2018 Fixed Income Financial Services Conference
BMO Capital Markets 2018 Fixed Income Financial Services Conference Gord Menzie, SVP, Corporate Finance & Treasury
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 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 4: 2017 Adjusted Net Earnings $2.6B by geography, channel and product
2017 Adjusted Net Earnings $2.6B 100% Reinsurance 7% Reinsurance 7% Reinsurance 7% US Health 13% Benefits 13% 80% Group / Wealth & Asset Wholesale Mgmt Europe 40% 60% 24% 35% Annuities 40% 21% Individual / Canada Retail 20% Protection 45% 53% 35% 0% BY GEOGRAPHY 1 BY CHANNEL 2017 BY PRODUCT 2017 Not
Slide 5: Significant benefits from corporate structure
Significant benefits from corporate structure 67.7%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 March 31, 2018 1. IGM also owns 4% of Great-West L
Slide 6: Key company metrics
Key company metrics Adjusted Net Earnings*(1) $2.6 Holding Company Cash $0.8 Adjusted ROE 13.8% Financial Leverage 27.1% (2) Sales* $117 Financial Strength Ratings S&P AA Assets Under Management $718 Moody’s Aa3 Assets Under Administration $1,392 Regulatory Capital Ratios IFRS equity $26 LICAT(2) 13
Slide 7: Canada overview
Canada overview Adjusted Earnings Sales AUA $1,219 $13,608 $181,881 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 8: Europe & Reinsurance overview
Europe & Reinsurance overview Adjusted Earnings Sales AUA $1,121 $21,938 $271,826 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 9: U.S. – Great-West Financial overview
U.S. – Great-West Financial overview Great-West Empower Individual Markets Investments Business Retirement Life & annuity Asset management • #2 DC record-keeper with • A leading provider of • $103B in Great-West 8.5M participants executive benefits and Financial AUM or Scale • AUA of $534B single pr
Slide 10: U.S. – Putnam Investments overview
U.S. – Putnam Investments overview Putnam Putnam PanAgora Business Mutual Funds Institutional Institutional • $78B AUM • $41B AUM • $51B AUM Scale • 168K advisors • 70+ clients worldwide • 150+ clients worldwide • 100+ mutual funds • 50+ institutional • Quantitative investment • Fundamental approach
Slide 11: Strategic acquisitions track record
1997 2003 2007 2013 2014 2016 2017 JP Morgan RPS Strategic acquisition New products / services New customer segments New distribution channels Synergy target NA achieved Integration EPS accretive NA ongoing ROE target NA achieved 11
Slide 12: Long track record of consistent execution
Long track record of consistent execution Adjusted Net Earnings C$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: Adjusted net earnings is a non-IFRS measure of earnings performance. Adjusted net earnings
Slide 13: Solid capital base with substantial excess capital
Solid capital base with substantial excess capital Regulatory Capital Ratios GWL LICAT Ratio OSFI Minimum 90% Total Regulatory Capital Available Regulatory Required Capital OSFI Supervisory Target 100% $26 Billion GWL Ratio 130% $20 Billion GWL Target Range 110% – 120% 130% The Great-West Life Ass
Slide 14: Strong liquidity and credit profile
Strong liquidity and credit profile Strong Liquidity & Credit Ratings Profile Well Laddered Senior Debt Maturity Profile Senior Debentures (incl. Lifeco guaranteed debt) (C$M) GWL Lifeco Euro Senior Debt Financial Strength Ratings (Opco) (Holdco) $882 $885 $792 $789 A.M. Best A+ $640 DBRS AA A (high
Slide 15: Efficient capital structure
Efficient capital structure Senior Debentures Lifeco Subordinated Debentures Finance I&II Preferred Shares Great-West Lifeco $885m $500m (1) Euro Senior Debt Inc. Lifeco U.S. Senior Debt $1.9b Finance $2.7b Short-term borrowings $1.6b 2018, LP by subsidiaries $1,024m (2) Capital Trust Securities The
Slide 16: Conservative investment policy
Conservative investment policy Lifeco Invested Assets(1) Bond Portfolio by Credit Rating(1) $182.3 billion $132.5 billion Cash & CD's Investment BB & Lower Loans to Properties 1% Policyholders 2% BBB 3% AAA 4% 18% 19% Stocks 5% Mortgages 13% AA A 28% Bonds 34% 73% • Asset portfolio predominantly fix
Slide 17: Financing objectives & activities
Financing objectives & activities • Raise funds at holdco level • Meet capital requirements Great-West Issuance Progression 1,400 • Maintain credit ratings and 1,200 sound capitalization 1,000 800 • Retain appropriate leverage 600 and coverage ratios 400 • Diversify sources of capital 200 - • Mitiga
Slide 18: 2018 financing activities
2018 financing activities C$500 Million US$300 Million US$500 Million Senior Notes Senior Notes Senior Notes Issued Feb 2018 May 2018 May 2018 Great-West Lifeco Great-West Lifeco Entity Great-West Lifeco Finance 2018, LP Finance 2018, LP S&P: A+ S&P: A+ S&P: A+ Ratings DBRS: A (high) Fitch: A Fitch:
Slide 19: In summary
In summary • Leading insurance franchise with substantial geographic and product diversity • Proven ability to sustain strong and stable long-term earnings • Strong balance sheet, capitalization, and liquidity 19
Slide 20: BMO Capital Markets 2018 Fixed Income Financial Services Conference
BMO Capital Markets 2018 Fixed Income Financial Services Conference Gord Menzie, SVP, Corporate Finance & Treasury
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