Great-West Lifeco Q3 2026 base earnings top CAD 1.3 billion

Great-West Lifeco reported record base earnings of more than CAD 1.3 billion for the third quarter of 2026, as growth in its U.S. retirement and wealth businesses and demand for reinsurance products offset weaker Canadian insurance experience.

On the earnings call, President and CEO David Harney said retirement and wealth operations now generate “more than half of the operating segments’ combined base earnings.” Base earnings per share rose 11% year over year, while base return on equity reached 19.4%, above the company’s medium-term objective of at least 19%, for a third consecutive quarter.

Harney said Great-West expects to “repurchase at least as many shares in 2027 as we do this year,” keeping shareholder returns at the center of next year’s capital plan.

What powered the record quarter?

Empower supplied the strongest lift. Its base earnings rose 15% in constant currency, supported by retirement and wealth growth. During the quarter, Empower completed its acquisition of Milliman’s retirement and benefits administration business, adding $134 billion in client assets and taking Empower Retirement’s customer count above 20 million.

• Retirement results included approximately $21 million after tax in one-time administrative service fees, offset by credit losses above the expected quarterly run rate, CFO Jon Nielsen said. Operating margins improved by 370 basis points from a year earlier.
• Empower Wealth base earnings rose 28% in constant currency, and its operating margin reached a record 42%. Net sales rose approximately 40% from the previous quarter.
• Nielsen expects double-digit base earnings growth at Empower into 2027.

Empower President and CEO Ed Murphy expects more than $20 billion in net plan sales in the first quarter of 2027, measured by contractual commitments. He also expects the business to add close to 950,000 participants organically in 2026, excluding Milliman.

Beyond 2026, Great-West expects pretax operating margins in the mid-30% range for Empower Retirement and the high-30% range for Empower Wealth. Murphy said technology, distribution and brand investment will moderate margins somewhat, while total brand spending rises roughly 20% in 2027.

Empower remains the main growth engine, but higher investment will temper the margin benefit.

Why did Canadian earnings retreat?

Canadian base earnings fell 6% year over year as growth in retirement and wealth was outweighed by lower disability experience gains compared with record levels in 2025. Group benefits sales more than doubled, while insurance and annuity sales increased 17%, Nielsen said.

Fabrice Morin, president and CEO of Great-West’s Canadian operations, said long-term disability results reflected both higher claims incidence and lower claims recovery. Third-quarter trends remained consistent with the second quarter, though incidence pressure increased and recovery pressure eased somewhat.

Great-West is strengthening early intervention, case management and return-to-work support. Pricing is also in its toolkit, but actions generally take 12 to 18 months to establish, negotiate and implement. The company expects broadly neutral Canadian insurance experience overall in 2027.

Morin projected Canadian wealth operating margins of 18% to 20%, with investments creating some pressure. He said recent Canadian retirement margins were relatively sustainable under normal market conditions, although they remain sensitive to market levels.

Canada remains a drag, and management expects disability performance to stabilize rather than rebound sharply.

Where else did earnings grow?

Capital and Risk Solutions base earnings rose 17% in the quarter. Strong demand for Capital Solutions drove a 38% increase in its run-rate insurance result, Nielsen said. Great-West expects mid-single-digit-plus growth as new business volume and insurance experience normalize.

Jeff Poulin, CEO of Reinsurance, said the pipeline remains healthy, but it contains more, smaller deals than last year. He noted increased competition as more capital enters reinsurance, while saying Great-West remains well positioned in Capital Solutions.

Europe delivered base earnings growth of 3% in the quarter and 6% in the first nine months of 2026. Nielsen said retail sales grew more than 50% across product lines, while bulk annuity sales moderated from the previous quarter.

Reinsurance and Europe supplied additional growth, though competition is rising.

What can shareholders expect in 2027?

Great-West repurchased approximately CAD 1.3 billion of common shares in the first nine months of 2026, including approximately CAD 340 million in the third quarter. Nielsen expects 2026 buybacks to remain similar to last year’s level, which he described as roughly CAD 1.6 billion.

Harney said planned buybacks and dividends would produce a total payout ratio above 75% in 2027. Nielsen said the buyback outlook does not anticipate a major acquisition, though smaller deals could be incremental. Under normal market conditions and without a significant acquisition, Great-West would have capacity beyond CAD 1.6 billion for repurchases.

• Quarter-end LICAT capital ratio: 127%.
• Holding-company cash: CAD 3.6 billion.
• Nearly CAD 800 million of that cash was earmarked for a fourth-quarter debt maturity.

The balance sheet can support substantial returns, while a major acquisition would change the plan.

How large is Great-West?

Great-West is a financial services holding company with operations in the United States, Canada and Europe under the Empower, Canada Life and Irish Life brands. It provides wealth, retirement, group benefits, insurance and risk solutions to approximately 40 million customer relationships.

Total client assets reached $3.7 trillion as of June 30, 2026. The company trades on the Toronto Stock Exchange under GWO and belongs to the Power Corporation group of companies.

Great-West enters 2027 with scale, capital and a U.S.-led growth engine.