Great-West Lifeco (GWO) Q2 2024 earnings summary

Executive summary

• Achieved record base and net earnings, both exceeding $1 billion for the first time, with strong performance across all segments and a fourth consecutive quarter of record base earnings.

• U.S. segment, led by Empower, delivered double-digit earnings growth and is on track to become the largest segment in the portfolio in 2024.

• Maintained strong regulatory capital levels, providing resilience against market volatility and downside protection.

• Successful integration of Prudential’s U.S. retirement business, exceeding retention and synergy targets.

• Diversified earnings mix and strong capital position support financial flexibility and strategic opportunities.

Financial highlights

• Base earnings reached $1,038 million and base EPS was $1.11, both up 13% year-over-year; net earnings were $1,005 million.

• Base ROE increased to 17.2%, up over a full percentage point from the prior year; net ROE was 16.2%.

• Book value per share rose 9% year-over-year to $25.36.

• LICAT ratio stood at 130%, up 1% from the prior quarter; leverage ratio at 29%.

• Assets under administration grew to $2.93 trillion, up from $2.64 trillion a year ago.

Outlook and guidance

• Confident in delivering full-year base earnings growth at or near the high end of the 8%-10% medium-term objective.

• U.S. segment expected to become the largest contributor to base earnings in 2024, with targeted growth of 15-20% over 2023.

• Monitoring external risks such as geopolitical trends, equity market volatility, and interest rate changes, but well-positioned due to business diversification.

• Continued focus on disciplined execution, organic growth, and realization of cost synergies.

• Empower is on track to meet its 2024 base earnings growth objective of 15-20%.