Great-West Lifeco Inc.

Thank you for standing by. This is the conference operator. Welcome to the Great West LifeCo fourth quarter 2023 results conference call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there'll be an opportunity for analysts to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Mr. Paul Mem, President and CEO of Great West Life Co. Please go ahead.

Thanks, Ariel. Good afternoon and welcome to Great West Life Co.' 's fourth quarter and year-end 2023 conference call. Joining me on today's call is Gary McNicholas, Executive Vice President and Chief Financial Officer, and also joining us on the call and available to answer your questions are Jeff McCallan, President and COO of Canada, Arshil Jamal, President and Group Head, Strategy Investments, Reinsurance and Corporate Development, Raman Srivastava, Executive Vice President and Global Chief Investment Officer, David Harney, President and COO, Europe, and Ed Murphy, President and CEO of Empower. I've asked David Harney and Ed Murphy to deliver part of our formal presentation to highlight significant milestones in their segments. I'll now draw your attention to our cautionary notes regarding forward-looking information and non-GAAP financial measures and ratios on slide two. These cautionary notes apply to the information we will discuss during the call today. Please turn to slide four. Building on our strong earnings trajectory through 2023, we delivered excellent results this quarter. We're thrilled to close the year with record-based earnings in the fourth quarter and back-to-back quarters with record-based EPS. Our focus strategy, supported by disciplined execution and trusted brands, continues to deliver strong performance against our value creation agenda, including our medium-term financial objectives. We have strong momentum across our value drivers. Of note, our wealth and retirement businesses remain a point of particular strength, together generating $30 billion in positive net flows this year. At Empower, we crossed the $1 billion Canadian base earnings mark, exceeding the objective we set at the beginning of 2023. The actions we've taken to reposition the portfolio and enhance capital efficiency are supporting both our near-term and long-term growth. On January 1st, we completed the sale of Putnam Investments to Franklin Templeton. This combination furthers our strategy of building strategic partnerships with best-in-class asset managers to support our customers and clients. The transaction was executed on attractive terms, and Gary will share more on this later in the presentation. In Europe, we closed to new business for our subscale onshore wealth business and reinsured a large block of annuity business to improve capital efficiency. David Harney will take you through these actions and provide a strategic update on Europe following my comments. Please turn to slide five. Our fourth quarter results close an outstanding year across LIFCO. Base earnings of $3.7 billion and base EPS of $3.94 both increased 11% over the prior year. Base ROE increased to 17%, up nearly a full percentage point over the prior year. And book value per share also increased. Our capital position remains strong with a solid and stable LICAT ratio. our leverage ratio decreased to 30% following the repayment of 100 million in short-term U.S. dollar debt related to the prudential acquisition and repayment of a 500 million euro bond. Please turn to slide six. Our reposition portfolio continues to support strong performance against our medium-term financial objectives. We delivered at or above these objectives on a one- and five-year basis. Base EPS growth of 11% exceeded our target range of 8% to 10% over both time periods. Base ROE of 17% and a dividend payout ratio of 53% in 2023 were within our target ranges. Please note that we've shown a two-year average base ROE of 16% in the five-year column, as there are no applicable IFRS 17 figures for the prior years. Our focus on disciplined capital allocation across our three value drivers leaves us well positioned for continued strong growth. Please turn to slide seven. We've seen tremendous performance in our Empower business. Over the next few months, we'll take the final steps in the integration of Prudential's retirement business. So it's a good time to take a closer look at how we've repositioned our U.S. business for growth today and into the future. In 2018, LIFCO had three distinct businesses in the US. While each business had strong teams and capabilities, they were subscale. One of our core LIFCO strategies has been to build scale businesses with strong organic growth potential. This drove our decision to increase focus on the anticipated consolidation of the US retirement market. Over the last five years, we've undertaken multiple transactions to position Empower with the scale and capabilities to drive long-term sustainable growth for LifeCo. An early step was the divestiture of our individual life insurance and annuity business in 2019, bringing up capital and sharpening our focus on Empower growth. The acquisition of the retirement businesses of MassMutual and Prudential significantly expanded Empower's retirement scale and capabilities. Together, these acquisitions, along with Empower's market-leading organic growth, have positioned us as the second largest workplace retirement plan provider in the United States. And the 2020 addition of personal capital introduced new capabilities that supported the launch of Empower Personal Wealth. This business extends Empower's reach from the workplace to where it now has the potential to serve the wealth management needs of millions of Americans while in plan, after rollover, or through direct to consumer relationships outside Empower. The recent sale of Putnam has unlocked value, established a strong partnership with the combined Putnam Franklin organization, and provides an even sharper focus on Empower's next phase of growth. There's a lot of excitement about the future at Empower, and Ed will provide an update later in the presentation. Please turn to slide eight. In Canada, we made great progress against our strategic objectives in workplace and wealth this quarter. Group life and health premiums were up 22% year over year due to the addition of the public service health care plan, as well as strong organic growth in our existing book. These results reflect our leading position in the group life and health market in Canada. In group retirement, we saw solid growth over the last year due to net inflows and the impact of positive equity markets. We remain focused on strategies to enable capital-like growth, including continued improvement in plan member rollover asset retention. In individual wealth, the completed acquisitions of Investment Planning Council and Value Partners increased individual wealth assets to over $100 billion at the year end. These additions establish Canada Life as a leading non-bank wealth manager in Canada and position our business for stronger growth and performance going forward. In insurance and annuities, our CSM declined year over year, largely due to amortization and insurance experience. As we previously noted, we continue to approach non-participating insurance with a focus on customer value balanced with pricing discipline, and we do not consider CSM to be a key growth metric. Please turn to slide nine. Our capital and risk solutions business continues to play a complementary role and create value for the portfolio. Our reinsurance business provides diversification benefits and continues to be a source of steady, stable returns and cash generation. Earnings on short-term business increased 25% over the prior year, reflecting growth in the structured business. Please note that this business is accounted for on the PAA basis, which does not impact CSM. In addition, while the market for longevity reinsurance remains very competitive, we completed a new longevity reinsurance transaction agreement covering £1 billion of pension liabilities with an insurance company in the UK. Capital and Risk Solutions continues to see solid new business momentum and will maintain discipline as we leverage our strong capabilities to support existing client relationships and identify value-creating opportunities to grow in new markets. And with that, I'll now turn the call over to David Harney to provide an update on Europe. David?

