Great-West Lifeco reports second quarter 2015 results

TSX:GWO

Readers are referred to the cautionary notes regarding Forward-Looking Information and Non-IFRS Financial Measures at the end of this release.  All figures are expressed in Canadian dollars, except as noted.

WINNIPEG, Aug. 5, 2015 /CNW/ - Great-West Lifeco Inc. (Lifeco) has reported net earnings attributable to common shareholders of $659 million or $0.661 per common share for the three months ended June 30, 2015 compared to $615 million or $0.616 per common share for the same period in 2014, an increase of 7%.

For the six months ended June 30, 2015, net earnings attributable to common shareholders were $1,359 million, compared to $1,202 million for the same period in 2014, an increase of 13%.  This represents $1.363 per common share for the six months ended June 30, 2015, compared to $1.203 per common share for the same period in 2014.

Consolidated assets under administration at June 30, 2015 were $1.1 trillion, up $85 billion from December 31, 2014.

Highlights - In Quarter

  • Total Company sales in the second quarter of 2015 of $24.5 billion were up 52% from the same quarter in 2014:
    • Canada sales were $3.0 billion, up 4%, due to continued growth of insurance and individual Wealth Management sales.
    • Europe sales were $3.4 billion, up 21%, primarily due to strong growth in Ireland and Germany.
    • Great-West Financial sales were US$7.8 billion, up 250%, due to continued strong sales in Empower Retirement.
    • Putnam gross sales were US$6.9 billion, down 6% overall.  Institutional sales increased 42%, while mutual fund sales decreased by 21%.
  • The last of the policy migration activities for the Irish Life integration successfully concluded during the second quarter of 2015.  The Company now expects to realize €48 million of annualized synergies from the acquisition of Irish Life, exceeding the annualized synergy target of €40 million by 20%.
  • The Company maintained a strong ROE of 15.7% based on net earnings.
  • The Company's capital position remained very strong. The Great-West Life Assurance Company reported a Minimum Continuing Capital Surplus Requirements (MCCSR) ratio of 229% at June 30, 2015.
  • The Company declared a quarterly common dividend of $0.3260  per common share payable September 30, 2015.

OPERATING RESULTS
Consolidated net earnings of Lifeco include the net earnings of The Great-West Life Assurance Company (Great-West Life) and its operating subsidiaries London Life Insurance Company (London Life) and The Canada Life Assurance Company (Canada Life) and Irish Life Group Limited (Irish Life); Great-West Life & Annuity Insurance Company (Great-West Financial) and Putnam Investments, LLC (Putnam), together with Lifeco's Corporate operating results.

CANADA
The Canada segment of Lifeco includes the operating results of the Canadian businesses operated by Great-West Life, London Life and Canada Life, together with an allocation of a portion of Lifeco's corporate results.  The three primary business units included in this segment are Individual Insurance, Wealth Management and Group Insurance.  Great-West Life, London Life and Canada Life provide accumulation, annuity, life, disability and critical illness insurance products to individual and group clients.

Net earnings attributable to common shareholders for the second quarter of 2015 were $308 million, up 1% compared to $304 million in the second quarter of 2014.  For the six months ended June 30, 2015, net earnings attributable to common shareholders were $607 million compared to $598 million for the same period in 2014.

Total sales in the second quarter of 2015 of $3.0 billion compared to $2.9 billion in the second quarter of 2014.  This reflects strong participating life insurance sales, higher individual investment funds sales and higher creditor sales, partially offset by lower group retirement product sales.  Total sales for the six months ended June 30, 2015 were $6.2 billion compared to $6.1 billion for the same period in 2014.

Total Canada segment assets under administration at June 30, 2015 were $166 billion, compared to $161 billion at December 31, 2014.

UNITED STATES
The United States operating results for Lifeco include the results of Great-West Financial, Putnam and the insurance businesses in the United States branches of Great-West Life and Canada Life, together with an allocation of a portion of Lifeco's corporate results.

Great-West Financial, and specifically the Empower Retirement brand, provides an array of financial security products, including employer-sponsored defined contribution plans, administrative and record-keeping services, individual retirement accounts, fund management and investment and advisory services.  It also provides life insurance and annuity products and executive benefits products.  Putnam provides investment management, certain administrative functions, distributions and related services through a broad range of investment products.

Net earnings attributable to common shareholders for the second quarter of 2015 were $67 million, reflecting Great-West Financial net earnings of $70 million and a net loss of $3 million for Putnam, compared to $69 million in the second quarter of 2014.  For the six months ended June 30, 2015, net earnings attributable to common shareholders were $188 million compared to $110 million for the same period in 2014.

