Great-West Lifeco Inc. · TSX:GWO
Great-West Lifeco — Investor Presentation (September 2022)
28 slides from Great-West Lifeco's investor presentation, Sep 8, 2022
Slide 1: Investor Presentation Q2 2022
Investor Presentation Q2 2022 Note: All dollar amounts are expressed in Canadian dollars and references to “dollars” or “$” are to Canadian dollars, unless otherwise stated.
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 "will", "may", "e
Slide 3: Diversified Business With Leadership Positions in Key Markets
Diversified Business With Leadership Positions in Key Markets
Slide 4: A global financial services company
A global financial services company Capital & Risk Solutions 17% Canada 170+ Years 6th 38% Of History Largest Life Insurer $3.1B in North America1 Net Earnings4 Europe 31% US $2.3T $1.0T 16% Assets Under Administration2,3 Assets Under Management2,3 Capital & Risk Solutions 17% Canada 37% $3.3B Base
Slide 5: Great-West Lifeco at a glance
Great-West Lifeco at a glance • Great-West Lifeco Inc. is a global Key Performance Metrics Financial Strength Ratings1, Regulatory Capital and Liquidity financial services holding company In $B, unless otherwise noted As at with interests in life insurance, health insurance, retirement and 6 Months
Slide 6: Market-leading franchises well-positioned for growth
Market-leading franchises well-positioned for growth Canada U.S. Europe Capital & Risk Solutions 37% 38% 21% 16% 25% 31% 17% 17% of base earnings1,2,3 of net earnings1,3 of base earnings1,2,3 of net earnings1,3 of base earnings1,2,3 of net earnings1,3 of base earnings1,2,3 of net earnings1,3 • A lea
Slide 7: Our value creation priorities: focus on the customer and leverage risk & investment expertise
Our value creation priorities: focus on the customer and leverage risk & investment expertise Advice-centered value Digital capabilities Workplace extensions Risk & investment expertise creation Capture value through Deliver advice and Extend workplace participant Leverage capabilities to advice-bas
Slide 8: Our priorities are expected to drive growth across the portfolio
Our priorities are expected to drive growth across the portfolio Higher Lower impact impact Advice-centered value creation Digital capabilities Workplace extensions Risk & investment expertise 8
Slide 9: Sustainability, DEI and ESG are core to our value creation priorities
Sustainability, DEI and ESG are core to our value creation priorities Environmental Diversity, Equity ESG Stewardship & Inclusion Investing • Committed to achieving net zero for • Our Diversity Policy focuses on developing • Inclusion of qualitative and quantitative operations well before 2050, and
Slide 10: Our medium-term financial objectives
Our medium-term1 financial objectives target dividend 8-10% base EPS growth p.a 2 . 14-15% base ROE 2,3 45-55% payout ratio, base earnings2 • Organic earnings growth from • Diversified business that drives • Cash generative business supporting market-leading franchises in strong and stable returns a
Slide 11: Performance against medium-term financial objectives
Performance against medium-term1 financial objectives 1-Year 3-Year4 As of December 31, 2021 Medium-Term Financial Objectives Base2 Base2 8-10% base EPS2 growth per year 21.9% 13.4% 14-15% base ROE2 14.6% 13.6% Target dividend payout ratio of 45-55% of base earnings2 51.4% 56.7% Net Financial Highli
Slide 12: Consistent Long-Term Earnings and Strong M&A Track Record
Consistent Long-Term Earnings and Strong M&A Track Record
Slide 13: Solid long-term earnings and shareholder returns
Solid long-term earnings and shareholder returns $4.00 30.0% 6.6% 14.1% Lifeco net earnings per common share (EPS) 2012 – 2021 C$, rounded to the nearest cent $3.50 Annual EPS growth1 Average ROE1 3.37 3.17 25.0% 3.00 $3.00 2.77 2.67 2.55 2.49 20.0% $2.50 2.34 2.17 $2.00 1.90 16.6% 15.0% 15.7% 15.3%
Slide 14: History of stable and growing dividends
History of stable and growing dividends Annual dividends per common share1 5.2% 2021 dividend yield2 ‘14 – ‘21 CAGR 5.6% 45% - 55% Target dividend payout ratio (base)3 Base3 Net4 51.4% 53.6% 1.23 1.23 1.23 1.30 1.38 1.47 1.56 1.65 1.75 1.80 2021 dividend payout ratio 2012 2013 2014 2015 2016 2017 20
Slide 15: Strong track record of value-enhancing M&A
Strong track record of value-enhancing M&A ACQUISITIONS Retirement Services Business Retirement Health Insurance Plan Services Ireland Ltd. Full-Service L&G International RPS Minority Interest Retirement (Ireland) Ltd. Minority Interest Business 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 U.S.
