Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — Q3 2001 Earnings Presentation
37 slides from Great-West Lifeco's earnings presentation, November 2001
Slide 1: Quarterly Information Q3 2001 For Analysts & Investors
QUARTERLY INFORMATION Q3 2001 For Analysts & Investors 1
Slide 2: Forward-Looking Statements
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Forward-Looking Statements This conference call may contain forward-looking statements about future operations, financial results, objectives and strategies of the Company. Forward- looking statements are typically identified by the words ”bel
Slide 3: Highlights
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Highlights • Net Income attributable to Common Shareholders before adjustments was $563 million, or $1.516 per share up 21% ove r 2000. • 2001 Results include the following two adjustments: - A third quarter claims provision of $73 million aft
Slide 4: Consolidated Earnings
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Consolidated Earnings ($ CDN millions) For the nine months ended September 30 2000 2001 Change Total Net Income 492 349 -29% Net Income - Common Shareholders 469 326 -30% ROE 18.1% 13.7% Adjusted Net Income - Common 469 563 20% Adjusted ROE 18
Slide 5: Net Income to Common Shareholders by Region (Excluding Adjustments)
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Net Income to Common Shareholders by Region (2001 Results Excluding Adjustments) ($ millions) For the nine months ended Sept. 30 2000 2001 Change Canadian Segment Great-West Shareholder operating earnings 198 243 23% Portion of Lifeco Earnings
Slide 6: Net Income to Common Shareholders by Region (Including Adjustments)
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Net Income to Common Shareholders by Region (2001 Results Include Adjustments) ($ millions) For the nine months ended Sept. 30 2000 2001 Change Canadian Segment Great-West Shareholder operating earnings 198 243 23% September 11 (73) Portion of
Slide 7: Consolidated Assets
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Consolidated Assets ($ CDN millions) At September 30 2000 2001 Change General Fund Assets Canada 32,807 34,091 4% U.S. 22,647 24,057 6% Total 55,454 58,148 5% Segregated Fund Assets Canada 19,009 17,642 -7% U.S. 20,081 18,060 -10% Total 39,090
Slide 8: Sales New Annualized Premium
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Sales New Annualized Premium ($ CDN millions) For the nine months ended September 30 2000 2001 Change Canada 5,461 58% 4,868 58% -11% U.S. 3,989 42% 3,516 42% -12% Total Sales 9,450 8,384 -11% 8
Slide 9: Revenue Premium Incl. Seg. Funds and ASO
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Revenue Premium Incl. Seg. Funds and ASO ($ CDN millions) For the nine months ended September 30 2000 2001 Change Canada 8,239 41% 8,153 39% -1% U.S. 11,707 59% 12,917 61% 10% Total 19,946 21,070 6% 9
Slide 10: Fee Income
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Fee Income ($ CDN millions) For the nine months ended September 30 2000 2001 Change Canada 258 286 11% U.S. 954 1,128 18% Total Fee Income 1,212 1,414 17% 10
Slide 11: Expenses
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Expenses ($ CDN millions) For the nine months ended September 30 2000 2001 Change Operating Expenses GWL (Canada) 472 503 7% GWL&A (U.S .) 858 948 10% Lifeco Entity 3 4 Total Operating Expenses 1,333 1,455 9% Investment Expenses GWL (Canada) 1
Slide 12: Canadian Operations
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s CANADIAN OPERATIONS 12
Slide 13: Sales New Annualized Premium
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Sales New Annualized Premium ($ millions) For the nine months ended September 30 2000 2001 Change Individual Ins. & Investment Life & Living Benefits 44 47 7% R & IS 3,411 2,210 -35% Sub-Total 3,455 2,257 Group 158 246 56% Reinsurance & Specia