Great-West Financial sales in the second quarter of 2015 were US$7.8 billion, up from US$2.2 billion in the second quarter of 2014, primarily due to an increased number of large plan sales in Empower Retirement.  Sales for the six months ended June 30, 2015 were US$15.8 billion compared to US$5.1 billion in 2014.

Putnam in-quarter average assets under management as at June 30, 2015 were US$160 billion compared to US$155 billion a year ago, an increase of over 3%, primarily due to the impact of positive market and investment performance.  Net asset outflows for the second quarter of 2015 were US$1.8 billion compared to net asset inflows of US$0.2 billion for the same quarter in 2014. 

Total United States segment assets under administration at June 30, 2015 were $760 billion compared to $697 billion at December 31, 2014.

EUROPE
The Europe segment comprises two distinct business units: Insurance & Annuities and Reinsurance, as well as an allocation of Lifeco's corporate results.  Insurance & Annuities provides protection and wealth management products including payout annuities, through subsidiaries of Canada Life in the U.K., Isle of Man and Germany, and through Irish Life in Ireland.  Reinsurance operates primarily in the U.S., Barbados and Ireland, and is conducted through Canada Life, London Life and their subsidiaries.

Net earnings attributable to common shareholders for the second quarter of 2015 were $289 million, up 17% compared to $246 million in the second quarter of 2014.  For the six months ended June 30, 2015, net earnings attributable to common shareholders were $575 million compared to $505 million for the same period in 2014.

Insurance & Annuities sales for the second quarter of 2015 were $3.4 billion, compared to $2.8 billion a year ago, an increase of 21%.  The increase primarily reflects strong sales in Ireland and Germany.  Sales for the six months ended June 30, 2015 were $7.9 billion compared to $6.3 billion for the same period in 2014.

Total Europe segment assets under administration at June 30, 2015 were $222 billion, up from $205 billion at December 31, 2014.

LIFECO CORPORATE
The Lifeco Corporate segment includes operating results for activities of Lifeco that are not associated with the major business units of the Company.

Lifeco Corporate segment net loss attributable to common shareholders was $5 million in the second quarter of 2015 compared to a net loss of $4 million in the second quarter of 2014.  For the six months ended June 30, 2015, the net loss attributable to common shareholders of $11 million was comparable to the same period in 2014.

QUARTERLY DIVIDENDS

At its meeting today, the Board of Directors approved a quarterly dividend of $0.3260 per share on the common shares of the Company payable September 30, 2015 to shareholders of record at the close of business September 2, 2015.

In addition, the Directors approved quarterly dividends on:

  • Series F First Preferred Shares of $0.36875 per share;
  • Series G First Preferred Shares of $0.3250 per share;
  • Series H First Preferred Shares of $0.30313 per share;
  • Series I First Preferred Shares of $0.28125 per share;
  • Series L First Preferred Shares of $0.353125 per share;
  • Series M First Preferred Shares of $0.36250 per share;
  • Series N First Preferred Shares of $0.228125 per share;
  • Series P First Preferred Shares of $0.3375 per share;
  • Series Q First Preferred Shares of $0.321875 per share;
  • Series R First Preferred Shares of $0.3000 per share; and
  • Series S First Preferred Shares of $0.328125 per share

all payable September 30, 2015 to shareholders of record at the close of business September 2, 2015.

For purposes of the Income Tax Act (Canada), and any similar provincial legislation, the dividends referred to above are eligible dividends.

GREAT-WEST LIFECO

Great-West Lifeco Inc. (TSX:GWO) is an international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses.  Great-West Lifeco has operations in Canada, the United States, Europe and Asia through Great-West Life, London Life, Canada Life, Irish Life, Great-West Financial and Putnam Investments.  Great-West Lifeco and its companies have $1.1 trillion in assets under administration and are members of the Power Financial Corporation group of companies.

