Great-West Lifeco (GWO) Investor Day 2025 summary

Strategic direction and business transformation

• Shifted to a comprehensive, group-wide focus, highlighting all business segments and emphasizing transformation into a more capital-efficient, cash-generative portfolio over the past five years.

• Enhanced transparency and investor engagement through improved disclosures and supplementary information, tying financial performance to underlying earnings drivers.

• Portfolio now consists of four at-scale business segments, each executing clear strategies to unlock value and drive long-term growth, with a focus on market leadership and disciplined capital allocation.

• Strategic actions included targeted acquisitions (e.g., MassMutual, Prudential, Personal Capital) and divestitures (e.g., US individual markets, Putnam) to sharpen business focus and drive organic growth.

• Emphasis on disciplined cost management, operating leverage, and readiness to exit non-core or subscale businesses to optimize capital deployment.

Financial performance, guidance, and medium-term objectives

• Raised base ROE objective to 19%+, reflecting confidence in growth targets and a continued shift to a more capital-light business mix.

• Introduced a new capital generation objective: generating capital in excess of 80% of base earnings, up from 70-75% over the past five years.

• Maintained medium-term base EPS growth objective of 8-10%, with potential to outperform through strategic deployment of excess capital.

• Dividend payout objective remains at 45-55% of base earnings, supporting attractive shareholder returns and capital preservation.

• Efficiency initiatives have reduced the enterprise expense ratio by 3pp since 2022, with a target of <50% by 2029 and $250–$300M in transformation charges expected over the next 36 months.

Segment strategies and growth drivers

• US segment (Empower) targets double-digit earnings growth, leveraging retirement leadership and expanding into personal wealth, with a focus on the mass affluent market and operational efficiency through automation and AI.

• Canadian segment aims for mid-single-digit earnings growth, driven by leadership in group benefits, expansion in wealth management, and efficiency initiatives, including technology transformation and advisor platform integration.

• European segment expects at least mid-single-digit earnings growth, capitalizing on market leadership in Ireland and the UK, secular tailwinds, and capital optimization in bulk annuities.

• Capital and Risk Solutions (CRS) continues to deliver diversified, countercyclical earnings, focusing on high-return, low-risk transactions and maintaining a balanced portfolio between capital and risk solutions.

• All segments emphasize capital-efficient growth, high base capital generation (80–90% for Canada and Europe, 60–80% for CRS), and increasing base ROE.