Mr. Paul Mahon reports

GREAT-WEST LIFECO REPORTS RECORD BASE EARNINGS IN THE FOURTH QUARTER OF 2023; ANNOUNCES 7% DIVIDEND INCREASE

Great-West Lifeco Inc. has released its fourth quarter 2023 results.

"Our continued strong performance is supported by a solid foundation of diversified businesses and the disciplined actions we've taken to reposition our portfolio," said Paul Mahon, president and chief executive officer, Great-West Lifeco. "We've delivered back-to-back quarters with record base earnings per share, while at the same time positioning the company for future growth."

"This quarter also marks a transition of senior leadership as we welcome Jon Nielsen and Fabrice Morin as the company's incoming chief financial officer, Great-West Lifeco, and president and chief operating officer, Canada, respectively, on Feb. 16, 2024," continued Mr. Mahon. "I'd like to personally congratulate Garry MacNicholas, Jeff Macoun and Arshil Jamal on their retirements and thank them for their dedicated contributions to our company's success over their careers, which each spanned many decades."

Record base earnings of $971-million or $1.04 per common share, up 9 per cent from $894-million a year ago, reflect the actions the company has taken to reposition the portfolio. This includes investments made to add scale and capabilities at Empower to strengthen its DC record-keeping business and accelerate growth in its personal wealth business. It also reflects the impact of favourable economic conditions as higher average equity markets have resulted in higher fee income and higher interest rates have increased earnings on surplus.

Net earnings from continuing operations of $743-million, or 80 cents per common share, compared with $478-million a year ago. Compared with a year ago, net earnings are higher as a result of higher base earnings, more favourable market experience and assumptions, and management actions. In addition, strategic actions in Europe in the quarter resulted in a net gain of $78-million.

Highlights:

• The company's focused strategy, disciplined execution and trusted brands are driving strong performance and value creation for shareholders:
  • Two thousand twenty-three base earnings reached $3.7-billion, up 11 per cent from 2022. Q4 2023 marked back-to-back quarters with record base earnings per share. Empower surpassed $1-billion base earnings, exceeding the objective announced at the beginning of 2023.
  • The company delivered on its medium-term financial objectives:
    • 11-per-cent base EPS compound annual growth rate over five years;
    • 16-per-cent base return on equity average over two years;
    • 56-per-cent base earnings average dividend payout ratio over five years.
  • Book value per share was $24.26, up 4 per cent year over year.
  • Canada Life was named the top-three most valuable brand in Canada by Brand Finance.
• Actions to reposition and improve capital efficiency are supporting the company's near- and long-term growth:
  • Sale of Putnam Investments to Franklin Templeton on Jan. 1, 2024, unlocks value and furthers Lifeco's strategy of building and extending strategic partnerships with best-in-class asset managers to support clients' retirement, group benefits and personal wealth management needs.
  • The integration of Prudential's full-service retirement service business has to date achieved above target client retention and $80-million (U.S.) of pretax run rate cost synergies. The integration remains on track to deliver the remaining expected synergies and be completed in 2024 as planned.
  • The company completed the acquisition of Investment Planning Counsel, which, along with the acquisition of Value Partners, is supporting its goal of becoming a leading destination for entrepreneurial advisers and their clients. Together, at the end of 2023, it had over 16,000 adviser relationships and more than $100-billion in assets under administration.
  • The company undertook several strategic actions to help strengthen its market positions in Europe, improve capital efficiency and enhance the outlook for 2024, including:
    • Completing the sale of a portfolio of existing policies to AIB Life;
    • Closed new business for subscale United Kingdom onshore wealth business;
    • Reinsured an existing block of annuity business in the U.K. at attractive terms.
  • The company's leverage ratio decreased to 30 per cent from 33 per cent after the repayment of $500-million in short-term debt related to the Prudential acquisition and a maturing 500-million-euro bond that was prefinanced in late 2022.

There is strong momentum across all three of the company's value drivers:

• Wealth and asset management:
  • $30-billion in net inflows across wealth and workplace retirement businesses.
  • Empower Personal Wealth, launched in the first quarter of 2023, continued its strong growth with $18-billion total sales in 2023 (up 13 per cent year over year) and ended Q4 2023 with an AUA of $72-billion, up 31 per cent from Q4 2022.
• Workplace solutions:
  • Workplace businesses continue to deliver strong earnings and growth:
    • Group life and health book premium, up 22 per cent year over year in Canada and up 14 per cent year over year in Europe;
    • Empower's U.S. defined contribution retirement service business continues to grow faster than its peers and has now reached $1.5-trillion (U.S.) in AUA (up 17 per cent YoY). Net inflows in 2023 were $11-billion (U.S.).
• Insurance and risk solutions:
  • Consistent performance supports earnings growth and diversification of the company:
    • Capital and risk solutions base earnings grew by 30 per cent compared with Q4 2022, including favourable claim experience on prior years property and catastrophe losses. The quarter also showed solid momentum in new business sales and growth in structured reinsurance business.
    • Growth of contractual service margin in Europe was a result of strong sales of U.K. individual annuities and bulk annuities and favourable assumption changes.

Quarterly dividends

The board of directors approved a quarterly dividend of 55.5 cents per share on the common shares of Lifeco payable March 28, 2024, to shareholders of record at the close of business Feb. 29, 2024.

In addition, the directors approved quarterly dividends on Lifeco's preferred shares.

      DIVIDENDS ON LIFECO'S 
        PREFERRED SHARES

First preferred    Amount per share
shares

Series G                    $0.3250          
Series H                   $0.30313         
Series I                   $0.28125         
Series L                  $0.353125        
Series M                    $0.3625          
Series N                  $0.109313        
Series P                    $0.3375          
Series Q                  $0.321875        
Series R                    $0.3000          
Series S                  $0.328125        
Series T                  $0.321875        
Series Y                   $0.28125         

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

Fourth quarter conference call

Lifeco's fourth quarter conference call and audio webcast will be held on Thursday, Feb. 15, at 2 p.m. ET. The call and webcast will be available through the Great-West Lifeco website or by phone at the following.

Participants in the Toronto area:  416-915-3239

Participants from North America:  1-800-319-4610

A replay of the call will be available until March 15, 2024, by calling 604-674-8052 or 1-855-669-9658 (passcode: 0644). The archived webcast will be available on the Great-West Lifeco website.

Selected financial information is attached.

About Great-West Lifeco Inc.

Great-West Lifeco is a Canadian headquartered, international financial service holding company with interests in life insurance, health insurance, retirement and investment services, asset management, and reinsurance businesses. It operates in Canada, the United States and Europe under the brands Canada Life, Empower and Irish Life. At the end of 2023, its companies had over 33,500 employees, 232,000 adviser relationships and thousands of distribution partners -- serving approximately 42 million customer relationships.

Great-West Lifeco trades on the Toronto Stock Exchange under the ticker symbol GWO and is a member of the Power Corp. group of companies.

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