Great-West Lifeco has announced net earnings from continuing operations of $1 billion for the second quarter of 2024, for a 77 per cent increase compared to $569 million reported in Q2 2023.
The company attributes this significant growth to improved market conditions from interest rate movements and better non-fixed income assets experience. Additionally, reduced expenses related to business transformation initiatives, primarily in Europe operations and Empower, have contributed to these results.
It is worth noting that Q2 2023 results included losses of $121 million due to a one-time asset rebalancing within the Europe segment.
Paul Mahon, President and CEO of Great-West Lifeco, expressed satisfaction with the company’s record base earnings for the fourth consecutive quarter. This success is linked to the progress in U.S. operations, which are on course to become the company's largest segment by earnings this year, he said.
Insurance and investment earnings
Net earnings from insurance activities across all divisions reached $831 million in Q2 2024, up from $703 million as of June 30, 2023.
Meanwhile, net earnings from investment activities for all divisions stood at $649 million in Q2 2024, a substantial increase from $304 million in the same quarter of 2023.
Canadian operations
In Canada, which includes Canada Life, net earnings from continuing operations were $335 million in Q2 2024, compared to $148 million in the same quarter of 2023.
The company attributes this growth to favorable results in long-term disability and health experience, organic growth in the Workplace Solutions unit, and higher fees and spread income, partly driven by the acquisition of Investment Planning Counsel (IPC) and Value Partners, along with favourable tax impacts in the quarter.
Notably, the integration of these two firms has added $250 million to net asset inflows in 2024. Great-West also reported a robust 40 per cent year-over-year increase in assets under administration in Canada, though operating expenses have risen due to business growth.
Insurance activities in Canada generated $421 million in Q2 2024, compared to $354 million in Q2 2023. Net earnings from investment activities in Canada reached $147 million in Q2 2024, a sharp turnaround from a $103 million loss in the same quarter of 2023.
For Canada Life, Great-West’s main operating subsidiary in the country, the Life Insurance Capital Adequacy Test (LICAT) ratio was 130 per cent as of June 30, 2024, up from 126 per cent a year earlier.
Comparing the first six months of 2024 to the same period in 2023, group retirement product sales increased by $157 million (11 per cent). Individual wealth management products saw a rise of $4.2 billion (87 per cent). Sales in the insurance and annuities unit grew by 2 per cent year-over-year.
U.S. operations
In the United States, net earnings from continuing operations reached $274 million in Q2 2024, compared to $161 million in Q2 2023.
Insurance activities in the U.S. yielded net earnings of $59 million in Q2 2024, up slightly from $56 million in Q2 2023. Net earnings from investment activities were $329 million for U.S. operations in Q2 2024, up from $316 million in the same quarter of 2023.
European operations
In Europe, net earnings attributable to shareholders reached $201 million in Q2 2024, a significant increase from $102 million in Q2 2023.
Insurance activities in Europe generated net earnings of $214 million in Q2 2024, compared to $178 million in the same quarter of 2023. Net earnings from investment activities for European operations were $101 million in Q2 2024, down from $128 million in Q2 2023.
The company highlighted a 30 per cent increase in sales in the Individual Wealth and Asset Management unit, totaling $8.4 billion in Q2, driven by a large client sale in Ireland.
Capital management
Finally, in the Capital and Risk Solutions segment, net earnings attributable to shareholders were $155 million in Q2 2024, down from $169 million in Q2 2023.
Insurance activities in this segment produced $194 million in Q2 2024, slightly down from $202 million in Q2 2023. Net earnings from investment activities were $42 million in Q2 2024, up from $26 million in the same quarter of 2023.