Great-West Lifeco (TSE:GWO) 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.
Base earnings per share rose 11% from a year earlier, while base return on equity reached 19.4%, above the company’s medium-term objective of at least 19% for a third consecutive quarter. President and CEO David Harney said the combined retirement and wealth businesses now account for more than half of the operating segments’ combined base earnings.
The company also outlined plans for continued shareholder returns, with Harney saying Great-West expects to repurchase at least as many shares in 2027 as it does this year.
Empower growth and Milliman acquisition
Empower’s base earnings rose 15% in constant currency, supported by growth in retirement and wealth. The U.S. business completed its acquisition of Milliman’s retirement and benefits administration business during the quarter, adding $134 billion in client assets and bringing Empower Retirement’s customer count above 20 million.
Chief Financial Officer Jon Nielsen said retirement results included approximately $21 million after tax in one-time administrative service fees, offset by credit losses above the expected quarterly run rate. Retirement operating margins improved by 370 basis points from a year earlier.
Empower Wealth’s base earnings increased 28% in constant currency, and its operating margin reached a record 42%. Net sales rose approximately 40% from the previous quarter. Nielsen said Great-West expects double-digit base earnings growth at Empower into 2027.
Empower President and CEO Ed Murphy said the business expects more than $20 billion in net plan sales, measured by contractual commitments, in the first quarter of 2027. He also expects it 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 investment in technology, distribution and the brand would contribute to some moderation in margins, with total brand spending expected to rise roughly 20% in 2027.
Canadian insurance experience moderates
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 were 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. Morin said pricing is also part of its toolkit, but noted that pricing actions generally take 12 to 18 months to be established, negotiated and implemented. The company expects Canadian insurance experience to be broadly neutral overall in 2027.
Morin also 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 are sensitive to market levels.
Reinsurance demand and capital returns
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. The company expects mid-single-digit-plus growth going forward as new business volume and insurance experience normalize.
Jeff Poulin, CEO of Reinsurance, said the pipeline remains healthy but includes more, smaller deals compared with last year. He also noted increased competition as more capital enters reinsurance, while saying Great-West remains well positioned in Capital Solutions.
In Europe, base earnings rose 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.
Great-West repurchased approximately CAD 1.3 billion of common shares in the first nine months of 2026, including approximately $340 million in the third quarter. Nielsen said the company expects 2026 buybacks to be 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, the company would have capacity beyond CAD 1.6 billion in repurchases, he said.
Great-West ended the quarter with a LICAT capital ratio of 127% and CAD 3.6 billion in holding-company cash. Nearly CAD 800 million of that cash was earmarked for a fourth-quarter debt maturity.
About Great-West Lifeco (TSE:GWO)
Great West is a financial services holding company focused on building stronger, more financially secure futures. We operate in the United States, Canada and Europe under the brands Empower, Canada Life and Irish Life. Together we provide wealth, retirement, group benefits and insurance and risk solutions to our approximately 40 million customer relationships. As of June 30, 2026, Great West’s total client assets were $3.7 trillion. Great West trades on the Toronto Stock Exchange (TSX) under the ticker symbol GWO and is a member of the Power Corporation group of companies.
