8 February 2019 13:30
Great-West Lifeco has ended the fourth quarter of 2018, with net profit of 710 million dollars (M$). An increase of 81 % compared to the fourth quarter of 2017, when the net profit was$392 Million.
If one focuses solely on the canadian operations of the company, the conclusion differs. Net profit amounted to 310 Million during the fourth quarter of 2018, while it was $ 338 Million during the same quarter of fiscal 2017.
The holding company accounted for this decrease of 8 % by two factors. The first : to increase its strategic spending and the development of its business. The second : the impact of the lower equity markets in the fourth quarter of 2018. Great-West Lifeco states that the impact of these two factors was offset in part by strong underlying results.
2018 more beneficial than 2017
The year 2018 as a whole was more profitable than 2017 to Great-West. The net income for the year ended December 31, 2018 amounted to 2 961 billion ($G$), against 2 149 G$ for the year 2017. This is an increase of 38 %.
The net profit of 2018 takes account of the costs of restructuring of$ 56 Million related to the activities of the company in the United Kingdom. The net profit for 2017 takes into account net adjustments of 498 M$ related to the impact of the tax reform in u.s., a net charge of the sale of an investment in equity securities and costs of restructuring.
In Canada also, the figures for the whole of the past year are better than in 2017. The net income amounted to 1 275 G$ for the year ended December 31, 2018, compared with 1 074 G$ for the year 2017. The company explains this increase by the growth of its results in class. The company’s portfolio has also benefited from the contribution of the changes in actuarial basis related to the liabilities relating to insurance contracts.
Looking at acquisitions
Paul Mahon, president and chief executive officer of Great-West Lifeco, said he is “very satisfied” with the profit recorded by his company in 2018. “Our holdings in canadian, u.s. and european union have all recorded a growth. We started 2019 with a significant excess capital, which is added in the amount of$ 1.6 billion from the sale of our life insurance business and annuity business in the United States. We are therefore in a good position to actively seek acquisition opportunities in order to stimulate the growth and the long-term value. We also examine other measures of capital management that could mitigate the effects on the profit of the sale of our operations in the United States. “
Increase in premiums
For the fourth quarter of 2018, the total amount of premiums and deposits Great-West Lifeco amounted to 37.6 G$, an increase of 15 % compared to the fourth quarter 2017 ($32.6 billion). Between the full year of 2018 and 2017, there has been an increase of 13 %. Premiums and deposits of $ 139,3 G$ as at 31 December 2018, compared to 123.1 billion as at 31 December 2017.