One of the surprises of the COVID-19 pandemic – that virtual work could be accomplished smoothly, effectively, productively and remotely – was one of the biggest takeaways learned in the last 12 to 18 months, says Paul Mahon, president and CEO of Great-West Lifeco Inc. Mahon was a panelist at the recent 38th Annual Insurance Conference hosted by S&P Global Ratings. 

“The one surprise I would say I’ve had over the last 12 to 18 months, was our ability to actually execute on large, value-creating transactions. We deployed over $8-billion in firepower over that period in time, on three large transactions. I was actually surprised at how smoothly and effectively we could make that happen virtually. That included onboarding new clients, onboarding staff and also doing all of the due diligence,” he said, giving credit to the company’s teams. “From a corporate perspective, (I was) really pleased with our ability to respond.” 

He also calls this a sign of what might be possible in the future. 

The three investments Mahon was referring to are U.S. business transactions where Empower Retirement acquired Prudential Financial Inc.’s full-service retirement business, the retirement services business of Massachusetts Mutual Life Insurance Company and executed a third deal to acquire digital wealth management company, Personal Capital. 

In discussing talent at the end of his remarks he also says “COVID has taught us that many roles can be quite productive working remotely.” 

In between those two points, Mahon also shared with the audience his company’s ambitions and principles guiding its acquisition activities, the focus insurance companies will need to have going forward (stakeholder capitalism featured in his comments) and how certain aspects of business carry out having a majority shareholder with a stake as large as Power Corporation’s. (As of mid-June, Power Corporation of Canada was and is a majority shareholder of Great-West Lifeco, owning just over 70 per cent of the company’s outstanding shares.) 

Stakeholder capitalism 

Social unrest, increased environmental concerns, rising costs due to supply chain issues and Russia’s invasion of Ukraine, causing an increase in uncertainty, he says are all pushing companies like Great-West to think about resilience and also about stakeholders, including customers, employees, communities, and the company’s impact on the environment. “I think there’s a real shift to making sure that we’re really centered on our corporate purpose,” he says, “including what our impact will be on the environment.” The company’s commitment to net zero carbon in its invested assets by 2050, he says will be a challenge and hard work, but says resilient companies are able to adapt to that change.

“Companies are going to have to be more active participants in addressing a lot of the societal challenges that are going on,” he told the group gathered for the virtual presentation. In looking at the future, he also says it will be necessary to be mindful and disciplined going forward as the company takes on and manages risks.

Power Corporation of Canada 

Power Corporation, meanwhile, has held a controlling interest in Great-West Lifeco for more than 50 years, he points out when S&P’s moderator and managing director of life and health insurance, Kevin Ahern asked the CEO what benefits come from having the company as a majority shareholder and what it means for access to capital and business model execution. 

Mahon agrees the arrangement brings with it some characteristics that might be somewhat unique among publicly traded companies. “I’d say the first is a focus on long-term value creation,” he says. 

“If you think about our leading positions in Canada, the United States and Ireland, for example, we’ve got strong market leadership. There’s been a real commitment to building these positions over time,” he adds. “Like other publicly traded companies we’ve got our quarterly and our annual financial goals and medium-term financial objectives, which we’ve shared with investors, (but) we do take this longer view. It’s about actively managing the portfolio, I would say, for long term sustainable growth.” 

Great-West’s relationship with other Power Corporation companies, IGM Financial and its subsidiary companies among them, also appear alliance-like, where the insurance company benefits from using the other firm’s asset management capabilities, while those firms in turn benefit from making use of Great-West’s insurance capabilities. 

“Similarly, we’re co-investors with both Power and IGM, in fintech,” he adds. “We’re also co-investors (with both companies) in alternative asset managers.” 

All of these things, he says, are additional points of strength for the company that might be a little bit different relative to those found in more widely held company. “I do see them as strengths,” he says. 

Finally, in discussing the company’s own ambitions and principles, he says Great-West is focused on acquisitions and business development in markets where there is good organic growth, where there is potential to consolidate the market or potential to take a position in the market and extend it. 

“We want to establish positions in markets where we can have a leadership position,” he says.