Robust new business momentum continues at Canada Life Re with strong performance

11 Feb, 2025

Canada Life Reinsurance, a subsidiary of Great West Lifeco, experienced strong new sales in Q4, driven by favorable market conditions. The company’s contractual service margin (CSM) saw a 40% year-on-year increase, rising to CAD 2.436 billion from CAD 1.745 billion in Q4 2023, and up 7% from Q3 2024’s CSM of CAD 2.284 billion.

This growth was primarily influenced by actuarial assumption changes, new business, and currency movements, though partially offset by CSM recognized for services provided. Canada Life Re also posted Q4 2024 base earnings of CAD 211 million, an increase from CAD 200 million in Q3 2024 but lower than the CAD 232 million recorded in Q4 2023.

For the full year, base earnings rose to CAD 790 million from CAD 778 million in 2023. The year-over-year decline in Q4 earnings was attributed to the Global Minimum Tax and favorable property catastrophe claims in 2023 that did not recur. However, business growth, strong U.S. life claims experience, and higher earnings on surplus within Great West Lifeco’s Capital and Risk Solutions segment helped offset these factors.

CEO Jeff Poulin highlighted the company's strong diversification and exceptional performance, emphasizing a 16% increase in results without the impact of the Global Minimum Tax. He credited the company’s success to a strong team and a supportive parent company.

Great West Lifeco also provided insights into its reinsurance segment’s exposure to the Los Angeles wildfires, estimating a maximum possible loss of $100 million on property catastrophe retrocession contracts, though actual claims are not expected to reach that level.

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