Cautionary note regarding Forward-Looking Information
This release contains some forward-looking statements about the Company, including its business operations, strategy and expected financial performance and condition.  Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" and similar expressions or negative versions thereof.  In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions by the Company, including statements made with respect to the expected benefits of acquisitions and divestitures, are also forward-looking statements.  Forward-looking statements are based on expectations and projections about future events that were current at the time of the statements and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the financial services industry generally, including the insurance and mutual fund industries.  They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements.  Material factors and assumptions that were applied in formulating the forward-looking information contained herein include the assumption that the business and economic conditions affecting the Company's operations will continue substantially in their current state, including, without limitation, with respect to market prices for products provided, sales levels, premium income, fee income, expense levels, mortality experience, morbidity experience, policy lapse rates, reinsurance, taxes, inflation, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, investment values, global equity and capital markets, business competition, continuity and availability of personnel and third party service providers, the Company's ability to complete strategic transactions and integrate acquisitions and that there will be no unplanned material changes to the Company's facilities, customer and employee relations or credit arrangements.  Many of these assumptions are based on factors and events that are not within the control of the Company and there is no assurance that they will prove to be correct.  Other important factors and assumptions that could cause actual results to differ materially from those contained in forward-looking statements include technological change, breaches or failure of information systems and security (including cyber attacks), payments required under investment products, changes in local and international laws and regulations, changes in accounting policies and the effect of applying future accounting policy changes, unexpected judicial or regulatory proceedings and catastrophic events.  The reader is cautioned that the foregoing list of assumptions and factors is not exhaustive, and there may be other factors listed in other filings with securities regulators, including factors set out in the Company's 2014 Annual MD&A under "Risk Management and Control Practices" and "Summary of Critical Accounting Estimates", which, along with other filings, is available for review at www.sedar.com.  The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements.  Other than as specifically required by applicable law, the Company does not intend to update any forward-looking statements whether as a result of new information, future events or otherwise.

Cautionary note regarding Non-IFRS Financial Measures

This release contains some non-IFRS financial measures.  Terms by which non-IFRS financial measures are identified include, but are not limited to, "operating earnings", "constant currency basis", "premiums and deposits", "sales", "assets under management", "assets under administration" and other similar expressions.  Non-IFRS financial measures are used to provide management and investors with additional measures of performance to help assess results where no comparable IFRS measure exists.  However, non-IFRS financial measures do not have standard meanings prescribed by IFRS and are not directly comparable to similar measures used by other companies.  Please refer to the appropriate reconciliations of these non-IFRS financial measures to measures prescribed by IFRS.

Further information
Selected financial information is attached.

Great-West Lifeco's second quarter conference call and audio webcast will be held August 6, 2015 at 11:30 a.m. (ET).  The call and webcast can be accessed through www.greatwestlifeco.com or by phone at:

  • Participants in the Toronto area:  416-340-2218 
  • Participants from North America: 1-800-396-7098
  • For International participants:  Look up the dial-in information for your location here: 

https://www.confsolutions.ca/ILT?oss=1P49R8003967098

A replay of the call will be available from August 6, 2015 to August 13, 2015, and can be accessed by calling 1-800-408-3053 or 905-694-9451 in Toronto (passcode: 1428889). The archived webcast will be available on www.greatwestlifeco.com from August 6, 2015 to August 5, 2016.

Additional information relating to Lifeco, including the most recent interim unaudited consolidated financial statements, interim Management's Discussion and Analysis (MD&A) and CEO/CFO certification will be filed on SEDAR at www.sedar.com.

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FINANCIAL HIGHLIGHTS (unaudited)
(in Canadian $ millions except per share amounts)
           
    As at or for the three months ended     For the six months ended
      June 30
2015
    March 31
2015
    June 30
2014(2)(4)
      June 30
2015
    June 30
2014(2)(4)
Premiums and deposits:                                
  Net premium income (Life insurance,
 guaranteed annuities and insured
 health products)
   $ 5,516    $ 6,932    $ 5,764      $ 12,448    $ 11,031
  Policyholder deposits (segregated funds):                                
    Individual products     3,031     2,981     2,830       6,012     5,776
    Group products     1,835     2,035     1,940       3,870     5,304
Premiums and deposits     10,382     11,948     10,534       22,330     22,111
    Self-funded premium equivalents
 (Administrative services only contracts)(1)
    659     662     658       1,321     1,316
    Proprietary mutual funds and institutional deposits(1)(2)     11,032     12,938     9,592       23,970     21,887
Total premiums and deposits(1)     22,073     25,548     20,784       47,621     45,314
                                 
Fee and other income     1,226     1,258     1,110       2,484     2,169
Paid or credited to policyholders(3)     1,588     9,889     7,580       11,477     15,069
                                 
Earnings                                
Net earnings - common shareholders    $ 659    $ 700    $ 615      $ 1,359    $ 1,202
Per common share                                
    Basic earnings     0.661     0.702     0.616       1.363     1.203
    Dividends paid     0.3260     0.3260     0.3075       0.652     0.615
    Book value(4)     18.28     17.68     15.87              
                                 