Slide 16: Update on recent U.S. acquisitions
Update on recent U.S. acquisitions Leveraging acquired businesses to drive our growth strategy for Empower, both as a leader in DC retirement and as a growing retail wealth manager • Client, asset, and revenue retention tracking ahead of our original expectations • Completed six of eight waves of Ma
Slide 17: Strong Balance Sheet and Capital Position
Strong Balance Sheet and Capital Position
Slide 18: Diversified, high-quality asset mix
Diversified, high-quality asset mix Conservative investment portfolio, predominantly comprised of fixed income instruments – 99% of which are investment-grade • Invested assets of ~$233B Invested Asset Distribution1 Bond Portfolio Quality1 • Bonds represent 67% – 99% are investment grade – 71% rated
Slide 19: Robust capital and liquidity
Robust capital and liquidity Historical Coverage Ratio2 Historical Financial Leverage Ratio1, 3 Historical LICAT Ratio4 • Liquidity requirements are (x) (%) (%) largely self-funded – Short-term obligations met 129% 124% 34.7% 117% by internal funds and 33.8% 33.2% maintaining levels of liquid 9.3x 2
Slide 20: Strong credit ratings
Strong credit ratings Canada Life Lifeco Outlook (Opco)1 (Holdco)2 A+ Stable AA A (High) Stable AA A Negative Aa3 Stable AA A+ Stable 1. Canada Life’s ratings are financial strength ratings 2. Lifeco’s ratings are senior debt ratings 20
Slide 21: Efficient capital structure
Efficient capital structure Lifeco Finance (Delaware) LP As at June 30, 2022, unless otherwise noted, C$ U.S. Senior Debt $888m Lifeco Finance 2018, LP U.S. Senior Debt $1,024m Senior Debentures $2.5b Lifeco U.S. Finance 2020, LP Preferred Shares $2.7b U.S. Senior Debt $642m Euro Senior Debt $1.3b S
Slide 22: Well-positioned for transition to IFRS 17
Well-positioned for transition to IFRS 17 Not anticipating material financial impacts and business strategy remains unchanged Businesses representing over 70% of base earnings1 expected to see limited or no impact Shareholders’ equity expected to decrease by 10-15%, driven by the establishment of th
Slide 23: Appendix
Appendix
Slide 24: Canada
Canada Overview Earnings 1,2 Return on Equity (ROE) 1 Individual Customer (IC) and Group Customer (GC) businesses 1,206 1,220 18.5% 1,187 1,178 Life insurance, health insurance, retirement savings and investment management 17.2% 16.8% Leading market shares in major product 16.7% categories 1,070 16.
Slide 25: U.S.
U.S. Overview Earnings 1,2 Return on Equity (ROE) 1 Financial Services (Empower) Two primary businesses: Empower and Putnam Investments 671 11.4% 12.2% 8.6% Empower is the second-largest retirement 8.7% services provider in the U.S.3, serving 71k plans 499 5.6% 5.1% and 17M4 participants with AUA6 o
Slide 26: Europe
Europe Segment Overview Earnings 1,2 Return on Equity (ROE) 1 Operations in the U.K., Ireland and Germany 1,004 976 17.2% 913 16.5% Market leader in group risk, a leading player in 830 796 payout annuities and a strong competitor in the 15.7% 688 equity release mortgage market in the U.K. 14.6% Net
Slide 27: Capital & Risk Solutions (CRS)
Capital & Risk Solutions (CRS) Segment Overview Earnings 1,2 Return on Equity (ROE) 1 Includes both reinsurance and retrocession 614 business transacted directly with clients or 44.4% 536 532 547 through reinsurance brokers in the U.S., Ireland, Barbados and Bermuda 386 401 38.8% Products include tr
Slide 28: Investor Presentation
Investor Presentation Q2 2022 Note: All dollar amounts are expressed in Canadian dollars and references to “dollars” or “$” are to Canadian dollars, unless otherwise stated.
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