Thank you, Paul. Please turn to slide 11. Our businesses in Europe maintained positive momentum in the quarter with solid top-line and bottom-line growth. Group insurance premiums, wealth and retirement assets and CSM had year-over-year growth in the mid-teens. This performance reflects strong market positions for our different product lines and the stable nature of financial necessities like group benefits, annuities and retirement savings. Group benefits and retirement savings also continue to be supported by strong employment and wage inflation in our three markets. In workplace, we saw strong organic growth again in group life and health in both the UK and Ireland. We are one of the leading providers of group risk benefits in the UK and the market leader in Ireland. Irish pension sales were also strong, where again we are the market leader. We achieved good growth in wealth, which is reflected in positive net inflows for the quarter and throughout the year. We expect this solid performance to be further strengthened as we continue to build out our wealth strategy in Ireland under the Unio brand and through our joint venture with Allied Irish Banks. Within insurance and risk solutions, we see continued strong individual annuity sales in the UK, supported by higher interest rates, and we have improved our competitive position in the bulk annuity market. These sales, in addition to a gain from reinsuring an existing block of UK annuities, helped drive CSM growth of 17% year over year. Please turn to slide 12, Europe actions to enhance returns. A broad product offering in the strongly growing Irish economy and targeted product offerings in the UK and Germany make our businesses in Europe well-placed for sustainable long-term growth. We have taken numerous actions during 2023, which will further strengthen our European businesses. In the fourth quarter, we took several deliberate actions, which we believe will position us for enhanced capital return and earnings growth. We completed the sale of a portfolio of Irish Life policies from our previous distribution agreement with Allied Irish Banks to AIB Life. This adds scale to the joint venture and accelerates its time to profitability. In the UK, we announced the closure of our onshore wealth business to new business, where we lacked a meaningful presence. We have taken cost actions across our markets to improve our cost profile, and we completed an external reinsurance placement of a block of annuity business in the UK, consistent with our focus on cash generation and improving capital returns. These actions followed earlier announcements in 2023, including The sale of our onshore UK individual protection business, where again, we did not have the scale to compete. The combination of our advisory businesses in Ireland and the launch of our new wealth brand, Unio. Unio is performing strongly and sales have increased 20% year over year. We also launched our joint venture AIB Life, successfully replacing our prior distribution agreement with Allied Irish Banks. AIB Life is also performing very well and has already reached the same level of sales as our prior distribution agreement. These actions, alongside the quarter four actions, are expected to enhance earnings in Europe over the medium term. I'll now turn the call over to Ed Murphy to discuss the impact results.