Return on common shareholders' equity(4)(5)                                
  Operating earnings(6)     15.7%     16.0%     14.5%              
  Net earnings     15.7%     16.0%     16.0%              
                                 
Total assets(4)    $ 376,428    $ 381,331    $ 344,351              
  Proprietary mutual funds and institutional net assets(7)     232,168     238,650     200,113              
Total assets under management(4)(7)     608,596     619,981     544,464              
  Other assets under administration(8)     539,259     556,893     260,079              
Total assets under administration(4)    $ 1,147,855    $ 1,176,874    $ 804,543              
Total equity(4)    $ 23,470    $ 22,888    $ 20,951              
                                 

(1) In addition to premiums and deposits reported in the financial statements, the Company includes premium equivalents on self-funded group insurance administrative
services only (ASO) contracts and deposits on proprietary mutual funds and institutional accounts to calculate total premiums and deposits (a non-IFRS financial
measure).  This measure provides useful information as it is an indicator of top line growth.
(2) Comparative figures for premiums and deposits (a non-IFRS financial measure) have been restated for consistency across the Company's business units.
(3) Paid or credited to policyholders includes the impact of changes in fair values of assets supporting insurance and investment contract liabilities.
(4) Comparative figures have been adjusted as described in note 2 to the Company's condensed consolidated interim unaudited financial statements for the period
ended June 30, 2015.
(5) Return on shareholders' equity is detailed within the "Capital Allocation Methodology" section of the Company's June 30, 2015 Management's Discussion and Analysis.
(6) Operating earnings (a non-IFRS financial measure) excludes the impact of certain litigation provisions described in note 32 to the Company's December 31, 2014
consolidated annual audited financial statements.
(7) Total assets under management (a non-IFRS financial measure) provides an indicator of the size and volume of the overall business of the Company.  Services
provided in respect of assets under management include the selection of investments, the provision of investment advice and discretionary portfolio management
on behalf of clients.  This includes internally and externally managed funds where the Company has oversight over the investment policies.
(8) Other assets under administration (a non-IFRS financial measure) includes assets where the Company only provides administration services for which the Company
earns fee and other income.  These assets are beneficially owned by clients and the Company does not direct the investing activities.  Services provided relating
to assets under administration includes recordkeeping, safekeeping, collecting investment income, settling of transactions or other administrative services.  Administrative
services are an important aspect of the overall business of the Company and should be considered when comparing volumes, size and trends.

 

CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
(in Canadian $ millions except per share amounts)
                               
    For the three months ended     For the six months ended
 
 


June 30
2015


March 31
2015


June 30
2014



June 30
2015


June 30
2014
                                 
Income                                
  Premium income                                
    Gross premiums written    $ 6,410    $ 7,806    $ 6,646      $ 14,216    $ 12,757
    Ceded premiums      (894)      (874)      (882)        (1,768)      (1,726)
  Total net premiums      5,516      6,932      5,764        12,448      11,031
  Net investment income                                 
    Regular net investment income      1,519      1,536      1,526        3,055      3,015
    Changes in fair value through profit or loss      (4,037)      2,953      1,670        (1,084)      3,792
  Total net investment income      (2,518)      4,489      3,196        1,971      6,807
  Fee and other income      1,226      1,258      1,110        2,484      2,169
       4,224      12,679      10,070        16,903      20,007
Benefits and expenses                                
  Policyholder benefits                                
    Insurance and investment contracts                                
      Gross      5,127      5,640      4,592        10,767      9,393
      Ceded      (490)      (483)      (476)        (973)      (951)
  Total net policyholder benefits      4,637      5,157      4,116        9,794      8,442
  Policyholder dividends and experience refunds      374      381      358        755      746
  Changes in insurance and investment contract liabilities      (3,423)      4,351      3,106        928      5,881
  Total paid or credited to policyholders      1,588      9,889      7,580        11,477      15,069
                                   
  Commissions      554      515      546        1,069      1,051
  Operating and administrative expenses      1,081      1,078      915        2,159      1,848
  Premium taxes      80      84      83        164      168
  Financing charges       75      77      76        152      152
  Amortization of finite life intangible assets      37      36      32        73      65
  Restructuring and acquisition expenses       14      7      10        21      15
Earnings before income taxes      795      993      828        1,788      1,639
Income taxes        86      224      156        310      329
Net earnings before non-controlling interests      709      769      672        1,478      1,310
Attributable to non-controlling interests      19      37      28        56      50
Net earnings      690      732      644        1,422      1,260
Preferred share dividends      31      32      29        63      58
Net earnings - common shareholders    $ 659    $ 700    $ 615      $ 1,359    $ 1,202
                                 
