Great-West profit rises as U.S. retirement business powers growth

Retirement and wealth deliver the lift

Great-West Lifeco reported second-quarter net earnings attributable to common shareholders of C$1.04 billion, up 16% from C$894 million a year earlier. Base earnings, the insurer’s preferred measure of underlying performance, rose 11% to C$1.27 billion, while base earnings per share increased 15% to C$1.42.tradingview That per-share result topped the C$1.37 average analyst estimate.scanx

The gain was led by Empower, its U.S. retirement and wealth platform. U.S. segment base earnings climbed 34% to C$458 million, helped by higher fee income, favorable markets, net inflows and operating leverage. Capital and Risk Solutions also advanced sharply, with base earnings rising 35% to C$310 million on new-business growth.aol

Strong markets expose an uneven quarter

The headline growth was not uniform. Canadian base earnings fell 9% to C$341 million as weaker group-benefits insurance experience offset gains tied to higher retirement and wealth assets. European base earnings edged up 2%, while the corporate segment’s base loss widened to C$105 million from C$58 million.tradingview

Net earnings also trailed the C$1.27 billion base result because of C$231 million in excluded items, including unfavorable market experience driven mainly by interest-rate movements. That gap matters for investors: base earnings remove market effects, assumption changes, transformation costs and other items, so they are useful for tracking operations but are not an IFRS measure and may not be comparable across insurers.aol

Capital supports expansion and buybacks

Client assets reached C$3.7 trillion at June 30, including C$1.3 trillion managed or advised in higher-margin businesses. Great-West’s 19.3% base return on equity cleared its medium-term objective of at least 19% for a second consecutive quarter, while its Canada Life capital ratio held at 128%.tradingview The result extends momentum from the first quarter, when base earnings rose 20% and retirement, wealth and capital-solutions activity drove growth.investmentexecutive

The insurer repurchased C$336 million of common shares during the quarter and plans to double the ceiling of its buyback authorization to 40 million shares. It also retained C$2.5 billion of holding-company cash after the purchases and kept its quarterly common dividend at C$0.67 a share.aol

Management is directing more capital toward fee-based retirement and wealth operations. Empower’s planned US$340 million purchase of Milliman’s retirement-plan and benefits-administration business would add about US$130 billion in client assets and 1.5 million participants, subject to closing conditions. The strategy aligns with Great-West’s stated medium-term ambition of 8% to 10% base EPS growth and double-digit U.S. earnings growth.quartr