Canada Life Re, comprised predominantly by the Capital and Risk Solutions division, has reported “record” $794 million in earnings for 2023, as its parent company, Great-West Lifeco, sees strong earnings of $3.7 billion for the year.
For the fourth quarter of 2023, the Capital and Risk Solutions division base earnings grew by 30%, to $236 million from $181 million in Q4 2022.
This was primarily due to growth in the structured business and net positive insurance experience from favourable claim developments on prior years’ property catastrophe losses.
These items were partially offset by unfavourable experience in the U.S. life business and on certain structured transactions, the firm noted.
Capital and Risk Solutions’ net earnings for Q4 2023 were $215 million, compared to the $3 million reported in the same period last year.
Canada Life Re CEO Jeff Poulin said: “I am proud to share Great-West Lifeco’s strong 2023 earnings result of $3.7B. Canada Life Re, which comprises the predominance of the Capitol and Risk Solutions division, delivered another record result at $794M.
“ I would like to thank our clients as they continued to trust Canada Life Re to help them manage their risk and capital profile with innovative solutions. The insurance industry faced another challenging year as mortality and longevity continue an unclear path post COVID, while the property and casualty market dealt with what has been a persistently challenging loss environment.
“At the same time, a shock increase from the sustained low-interest rate world impacted both capital ratios and the cost of capital while capital regimes continue to evolve in Asia and other markets.”
Poulin added: “I am proud that the Canada Life Re team helped our partners deal with all these challenges, writing over 30 new agreements including those covering longevity and lapse risk in Europe, health and annuity risk in the USA, P&C risk globally and lapse and mortality risk in Asia. This is merely a sample of the solutions and answers we can and have provided to clients.
“Looking ahead into 2024, we are excited to continue to work with our clients to develop the most flexible and cost-effective solutions to manage risk and capital across the globe.”
Great-West Lifeco results highlights also include net earnings from continuing operations of $743 million, compared to $478 million a year ago.
Compared to a year ago, net earnings are higher as a result of higher base earnings, more favourable market experience and assumptions and management actions the firm noted.
In addition, strategic actions in Europe in the quarter resulted in a net gain of $78 million.
Additionally, its Wealth & Asset Management division saw $30 billion in net inflows, with its Workplace Solutions businesses also delivering strong earnings and growth.
The company’s Group Life & Health book premium was up 22% year-over-year in Canada, and up 14% year over year in Europe.
Empower’s U.S. defined contribution retirement services business continues to grow faster than its peers and has now reached $1.5 trillion, with $11 billion in net inflows in 2023.