Slide 14: Revenue Premium Incl. Seg. Funds and ASO
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Revenue Premium Incl. Seg. Funds and ASO ($ millions) For the nine months ended September 30 2000 2001 Change Individual Ins. & Investment Life & Living Benefits 278 286 3% R & IS 2,970 2,114 -29% Sub-Total 3,248 2,400 Group 2,217 2,429 10% Re
Slide 15: Fee Income
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Fee Income ($ millions) For the nine months ended September 30 2000 2001 Cha nge Segrega ted Funds 201 221 10% Administrative Services Only 39 45 16% Assets Under Administra tion 18 20 9% Tota l Fee Income 258 286 11% 15
Slide 16: R&IS Investment Funds Net Cash Flow and Asset Change
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s R&IS In vestm ent Fu nd s - IRIS Net Cash F low and Asset Chang e 2,000 Mutua l Fun ds 1,500 1,000 $Millions 500 - (500) (1,000) 2000A 2001A 2000A 2001A 2000A 2001A 2000A 2001A 2000A 2001A Deposits Withdrawals Net Cash Flow Market Gain Asset C
Slide 17: Segregated Fund Assets
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Segregated Fund Assets ($ Millions) Great-West Life and London Life Q4 2000 Q3 2001 9 Mo nth Change $ % of Total $ % of Total $ % Equities 10,398.7 56% 9,078.4 52% (1,320.3) -13% Fixed Income 5,080.3 27% 5,135.5 29% 55.2 1% Balanced 2,018.8 11
Slide 18: Individual Segregated Funds Market Share
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Individual Segregated Funds Market Share (Source: Investor Economics) ($ Millions) Sept. 30, 2001 Dec 31, 2000 Sept. 30, 2000 % Change Net Assets Mkt Share Rank Mkt Share Rank Mkt Share Rank Yr Over Yr GWL/LL 9,221 23.8% 1 22.4% 1 21.6% 1 -4.6
Slide 19: Expenses
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Expenses ($ millions) For the nine months ended September 30 2000 2001 Change Individual Ins. & Investment Life & Living Benefits 54 49 -9% R & IS 119 115 -4% Sub-Total 173 164 Group 154 168 9% Reinsurance, Specialty & Other 38 52 35% 366 384
Slide 20: Net Income
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Net Income ($ millions) September 30 YTD 2000 2001 Change Individual Life & Living Benefits 38 45 19% R & IS 57 64 13% Group Life & Health 51 62 21% Corporate Investments 40 51 28% Corporate 12 21 76% Total Shareholders 198 243 23% Sept. 11 (7
Slide 21: Estimate of LRG September 11 Earnings Exposure
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Estimate of LRG September 11 Earnings Exposure NET LOSS ($USD) ($CDN) Product Line Financial Traditional Total Total Property Catastrophe 21.0 14.4 35.4 54.9 Property Per Risk - 6.1 6.1 9.5 Aviation - 2.0 2.0 3.1 Casualty 1.6 1.7 3.3 5.1 Accid
Slide 22: Invested Assets
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Invested Assets ($ millions) At September 30 2000 2001 ($) (%) ($) (%) Bonds 15,428 57.4% 16,136 58.7% Cash and CD's 478 1.8% 321 1.2% Mortgages 7,474 27.8% 7,312 26.6% Stocks 1,126 4.2% 1,243 4.5% Real Estate 1,018 3.8% 1,059 3.9% Policy Loan
Slide 23: Asset Quality Non-Performing Loans
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Asset Quality Non-Performing Loans ($ millions) At September 30 2000 2001 Asset Class Bonds 22 31 Mortgages 24 11 Foreclosed Real Estate 2 0 Total 48 42 In-Year Charg e for Credit Losses (2.7) 1.0 23
Slide 24: U.S. Operations (US$)
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s U.S. OPERATIONS (US$) Note: FX Translation rate is as follows: 2000 2001 Income Statement 1.4720 1.5380 Balance Sheet 1.5070 1.5790 24
Slide 25: Sales New Annualized Premium
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Sales New Annualized Premium ($ US millions) For the nine months ended September 30 2000 2001 Change Employee Benefits 1,611 1,160 -28% Financial Services 1,099 1,126 2% Total U.S. 2,710 2,286 -16% 25
