Great-West Lifeco released its financial results on November 6, reporting net earnings attributable to common shareholders of $859 million for the third quarter of 2024.

This represents a decrease of 5% compared with net earnings of $905 million reported in the same quarter of the previous year.

This result reflects the “less favourable impacts of relative interest rate movements, including spread movements, and more unfavourable fair value impacts of assumption changes and management actions partially offset by higher base earnings.” 

Results for the third quarter of 2023 took into account a decline in commercial property values within European operations, Lifeco points out in its management report. This decline was not repeated.

The company refined certain models relating to insurance contract liabilities, which had a positive economic impact on the company's financial statements, namely a $305 million increase in contractual service margin for non-participating products. This revision had a negative impact of $203 million on net income.

“We have strong underlying momentum across all of our segments, and we have delivered on key actions to support and accelerate our growth strategies in both the U.S. and Canada,” stated Paul Mahon, President and CEO of Great-West Lifeco.

Mahon was particularly pleased with base earnings, which once again exceeded the billion-dollar mark in the third quarter, setting a record for the fifth consecutive quarter.

Base earnings, the company points out, are not a measure in accordance with generally accepted accounting principles. Base earnings reflect management's view of the company's underlying performance and provide an alternative measure for understanding underlying business performance to IFRS net earnings, the company explained in its management report.

Net earnings from insurance and investments  

Net earnings from insurance activities for all divisions were $780 million in the third quarter of 2024, compared with $788 million in the same quarter last year.

Net earnings from investment activities for all divisions totalled $398 million in the third quarter of 2024, compared with $650 million in the third quarter of 2023.

In Canada  

For Canadian operations, which include the insurer Canada Life, net income from continuing operations was $460 million in the third quarter of 2024, compared with $414 million for the same period of the previous year.

The company attributes this result to “higher net fee and spread income from the addition of IPC and Value Partners and higher equity markets, as well as improved credit experience and higher earnings on surplus.”

“These items were partially offset by lower CSM (contractual services margin) recognized for services provided in Insurance and Annuities driven by actuarial assumption changes,” the company adds.

The company points out that the integration of these two firms contributed $407 million to net asset inflows in 2024. Lifeco also drew attention to the 26% increase in segregated fund sales within the Canadian operations.

Among other developments in 2024, the company noted that Canada Life entered into a new independent distribution agreement with Primerica Life Insurance Company of Canada. The agreement was made public on October 4.

This distribution agreement will give Primerica Canada advisors access to a select group of Canada Life segregated funds, broadening market access for Canada Life's existing distribution network and helping the neglected mass market. Primerica Canada advisors will be welcomed and trained in stages, starting in 2025, the company explained. 

Earnings from insurance operations in Canada amounted to $415 million in the third quarter of 2024, compared with $387 million a year earlier, according to supplementary information provided by the company.

Net earnings from investment activities were $238 million for Canadian operations in the third quarter of 2024, compared with $276 million in the third quarter of the previous year.

Lifeco reports that for Canada Life, the company's main operating subsidiary in the country, the Life Insurance Capital Adequacy Test (LICAT) ratio was 134% at September 30, 2024. This compares with 128% at September 30, 2023.

After the first nine months of 2024 compared with the same period in 2023, sales of group retirement products were up 12%. Sales of individual wealth management products were up 88%, while sales of insurance and annuity products were up 2% year-on-year.

United States 

In the United States, net earnings from continuing operations were $307 million in the third quarter of 2024, compared with $244 million in the third quarter of the previous year.

U.S. insurance operations posted a net loss of $39 million in the third quarter of 2024, compared with net earnings of $17 million for the same quarter of 2023.

Net earnings from investment activities amounted to $349 million for U.S. operations in the third quarter of 2024, compared with net earnings of $376 million for the third quarter of last year.

Europe  

For European operations, net earnings attributable to shareholders amounted to $115 million in the third quarter, compared with $25 million for the third quarter of 2023.

Insurance operations in Europe posted income of $207 million for the third quarter of 2024, compared with $205 million for the third quarter of 2023.

On the investment side, the company reported a net loss of $5 million for European operations in the third quarter of 2024, compared with a net loss of $115 million for the same period last year. 

Insurance operations in Europe reported net earnings of $207 million for the third quarter of 2024, compared with net earnings of $205 million for the third quarter of 2023.

On the investment side, the company reported a net loss of $5 million for European operations in the third quarter of 2024, compared with a net loss of $115 million for the same period last year.

Great-West Lifeco points out that sales in the individual wealth and asset management unit rose 80% year-on-year to $9.5 billion in the third quarter of 2024. The company attributes this increase to higher sales of institutional account management products in Ireland resulting from a strategic asset allocation decision and rebalancing by a major client, and the impact of currency fluctuations.

Capital management 

For the Capital and Risk Solutions segment, net earnings attributable to shareholders amounted to $9 million in the third quarter of 2024, compared with $265 million in the same quarter last year.

Earnings from insurance activities in this segment amounted to $197 million in the third quarter of 2024, compared with $179 million in the third quarter of 2023.

Investment activities posted a net loss of $178 million in the third quarter of 2024, compared with net earnings of $104 million in the third quarter of the previous year.