Winnipeg-based Great-West Lifeco Inc. (GWL) reported “solid” first-quarter earnings this week, and subsidiary Canada Life spoke to InvestmentExecutive.com about the rationale behind a recent distribution change that affects advisors.
GWL’s net earnings were $707 million, or $0.76 per common share, for the first quarter of 2021 compared with $342 million, or $0.37 per common share, for the same quarter last year, the firm reported. Net earnings in the previous quarter were $912 million, or $0.98 per common share.
Base earnings for the first quarter of 2021 were $739 million, or $0.80 per common share, compared with $543 million or $0.59 per common share a year ago. The results compared with $741 million, or $0.80 per common share, the previous quarter.
“Great-West Lifeco reported a solid first quarter to begin the fiscal year, driven by strong results across segments,” said Paul Mahon, president and CEO of Great-West Lifeco, in a release. “The company has continued to demonstrate solid growth as the impacts of the Covid-19 pandemic have moderated.”
The 36% increase in base earnings year-over-year reflected GWL’s acquisition of the retirement services business of Massachusetts Mutual Life Insurance Company in December 2020, as well as business growth in the capital and risk solutions segment, and market performance, the release said.
It noted that year-ago earnings reflected the impact of market declines when the pandemic began.
Assets under administration were $2.1 trillion at the quarter’s end, an increase of 5% from the previous quarter, primarily due to the impact of equity markets and new business growth, partially offset by the impact of currency movement, the release said.
For the insurer’s Canadian business results, which includes Canada Life and a portion of GWL’s corporate results, net earnings for the first quarter were $287 million, up from $151 million in the first quarter of 2020. Net earnings the previous quarter were $300 million.
Also for the Canadian business, base earnings for the first quarter were $298 million, compared with $273 million in the first quarter of 2020, due to favourable morbidity experience in the group customer segment and new business in the individual customer segment, the release said.
Canadian sales in individual insurance and wealth were $3.4 billion, up from $2.9 billion in the first quarter of 2020, partly boosted by higher individual wealth mutual fund sales, the shareholders report said.
The Canadian business ended the quarter with $416 million in fees from segregated funds and mutual funds, up from $390 million a year ago and $407 million in the previous quarter.
Also for the Canadian business, total assets under administration were $214 billion, up from $190 billion in the first quarter of 2020 and unchanged from the previous quarter.
Canada Life introduces Advisor Solutions
In 2019, GWL consolidated its three insurance subsidiaries under the Canada Life banner, with subsequent changes to products, and wholesaling and teams — aiming to deliver a spectrum of advice and distribution methods.
Hugh Moncrieff, executive vice-president, advisory network and industry affairs with Canada Life, shared how the firm’s continued transformation is most recently affecting the advisors the firm works with: “Our vision is to be the institution that productive financial advisors want to partner with,” he said in an interview on Wednesday.
One of the firm’s latest changes is helping advisors within the Freedom 55 Financial brand — part of former GWL insurance subsidiary London Life Insurance Co. — to build their own brands.
Advisors will partner with Advisor Solutions, the firm’s new distribution platform that was officially introduced at the end of April, to access products and expertise to grow and manage their businesses. For example, Canada Life recently partnered with fintech Conquest Planning and enhanced its business-solutions consulting group, and the firm is also introducing a financial-planning consultant role.
“Where we’re investing significantly is enhancing the relationship we have with our Freedom 55 advisors,” who are “evolving to more of a partnership relationship with us,” Moncrieff said.
That evolution will also help develop an affinity to the Canada Life brand, providing advisors with a streamlined brand, Moncrieff added.
While the Freedom 55 brand is “very much an important part” of the company and will continue to be so, “we’ve taken the approach that we want to invest in advisors’ brands and how they partner with Canada Life,” he said.
Moncrieff also highlighted the importance of recognizing advisors’ individual needs.
“Not all advisors are at the same stage,” he said. Whether they’re new, building their businesses or thinking about retirement, “We’re trying to meet […] advisors where they are in their business journey.”
In particular, advisors are looking for help attracting and developing talent to grow their businesses, and “we have the infrastructure, expertise, skills and people to help them with that,” Moncrieff said.
Canada Life is also focused on growth in its managing general agency (MGA) business, with digital onboarding being an important component of that.
“In March alone, over 50% of all of our life insurance applications were submitted digitally,” including through MGAs, Moncrieff said. “We’re trying to […] be the partner of choice for how advisors want to work.”