Great-West Lifeco reports net earnings of $581 million for third quarter

By The IJ Staff | November 02 2017 01:30PM

Paul Mahon

Great-West Lifeco announced on Nov.2 net earnings of $581 million or $0.587 per common share for Q3 2017. This compares to $674 million or $0.682 per common share for the third quarter last year.

Lifeco's net earnings for the third quarter of 2017 include property catastrophe reinsurance losses of $175 million after-tax that relate to estimated claims resulting from Hurricanes Harvey, Irma and Maria. “Excluding this item, earnings were $756 million, up $82 million from a year ago, primarily due to higher fee income and lower expenses reflecting the impact of ongoing expense management initiatives,” stated Lifeco in an announcement.

Solid operating performances across all businesses

"The third quarter saw solid operating performances across all of our businesses notwithstanding the impact of reinsurance losses on our results", said Paul Mahon, President and CEO, Great-West Lifeco. "We have had some early gains from our Canadian business transformation, the Empower Retirement business in the U.S. is showing healthy momentum post-integration and our strong capital position allows us to continue to invest in future growth."

For the nine months ended Sept. 30, 2017 – excluding the impact of restructuring costs of $156 million year-to-date – Lifeco reported adjusted net earnings of $1,913 million compared to $1,987 million for the same period last year.

Canadian operations

Following Lifeco’s restructuring of its Canadian business into two new business units (one focused on individual customers and the other on group customers), progress has been made on previously announced targeted annual expense reductions of $200 million pre-tax, says the company. “As of September 30, 2017, the Company has achieved approximately $95 million pre-tax in annualized reductions; approximately $69 million related to the common shareholders' account and $26 million related to the participating accounts.”

For the third quarter of 2017, Lifeco’s Canada segment recorded net earnings of $296 million compared to $289 million in the third quarter of 2016. This increase was “primarily due to growth in fee income and strong mortality results in both the Individual Customer and Group Customer businesses,” says Lifeco.