Great-West Lifeco is off to a strong start this year.
The insurer reported net income of $770 million in the first quarter of 2022, up from $707 million in Q1 2021. This amounts to an increase of 8.9 per cent or $63 million.
Downturn in Canada
Four of the insurer’s five segments performed better in the first quarter of 2022 than in Q1 2021: +$24 million for Europe, +$24 million for Capital and Risk Solutions, +$16 million for the U.S., and +$11 million for Lifeco Corporate.
Great-West Lifeco lost ground in Canada. The segment, which includes Canada Life, reported net earnings of $275 million in the first quarter of 2022, down from $287 million in Q1 2021. This decrease of 4.2 per cent or $12 million is due to “adverse morbidity experience in Group Customer, as well as unfavourable impacts of new business and policyholder behaviour in Individual Customer.”
Premiums and deposits
Great-West Lifeco’s premiums and deposits were $44.2 billion in the first quarter of 2022, compared with $45.1 billion in Q1 2021, for a decrease of 2 per cent or $905 million.
Premiums and deposits declined by 8 per cent or $1.7 billion in the U.S. and by 2.1 per cent or $154 million in Capital and Risk Solutions.
In contrast, they increased by 6.6 per cent or $557 million in Europe and by 5.4 per cent or $416 million in Canada.
In Canada, premiums and deposits passed the $8 billion mark for the first time. Looking at the results in closer detail, premiums and deposits in the two Canadian sub-segments rose by 7.9 per cent or $372 million in group insurance, to $5.1 billion, and by 1.5 per cent or $44 million in individual insurance, to $3 billion.
Great-West Lifeco’s total sales were $75.5 billion in the first quarter of 2022, compared with $110.9 billion in Q1 2021. The corresponding decline is 31.9 per cent or $35.4 billion.
Sales were down 36.5 per cent or $36.1 billion in the U.S., “primarily due to lower Empower large plan sales as well as lower Putnam mutual funds and institutional accounts sales,” the insurer says. “Included in sales for the first quarter of 2021 was one Empower large plan sale relating to a new client with approximately 316,000 participants,” Great-West points out.
Sales in Canada were $4.3 billion in the first quarter of 2022, versus $4.7 billion in Q1 2021. The decrease of 9.1 per cent or $429 million was “primarily due to lower large case group wealth and insurance sales as well as lower individual mutual fund sales,” says Great-West Lifeco.
Looking at the results in closer detail, sales in the two Canadian sub-segments declined: individual insurance sank by 9.3 per cent or $312 million, to $3 billion; and group insurance was down 8.5 per cent or $117 million, to $1.3 billion.
Conversely, sales climbed 15.7 per cent or $1.1 billion in Europe, “primarily due to growth in annuity and equity release mortgage sales in the U.K. and higher wealth management sales across all business units,” the insurer says, adding that “these items were partially offset by the impact of currency movement.”