Great-West Lifeco Inc. Winnipeg-based (GWL) reported “solid” first-quarter earnings this week, and the Canada Life subsidiary spoke with Advisor.ca about the reasons behind the recent distribution change that is impacting advisors.
GWL net income was $707 million, or $0.76 per common share, in the first quarter of 2021, compared with $342 million, or $0.37 per common share, in the same quarter last year, the company said. Net income in the prior quarter was $912 million, or $0.98 per common share.
Basic earnings for the first quarter of 2021 were $739 million, or $0.80 per common share, compared to $543 million, or $0.59 per common share, a year earlier. The results compared with $741 million, or $0.80 per common share, in the prior quarter.
“Great-West Lifeco reported a solid first quarter to start its fiscal year, driven by strong results across all segments,” Paul Mahon, president and CEO of Great-West Lifeco, said in the release. “The company continued to demonstrate solid growth despite the easing impact of the Covid-19 pandemic.”
According to the release, the 36% year-over-year increase in underlying earnings reflects GWL’s acquisition of Massachusetts Mutual Life Insurance Company’s retirement services business in December 2020, as well as growth of its capital and risk solutions business and market performance. .
He noted that year-ago profits reflected the impact of market declines as the pandemic began.
Assets under administration were $2.1 trillion at the end of the quarter, up 5% from the previous quarter, primarily due to the impact of equity markets and new business growth, partially offset by the impact of currency changes, the release said.
In terms of the insurer’s Canadian business results, which include Canada Life and some of GWL’s corporate results, net income for the first quarter was $287 million, compared to $151 million in the first quarter of 2020. Net income for the previous quarter was $300 million .
Also for the Canadian company, core profit for the first quarter was $298 million compared to $273 million for the first quarter of 2020, driven by favorable morbidity experiences in the group segment and new business in the consumer segment, as reported in message.
Canadian individual and property insurance sales were $3.4 billion, up from $2.9 billion in the first quarter of 2020, partly driven by higher sales of individual mutual funds, according to a shareholder report.
The Canadian company 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 company, total assets under management were $214 billion, up from $190 billion in the first quarter of 2020 and unchanged from the previous quarter.
Canada Life introduces advisory solutions
In 2019, GWL consolidated its three insurance subsidiaries under the Canada Life banner, making further changes to its products, wholesale and teams – with the aim of providing a broad spectrum of advisory and distribution methods.
Hugh Moncrieff, executive vice president of advisory network and industry affairs at Canada Life, shared how the company’s ongoing transformation has recently impacted the advisors the company works with: “Our vision is to be the institution that productive financial advisors want to work with,” he said in a statement Wednesday interview.
One of the company’s latest changes is to help advisors brand Freedom 55 Financial – part of the former insurance subsidiary GWL London Life Insurance Co. — in building your own brands.
Advisors will work with Advisor Solutions, the company’s new distribution platform that officially launched in late April, to access products and expertise to grow and manage their business. For example, Canada Life recently partnered with fintech Conquest Planning and strengthened its business solutions consulting group, and the company is also introducing a financial planning consultant role.
“We are investing significantly in improving the relationship we have with our Freedom 55 advisors,” who are “evolving into a more collaborative relationship with us,” Moncrieff said.
This evolution will also help develop brand loyalty for Canada Life, providing advisors with a streamlined brand, Moncrieff added.
While the Freedom 55 brand is “a very important part” of the company and will continue to be, “we have taken the approach that we want to invest in advisor brands and their partnership with Canada Life,” he said.
Moncrieff also stressed the importance of recognizing advisors’ individual needs.
“Not all advisors are at the same stage,” he said. Whether they are new, building their business, or thinking about retirement, “we try to meet with (…) advisors at the stage of their business journey.”
Advisors in particular are looking for help in attracting and developing talent to grow their companies, and “we have the infrastructure, the expertise, the skills and the people to help them do that,” Moncrieff said.
Canada Life is also focused on growing its managing agency (MGA) business, and digital onboarding is an important element of this.
“In March alone, over 50% of all our life insurance applications were submitted digitally,” including through MGA, Moncrieff said. “We strive (…) to be the partner of choice in terms of how advisors want to work.”