Earnings per common share                                 
  Basic    $ 0.661    $ 0.702    $ 0.616      $ 1.363    $ 1.203
  Diluted    $ 0.659    $ 0.700    $ 0.615      $ 1.359    $ 1.202

 

CONSOLIDATED BALANCE SHEETS (unaudited)
(in Canadian $ millions)
             



June 30
2015


December 31
2014
Assets            
Cash and cash equivalents    $ 2,688    $ 2,498
Bonds       108,452      103,168
Mortgage loans       21,104      20,546
Stocks       7,826      7,820
Investment properties       5,220      4,613
Loans to policyholders      8,221      7,711
       153,511      146,356
Funds held by ceding insurers      14,050      12,154
Goodwill      5,865      5,855
Intangible assets      3,768      3,625
Derivative financial instruments      466      652
Owner occupied properties      629      619
Fixed assets      255      228
Reinsurance assets       5,139      5,151
Premiums in course of collection, accounts and interest receivable      3,444      3,056
Other assets      2,662      2,368
Current income taxes      69      48
Deferred tax assets      1,735      1,631
Investments on account of segregated fund policyholders       184,835      174,966
Total assets    $ 376,428    $ 356,709
             
Liabilities            
Insurance contract liabilities     $ 152,315    $ 145,198
Investment contract liabilities       842      857
Debentures and other debt instruments      5,265      5,355
Funds held under reinsurance contracts      328      313
Derivative financial instruments      1,678      1,195
Accounts payable      2,061      1,480
Other liabilities      3,326      3,099
Current income taxes      537      737
Deferred tax liabilities      1,609      1,450
Capital trust debentures      162      162
Investment and insurance contracts on account of segregated fund policyholders       184,835      174,966
Total liabilities      352,958      334,812
             
Equity            
Non-controlling interests            
  Participating account surplus in subsidiaries      2,547      2,480
  Non-controlling interests in subsidiaries      185      163
Shareholders' equity            
  Share capital             
    Preferred shares      2,514      2,514
    Common shares      7,166      7,102
  Accumulated surplus      9,779      9,134
  Accumulated other comprehensive income      1,170      378
  Contributed surplus      109      126
Total equity      23,470      21,897
Total liabilities and equity    $ 376,428    $ 356,709

 

Segmented Information (unaudited)
Consolidated Net Earnings
                               
For the three months ended June 30, 2015                              
      Canada     United
States
    Europe     Lifeco
Corporate
    Total
Income                              
  Total net premiums    $ 2,839    $ 905    $ 1,772    $  —    $ 5,516
  Net investment income                              
    Regular net investment income      630      390      498      1      1,519
    Changes in fair value through profit or loss      (1,181)      (566)      (2,290)      —      (4,037)
  Total net investment income      (551)      (176)      (1,792)      1      (2,518)
  Fee and other income      366      577      283      —      1,226
       2,654      1,306      263      1      4,224
                               
Benefits and expenses                              
  Paid or credited to policyholders      1,460      543      (415)      —      1,588
  Other (1)      775      614      322      4      1,715
  Financing charges      29      35      10      1      75
  Amortization of finite life intangible assets      15      18      4      —      37
  Restructuring and acquisition expenses      —      3      11      —      14
Earnings (loss) before income taxes      375      93      331      (4)      795
Income taxes (recovery)      47      22      18      (1)      86
Net earnings (loss) before non‑controlling interests      328      71      313      (3)      709
Non‑controlling interests      16      2      1      —      19
Net earnings (loss)      312      69      312      (3)      690
Preferred share dividends      26      —      5      —      31
Net earnings (loss) before capital allocation      286      69      307      (3)      659
Impact of capital allocation      22      (2)      (18)      (2)      —
Net earnings (loss) ‑ common shareholders    $ 308    $ 67    $ 289    $ (5)    $ 659
   
(1) Includes commissions, operating and administrative expenses and premium taxes.


