Great-West Lifeco (GWO) investor relations material

Business performance and strategic direction

• Achieved strong business performance in the first year under new leadership, with significant earnings growth and capital generation driving results.

• ROE reached 19.3% last quarter, surpassing medium-term targets set just a year ago; capital light businesses now comprise about two-thirds of earnings and are expected to exceed 70% over the planning period.

• M&A activity remains a consideration, with a 15% IRR target for deals and a focus on strategic fit and scale.

• Buybacks continue as a capital deployment tool, with at least CAD 1.6 billion targeted for the year.

• All current business lines and markets are considered core, with a focus on scaling existing positions, especially in Europe and North America.

Technology and operational efficiency

• AI is being integrated across customer service, back office, and financial reporting, aiming to drive efficiency and support medium-term targets.

• No official AI value targets published yet, but ambitions align with peers and may be discussed in more detail next year.

• The organization is on a multi-year journey to become a "minutes and seconds" operation, with ongoing investment in technology.

Empower and wealth management

• Empower retirement business surpassed CAD 2 trillion in workplace client assets, with Q2 operating margin at 34.7%; some fallback expected due to ongoing brand investment.

• Margin expansion is supported by scale, AI-driven efficiency, and new product offerings, with a long-term target north of 35%.

• Recent acquisitions like Milliman and OptionTrax fill product gaps and enhance bundled offerings, supporting high win rates and further growth.

• Wealth business in the U.S. is young but already exceeds $100 billion in assets and is approaching a 40% margin, driven by close integration with retirement services.

• Rollover capture rate is around 15%, with ambitions to reach mid-20s to high-20s over time through deeper customer relationships and platform enhancements.