In This Article:
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Base Earnings: Over $1 billion, increased 12% year over year.
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Base EPS: $1.14, increased 12%.
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Base ROE: 17.3%, up nearly a full percentage point from the prior year.
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Book Value per Share: Increased by 7%.
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Assets Under Administration (AUA): Exceeded $3 trillion for the first time.
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US Segment Base Earnings Growth: 35% increase.
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Empower Base Earnings Growth: 36% year over year in constant currency.
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Canada Base Earnings Growth: 7% increase.
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Europe Base Earnings: Decreased 7% year over year in constant currency.
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Capital and Risk Solutions Base Earnings Growth: 20% year over year in constant currency.
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LICAT Ratio: Increased to 134%, up 4 points from the prior quarter.
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Leverage Ratio: 29%, 2 points lower than a year ago.
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Great-West Lifeco Inc (GWLIF) delivered record base earnings for the fifth consecutive quarter, with strong growth across all segments.
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The US segment, now the largest, achieved a 35% growth in base earnings, surpassing early 2024 objectives.
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Base EPS increased by 14% year-to-date, and base ROE is above the top end of the range, with Empower's base ROE increasing nearly 300 basis points.
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Strategic acquisitions, such as Empower's acquisition of Land Management Corporation, are enhancing offerings and market positions.
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The company maintains strong capital and cash generation across all segments, with robust regulatory capital levels providing stability and flexibility for future opportunities.
Negative Points
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The insurance service results were down year over year due to lower experience gains in Canada and unfavorable group mortality experience in the UK.
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Net participant outflows in Empower's retirement business are driven by demographic trends, with withdrawals outpacing new contributions.
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The European segment saw a 7% decrease in base earnings year over year in constant currency, primarily due to the release of a tax provision in Germany during the prior year.
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The capital and risk solutions business faced challenges in the mortality reinsurance market, with difficulties in competing due to automated underwriting and demand for guaranteed rates.
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Interest rate decreases in the third quarter could impact fixed income holdings, although the company remains optimized for rate changes.
Q & A Highlights
Q: Paul, you mentioned Great-West Lifeco is exceeding its financial objectives. What has changed since setting these expectations, and how sustainable is this growth? A: Paul Mahon, President and CEO, explained that the growth is due to strong market performance and strategic execution, such as successful acquisitions and client retention. He emphasized the company's diversified business model and strategic outperformance as key drivers. Mahon expressed confidence in sustaining growth within their medium-term financial objectives, especially if market conditions remain favorable.