By Tara Deschamps
THE CANADIAN PRESS
Great-West Lifeco Inc. nearly doubled its second-quarter earnings from last year as it benefited from investments in digital technology and a market rebound from COVID-19.
The insurance and wealth management company reported its net earnings attributable to common shareholders reached $863 million or 93 cents per share in the three months ended June 30.
That compared with $459 million or 49 cents per share for the same quarter last year.
Its base earnings, which exclude certain items, amounted to $706 million or 76 cents per share, up from $627 million or 67 cents per share a year ago.
Great-West beat analyst estimates of 72 cents per share of net earnings and 60 cents per share of base earnings.
Chief executive and president Paul Mahon said the Winnipeg-based company was quite fortunate in the quarter, despite grappling with COVID-19 like every other business.
“To a large extent, we saw a good recovery in equity markets,” he said.
“What we found is that our business model is very resilient…There is obviously going to be downsides related to economic impacts but we always believe they will be moderated because of our risk sense.”
Great-West which operates the Canada Life brand, among other things saw lower health and dental claims and reductions to premiums while medical offices were closed during the early stages of the pandemic in Canada.
The closures were coupled with an increase in disability claims, lower levels of disability claim terminations and strong sales of life insurance sales.
The public’s gravitation towards virtual offerings, which insurance companies have been ramping up in recent years, also helped, Mahon said.
His remarks came a day after Great-West announced it is selling its Canadian subsidiary GLC Asset Management Group Ltd. for $175 million in cash to Mackenzie Financial Corp., an affiliated company.
Mackenzie parent IGM Financial Inc. and Great-West are both majority-owned by Montreal-based Power Corp. of Canada.
As part of the deal with Mackenzie, The Canada Life Assurance Company will acquire fund management contracts relating to the private label Quadrus Group of Funds and other Canada Life branded investment funds from Mackenzie for $30 million in cash.
That will result in Lifeco receiving net cash of $145 million if the deal receives regulatory approval and closes as expected in the fourth quarter.
“We believe successful wealth managers need to control their product shelf and customer solutions, but they also need access to asset managers with consistent, high-performance skill mandates and product innovation and breadth,” said Mahon.
“By combining GLC with Mackenzie, Canada Life will have access to a product manager with these strengths.”
News of the deal and Great-West’s earnings pushed the company’s stock to close at $24.96, up $1.06 or 4.4 per cent. Earlier, Lifeco shares hit an intraday high of $25.44
Looking ahead, Great-West is seeing encouraging signs.
Claims levels in Canada were already approaching pre-COVID levels in June.
“We are starting to see reasonable recoveries in sales activities in markets where some of the limitations of physical distancing have been lifted…but we can’t really estimate what will happen in the external market,” Mahon said.
“You don’t know what will happen to the economy going forward.”
By Tara Deschamps
THE CANADIAN PRESS
TORONTO _ Manulife Financial Inc.’s chief executive says COVID-19 had a “significant” impact on the company’s second-quarter performance, but he’s confident it will bounce back.
Roy Gori told analysts Thursday that the pandemic negatively impacted sales and investments generated lower-than-expected returns as several countries the Toronto-based insurer operates in shut down to stop the spread of the novel coronavirus.
“The coronavirus continues to disrupt economies and capital markets worldwide,” Gori said in pre-taped remarks that opened the company’s quarterly call.
“Our operating conditions during the quarter were understandably effected.”
His remarks come a day after Manulife said COVID-19 hampered the company’s second quarter to the point where its net income dropped to half of what it was during the same period last year.
The insurer said its net income attributable to shareholders for the period ended June 30 was $727 million, just under half of the $1.47 billion it earned in the second quarter of 2019.
Manulife’s diluted earnings per common share reached 35 cents for the period, a fall from 73 cents a year ago but more than the eight cents per share analysts had expected.
The quarter, however, had some upsides.
Gori said he was pleased with Manulife’s efforts to launch a chatbot, offer e-applications for life insurance and begin non-face-to-face processes for sales in Asia amid the pandemic.
He also shared that the company had extended premium grace periods on several insurance products, launched a credit card deferral program and mortgage payment deferrals of up to six months.
How the pandemic will continue to impact Manulife and the economy, however, is a question mark, he said.
“It is still way too early to declare what the long-term consequences of COVID are and there are still way too many unknowns,” he said.
“I expect there is going to be a lot of uncertainty and volatility until we see an at-scale deployment of a vaccine and even then there are questions around how effective that vaccine will be.”
Manulife’s shares gains 84 cents or nearly 4.5 per cent at $19.67 in morning trading on the Toronto Stock Exchange.
This report by The Canadian Press was first published Aug. 6, 2020.
Companies in this story: (TSX:MFC)
MONTREAL _ Dialogue Technologies Inc. says it has formed a partnership with Sun Life Financial Inc. that will see the insurance provider become a minority owner of the telemedicine business.
Montreal-based Dialogue says the commercial partnership involves a $32.7-million equity investment and gives Sun Life rights to acquire additional equity later.
The announcement is part of a $43-million round of financing from Dialogue’s existing backers Caisse de depot et placement du Quebec, Portag3 Ventures, White Star Capital, HV Holtzbrinck Ventures, First Ascent Ventures and Walter Ventures.
