Income more than doubled at Great-West Lifeco.
The company reported net earnings of C$707 million for the first quarter of 2021, compared with $342 million in Q1 2020.
This growth of 106.7 per cent or $365 million is partly due to the impact of more favourable market conditions compared with those prevailing at the onset of the COVID-19 pandemic in early 2020, the company says.
Canada overall saw gains. This segment, which includes Canada Life, the lifeco’s major Canadian operating subsidiary, recorded net earnings of $287 million, compared with $151 million in the first quarter of 2020.
This increase of 90.1 per cent or $136 million was “primarily due to favourable morbidity experience in Group Customer and favourable impact of new business in Individual.” Positive market impacts also played a role.
Three of Great-West Lifeco's other four segments also saw their net income skyrocket:
- United States: Net earnings of $89 million, up 1,680 per cent or $84 million from $5 million in Q1 2020;
- Europe: Net earnings of $195 million, up 114.3 per cent or $104 million from $91 million in Q1 2020;
- Capital and Risk Solutions: Net earnings of $145 million, up 55.9 per cent or $52 million from $93 million in the first quarter of 2020.
Lifeco Corporate reported a net loss of $9 million, compared with net earnings of $2 million in the first quarter of 2020. This result signals an $11 million decline.
Premiums and deposits: Canadian growth
Great-West Lifeco’s premiums and deposits were C$46.3 billion in the first quarter of 2021, down 0.4 per cent or $205 million from the first quarter of 2020.
Although they decreased by 7 per cent or $1.7 billion in the United States to $22.7 billion, and by 19.4 per cent or $2 billion in Europe to $8.4 billion, they increased in the other two Lifeco segments, including Canada.
Canadian premiums and deposits were $7.7 billion, a slight increase from $7 billion in the first quarter of 2020. The growth equals 9.6 per cent or $675 million.
- Individual Insurance premiums and deposits rose 6.9 per cent or $193 million to $3 billion.
- Group Insurance premiums and deposits climbed by 11.4 per cent or $482 million to $4.7 billion.
Premiums and deposits in Capital and Risk Solutions were $7.5 billion, compared with $4.6 billion in the first quarter of 2020. Premiums and deposits were up 62.1 per cent or $2.9 billion, Great-West Lifeco says, “primarily due to new reinsurance agreements and higher volumes relating to existing business.” The insurer adds that “the reinsurance agreement entered into in Japan contributed $1.4 billion to the increase.”
Record number of subscriptions
Great-West Lifeco reported total sales of $110.9 billion in the first quarter of 2021, compared with $66.5 billion in Q1 2020, for an increase of 66.7 per cent or $44.3 billion.
Canada was one of two areas that experienced growth. Total Canadian sales reached $4.7 billion, up from $3.6 billion in the first quarter of 2020. This increase of 30.3% or $1.1 billion is “primarily due to higher large case group wealth and insurance sales as well as higher individual wealth mutual fund sales,” Lifeco explains.
In closer detail:
- Individual insurance: Total sales increased by 15.5 per cent or $450 million to $3.3 billion.
- Group insurance: Total sales advanced by 89.2 per cent or $651 million to $1.4 billion.
The largest increase was in the United States. Total US sales reached $98.9 billion, up from $53.2 billion in the first quarter of 2020. This increase of 85.9 per cent or $45.7 billion was “primarily due to an increase in Empower Retirement large plan sales and Personal Capital related sales, partially offset by lower Putnam mutual funds sales.”
Only one of the three sectors saw sales decline: In Europe, total sales were $7.2 billion, compared with $9.7 billion in Q1 2020. This decline of 25.3 per cent or $2.4 billion was “primarily due to lower fund management sales and lower pension sales in Ireland, partially offset by the impact of currency movement.”