Great-West Lifeco has reported net earnings of $657 million for the first quarter of 2019, down from $731 million for the same quarter last year.

The net earnings decline was “primarily due to higher income taxes, lower net fee income in Canada and the U.S., and unfavourable claims experience in Europe,” said Lifeco in a May 2 statement.

"Sales growth was strong and business fundamentals remained sound despite the weaker earnings performance in the first quarter," said Paul Mahon, President and Chief Executive Officer, Great-West Lifeco Inc. "We have undertaken a number of strategic actions since the beginning of the year to position the Company for long-term sustainable growth. Our capital position remains robust and we continue to evaluate opportunities, including acquisitions, to advance our business strategies and drive profitable growth."

Sales growth

Lifeco’s sales were $90.2 billion, up from $55.6 billion for the same quarter last year. This 160% increase was “primarily driven by a very large sale at Empower Retirement and a large fund management mandate in Europe,” said the company.

Results for Canada business

In the first quarter, Lifeco’s Canada segment net earnings were $283 million, down from $316 million in Q1 2018, a decrease of 10%. “Growth in net earnings related to group and individual insurance, which included strong morbidity and investment results, was more than offset by lower earnings from wealth business, due to lower average assets and margin compression, and by higher taxes than in the prior year,” said the company.

A highlight of the quarter was the announcement on April 3, 2019 that Lifeco’s three Canadian life insurance companies – The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Companyare moving to one brand in Canada: Canada Life.

Formal amalgamation

The companies have also begun the process to formally amalgamate as one company: The Canada Life Assurance Company. “This initiative is separate from, but aligned with, the move to one brand and will further simplify the business,” explained Lifeco, adding that this proposed amalgamation is a multi-step process that would occur only after obtaining required board, regulatory and policyholder approvals.