For the three months ended June 30, 2014                              
      Canada     United
States
    Europe     Lifeco
Corporate
    Total
Income                              
  Total net premiums    $ 2,776    $ 832    $ 2,156    $  —    $ 5,764
  Net investment income                              
    Regular net investment income      643      352      529      2      1,526
    Changes in fair value through profit or loss      780      302      588      —      1,670
  Total net investment income      1,423      654      1,117      2      3,196
  Fee and other income      356      436      318      —      1,110
       4,555      1,922      3,591      2      10,070
                               
Benefits and expenses                              
  Paid or credited to policyholders      3,367      1,295      2,918      —      7,580
  Other (1)      728      478      332      6      1,544
  Financing charges      29      35      12      —      76
  Amortization of finite life intangible assets      13      14      5      —      32
  Restructuring and acquisition expenses      —      —      10      —      10
Earnings (loss) before income taxes      418      100      314      (4)      828
Income taxes (recovery)      90      25      42      (1)      156
Net earnings (loss) before non‑controlling interests      328      75      272      (3)      672
Non‑controlling interests      24      2      2      —      28
Net earnings (loss)      304      73      270      (3)      644
Preferred share dividends      24      —      5      —      29
Net earnings (loss) before capital allocation      280      73      265      (3)      615
Impact of capital allocation      24      (4)      (19)      (1)      —
Net earnings (loss) ‑ common shareholders    $ 304    $ 69    $ 246    $ (4)    $ 615
   
(1) Includes commissions, operating and administrative expenses and premium taxes.


For the six months ended June 30, 2015                              
      Canada     United
States
    Europe     Lifeco
Corporate
    Total
Income                              
  Total net premiums    $ 5,506    $ 1,634    $ 5,308    $  —    $ 12,448
  Net investment income                              
    Regular net investment income      1,259      785      1,011      —      3,055
    Changes in fair value through profit or loss      195      (334)      (945)      —      (1,084)
  Total net investment income      1,454      451      66      —      1,971
  Fee and other income      724      1,150      610      —      2,484
       7,684      3,235      5,984      —      16,903
                               
Benefits and expenses                              
  Paid or credited to policyholders      5,225      1,664      4,588      —      11,477
  Other (1)      1,538      1,200      646      8      3,392
  Financing charges      58      71      22      1      152
  Amortization of finite life intangible assets      29      35      9      —      73
  Restructuring and acquisition expenses      —      4      17      —      21
Earnings (loss) before income taxes      834      261      702      (9)      1,788
Income taxes (recovery)      170      66      76      (2)      310
Net earnings (loss) before non‑controlling interests      664      195      626      (7)      1,478
Non‑controlling interests      49      4      3      —      56
Net earnings (loss)      615      191      623      (7)      1,422
Preferred share dividends      52      —      11      —      63
Net earnings (loss) before capital allocation      563      191      612      (7)      1,359
Impact of capital allocation      44      (3)      (37)      (4)      —
Net earnings (loss) ‑ common shareholders    $ 607    $ 188    $ 575    $ (11)    $ 1,359
   
(1) Includes commissions, operating and administrative expenses and premium taxes.


For the six months ended June 30, 2014                              
      Canada     United
States
    Europe     Lifeco
Corporate
    Total
Income                              
  Total net premiums    $ 5,389    $ 1,644    $ 3,998    $  —    $ 11,031
  Net investment income                              
    Regular net investment income      1,281      709      1,027      (2)      3,015
    Changes in fair value through profit or loss      1,727      625      1,440      —      3,792
  Total net investment income      3,008      1,334      2,467      (2)      6,807
  Fee and other income      700      855      614      —      2,169
       9,097      3,833      7,079      (2)      20,007
                               
Benefits and expenses                              
  Paid or credited to policyholders      6,732      2,593      5,744      —      15,069
  Other (1)      1,443      972      642      10      3,067
  Financing charges      58      70      24      —      152
  Amortization of finite life intangible assets      26      29      10      —      65
  Restructuring and acquisition expenses      —      —      15      —      15
Earnings (loss) before income taxes      838      169      644      (12)      1,639
Income taxes (recovery)      195      48      89      (3)      329
Net earnings (loss) before non‑controlling interests      643      121      555      (9)      1,310
Non‑controlling interests      46      3      1      —      50
Net earnings (loss)      597      118      554      (9)      1,260
Preferred share dividends      47      —      11      —      58
Net earnings (loss) before capital allocation      550      118      543      (9)      1,202
Impact of capital allocation      48      (8)      (38)      (2)      —
Net earnings (loss) ‑ common shareholders    $ 598    $ 110    $ 505    $ (11)    $ 1,202
   
(1) Includes commissions, operating and administrative expenses and premium taxes.

  

SOURCE Great-West Lifeco Inc.

For further information:

Marlene Klassen, APR, Assistant Vice-President, Communication Services, 204-946-7705


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