Great-West Lifeco (GWO) Q3 2024 earnings summary

Executive summary

• Achieved record base earnings for the fifth consecutive quarter, reaching $1,061 million ($1.14 per share), up 12% year-over-year, with strong momentum across all segments and assets under administration surpassing $3 trillion for the first time.

• Base EPS up 14% year-to-date, on track to exceed 2024 objectives; base ROE at 17.3%, nearly 300 basis points higher for Empower.

• Empower segment delivered double-digit base earnings growth (+35% YoY in U.S.), with base ROE up nearly 300 bps in the past 12 months.

• Positive net economic impact from annual actuarial assumption reviews, with longevity updates and policyholder behavior changes, contributing to capital levels.

• Actions in the quarter advanced wealth and workplace strategies, including acquisitions and new distribution agreements.

Financial highlights

• Base earnings exceeded CAD 1 billion ($1,061M), with base EPS of CAD 1.14 ($1.14), both up 12% year-over-year.

• Net earnings from continuing operations were $859 million ($0.92 per share), down 9% year-over-year due to less favorable interest rate impacts and assumption changes.

• Book value per share increased 7% year-over-year to $25.78; regulatory capital position strengthened, with LICAT ratio rising to 134%.

• Leverage ratio at 29%, down 2 points from a year ago.

• Quarterly dividend of $0.555 per share approved for payment on December 31, 2024.

Outlook and guidance

• Confident in meeting or exceeding medium-term financial objectives, anticipating a strong close to 2024.

• Base EPS and ROE on track to exceed medium-term objectives for 2024.

• Empower segment expected to continue outpacing industry with a 5-year organic AUA CAGR of 14%, double the industry rate.

• Expect to end the year with a LICAT ratio around 130% after planned dividend increases.

• U.S. segment expected to deliver on base earnings growth objective for 2024, supported by Empower's performance.