Dialogue provides virtual access to medical care in Canada and connects users directly to health-care professionals across the globe at any time of day.
The company says the COVID-19 pandemic and physical distancing measures have triggered a sharp increase in usage of its virtual care services.
The deal comes after Sun Life rolled out access in April to Lumino Health Virtual Care, a platform powered by Dialogue that allows users to connect with medical professionals digitally.
LEVIS, Que. _ Desjardins Group says it has reached a $60.5-million agreement with a U.K.-based hybrid real estate agency to acquire its Canadian holding company and its two brands.
The financial group says in a statement it will acquire the brands Purplebricks Canada and DuProprio from Purplebricks Group plc.’s holding company 9059-2114 Quebec Inc.
Purplebricks Canada provides fixed-fee real estate brokerage services for home sellers in three provinces, while DuProprio provides real estate services without an agent in Quebec.
The two companies have more than 500 employees in Quebec, Ontario, Manitoba and Alberta.
Desjardins, which is one of the largest mortgage and insurance providers in Quebec, says both will continue to be run by the existing teams.
It says the deal takes effect on Wednesday.
QUEBEC CITY, July 3, 2020 /CNW Telbec/ – La Capitale and SSQ Insurance are pleased to announce that their merger of equals is now official, creating the largest mutual insurance company in Canada with over 3.5 million members and clients.
The name of the new company will be announced in the fall and integration will take place gradually. For the time being, nothing is changing for members, clients, and business partners. All agreements are being maintained.
The company is built on a solid foundation: 4,700 committed employees, well-established mutualist values, sound finances, and diversified expertise. Assets under management total more than $20 billion, and premiums tally at $5 billion. Its head office will remain in Quebec City.
The new company is now the 1st group insurer in Quebec and 4th in Canada, as well as the 4th largest personal insurer in Quebec and the 6th largest in Canada. In general insurance, it ranks 3rd in Quebec and 13th in Canada. It also holds an enviable position in savings, ranking 7th in Canada in segregated funds.
Experienced, well-balanced management team
The new company is also announcing its management team. Jean-François Chalifoux, former CEO of SSQ Insurance, becomes President and CEO of the new company, whereas Jean St-Gelais, former Chairman of the Board and Chief Executive Officer of La Capitale, has been named Chairman of the Board of Directors. He will also lead the Integration Steering Committee.
The following people have joined the management team:
- Pierre Marc Bellavance is appointed Executive Vice President and Leader, Legal Affairs, Compliance and Corporate Secretary. He served as Vice President, Legal Affairs and Corporate Secretary at La Capitale.
- Patrick Cyr is appointed Executive Vice President and Leader, Integration. He was Senior Vice President, Finance at SSQ Insurance.
- Catherine Desgagnés-Belzil is appointed Executive Vice President and Leader, Business Performance and Information Technology. She was previously Associate Secretary of the Treasury Board and Chief Information Officer for the Quebec government.
- Christian Fournier is appointed Executive Vice President and Leader, Property and Casualty Insurance. He was Senior Executive Vice President and Chief Operating Officer at La Capitale General Insurance.
- Mélissa Gilbert is appointed Executive Vice President and Leader, Finance. She was Executive Vice President, Finance, Corporate Actuarial and Risk Management at La Capitale.
- Stéphane Morency is appointed Executive Vice President and Leader, Strategy, Customer Experience and Marketing. He was previously Senior Vice President, Strategy, Marketing and Client Experience within a major insurance and financial services group.
- Lara Nourcy is appointed Executive Vice President and Leader, Individual Insurance and Financial Services. She was Vice President, Customers Experience, Partners and Operations Management at La Capitale.
- Martin Robert is appointed Executive Vice President and Leader, Talent, Culture and Communication. He was previously Vice President, Talent, Culture and Communication at SSQ Insurance.
- Éric Trudel has been appointed Executive Vice President and Leader, Group Insurance. He previously served as Senior Vice President, Strategy and Product Management at SSQ Insurance.
The merger of equals between La Capitale and SSQ Insurance was presented to members last January and has since gone through the various regulatory stages.
“We are very proud to make this merger of equals official today. Our new company has given itself the means to grow and make its mark in a fast-changing industry. We are now a major player across the country. We’ve opened an exciting new chapter for our 4,700 employees, who now make up the largest mutual insurance company in Canada.”
— Jean-François Chalifoux, President and CEO
La Capitale/SSQ Insurance
SOURCE La Capitale Insurance and Financial Services
WINNIPEG _ A subsidiary of Great-West Lifeco Inc. has signed a deal to buy U.S. investment manager Personal Capital in a deal worth at least US$825 million.
Under the agreement, Empower Retirement will pay US$825 million, plus up to an additional US$175 million subject to the achievement of target growth objectives.
Great-West says Personal Capital is a hybrid wealth manager that combines a digital experience with personalized advice delivered by people.
The company says the deal will combine Empower retirement plan services and financial tools with Personal Capital’s digitally oriented personal wealth management platform.
IGM Financial Inc., a sister company to Great-West, holds a stake in Personal Capital and says it expects US$176.6 million in proceeds from the deal, plus up to an additional $24.6 million in possible additional payments.
The transaction is expected to close in the second half of 2020, subject to required regulatory approvals.