Slide 26: Revenue Premium Incl. Seg. Funds and ASO
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Revenue Premium Incl. Seg. Funds and ASO ($ US millions) For the nine months ended September 30 2000 2001 Change Employee Benefits 6,258 6,626 6% Financial Services 1,506 1,579 5% 7,764 8,205 6% Par 189 194 Total U.S. 7,953 8,399 6% 26
Slide 27: Fee Income
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Fee Income ($ US millions) For the nine months ended Sept. 30 2000 2001 Change Segregated Funds 130 125 -4% Administrative Services Only 480 556 16% Assets Under Administration 38 52 37% Total Fee Income 648 733 13% 27
Slide 28: Expenses
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Expenses ($ US millions) For the nine months ended September 30 2000 2001 Change Employee Benefits 494 517 5% Financial Services 84 91 8% Corporate 3 5 581 613 6% Par 3 3 Operating Expenses 584 616 5% Investment Expenses 8 7 -13% Total Expense
Slide 29: Net Income (Excluding Alta)
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Net Income (2001 Results Exclude Alta) ($ US millions) For the nine months ended Sept. 30 2000 2001 Change Employee Benefits 98 119 21% Financial Services 89 100 12% Corporate (2) 2 Net Income - Common Shareholders 185 221 19.5% 29
Slide 30: Net Income (Including Alta)
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Net Income (2001 Results Include Alta) ($ US millions) For the nine months ended Sept. 30 2000 2001 Change Employee Benefits 98 119 21% Financial Services 89 100 12% Corporate (2) 2 Special charges - (107) Net Income - Common Shareholders 185
Slide 31: Employee Benefits Life & Health Sales
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Employee Benefits Life & Health Sales ($ US millions) Sept. Sept. Sept. 2001 2001 2000 In-Qtr YTD YTD Case Sales 368 1,414 1,879 Terminations 798 2,299 1,666 Net (430) (885) 213 Sales Premium 99 532 843 Net Premium (299) (1088) (29) * Members
Slide 32: Employee Benefits 401(k)
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Employee Benefits 401 (k) ($ US millions) Sept. Sept. Sept. 2001 2001 2000 In-Qtr YTD YTD Case Sales 118 348 605 Terminations 147 483 323 Net (29) (135) 282 Net Cash Flow 169 431 409 Ending Assets 6,910 6,910 8,975 Participants (thousan ds) 56
Slide 33: Financial Services Sales Placed Premium
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Financial Services Sales Placed Premium ($ US millions) Sept. Sept. Sept. 2001 2001 2000 In-Qtr YTD YTD BOLI 437 541 530 (incl. variable/sep. accounts) Individual Annuity - fixed 2 11 17 - variable 86 191 226 88 202 243 Individual Life (excl.
Slide 34: Financial Services Participants
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Financial Services Participants Sept. Sept. Change 2001 2000 In Quarter YT D YT D P/NP 33,026 1,255,266 978,154 FASCo rp 15,271 399,070 337,890 34
Slide 35: Financial Services Assets
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Financial Services Assets ($ US millions) Sept. Sept. Change 2001 2000 In Quarter YTD YTD P/NP - General Acct. 84 3,972 3,722 - Variable (352) 3,973 4,378 - Unwrapped (1,573) 19,690 19,852 FASCorp - Unwrapped (504) 5,680 6,117 35
Slide 36: Invested Assets (US$ millions)
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Invested Assets ($ US millions) At Sept. 30 2000 2001 ($) (%) ($) (%) Bonds 9,803 70.6% 10,187 72.1% Cash and CD's 245 1.8% 147 1.0% Mortgages 880 6.3% 692 4.9% Stocks & Real Estate 201 1.4% 210 1.5% Policy Loans 2,752 19.8% 2,894 20.5% Total
Slide 37: Asset Quality Non-Performing Loans
QUARTERLY INFORMATION Q3 2001 For Analyst s & Investor s Asset Quality Non-Performing Loans ($ US millions) At Sept. 30 2000 2001 Asset Class Bonds 14 72 Mortgages 13 4 Foreclosed Real Estate 8 13 Total 35 89 In-Year Charge for Credit Losses (6.7) 0 37