Great-West Lifeco, Thank You to All Frontline Health Care and Essential Workers

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Great-West Lifeco, Thank You to All Frontline Health Care and Essential Workers On behalf of Great-West Lifeco, thank you to all frontline health care and essential workers. Your commitment and dedication is an inspiration to us all. Great-West Lifeco Inc. 2020 Annual Report Lifeco Inc. Great-West 2020 100 Osborne Street North Winnipeg Manitoba Canada R3C 1V3 greatwestlifeco.com A member of the Power Corporation Group of Companies® Annual Report E987(20LIFECO)-3/21 OUR BRANDS CORPORATE PROFILE Great-West Lifeco is an international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses. We operate in Canada, the United States and Europe under the brands Canada Life, Empower Retirement, Putnam Investments and Irish Life. At the end of 2020, our companies had more than 24,500 employees, 205,000 advisor relationships, and thousands of distribution partners – all serving our more than 30 million customer relationships across these regions. Great-West Lifeco and its companies have approximately $2.0 trillion in consolidated assets under administration as at December 31, 2020, and are members of the Power Corporation group of companies. Great-West Lifeco trades on the Toronto Stock Exchange (TSX) under the ticker symbol GWO. To learn more, visit greatwestlifeco.com. Great-West Lifeco Inc. 2020 Annual Report 201 OUR BUSINESSES Great-West Lifeco operates in Canada, the United CONTENTS States and Europe through Canada Life, Empower Financial Highlights 3 Retirement, Putnam Investments and Irish Life. Directors’ Report to Shareholders 4 Encouraging Sustainability 7 CANADA EUROPE Benefiting from Stable Canada Life is a leading European subsidiaries of and Effective Governance 8 insurer with interests in life Canada Life and Irish Life Advancing Focus on insurance, health insurance, provide insurance and wealth Diversity and Inclusion 9 retirement savings, and management products Supporting our investment management. including pensions, home Communities 9 We proudly serve nearly one finance, payout annuities, Elevating the Workplace in three Canadians from coast investments and group Benefits Experience 10 to coast to coast. Canada Life and indivdual insurance in Equipping Customers serves its customers through the U.K.; investments, and with Advice and over 23,000 advisors, and group insurance in the U.K.; Wealth Solutions 12 serves group plan members investments, and group and Providing Investment through approximately 27,000 individual insurance in the Isle and Asset employers across the country. of Man; pensions, critical illness, Management Expertise 14 disability and life insurance Offering Capital in Germany; and life and and Risk Solutions 16 health insurance, pension and Management's U.S. investment products in Ireland. Discussion and Analysis 17 Empower Retirement Financial Reporting serves all segments of the Responsibility 107 U.S. employer-sponsored Consolidated CAPITAL AND RISK retirement plan market and Financial Statements 108 SOLUTIONS offers individual retirement Independent accounts. Putnam is a U.S.- The Capital and Risk Solutions Auditor’s Report 191 business unit provides based global asset manager Sources of Earnings 195 with a range of investment reinsurance covering mortality, Five-Year Summary 197 management strategies longevity, health and lapse Directors and including fixed income, risks for insurers, reinsurers Senior Officers 198 equity, environmental, and pension funds and Shareholder social and governance (ESG), operates primarily in the Information 199 and global asset allocation U.S., Barbados, Bermuda, Our Brands 201 and alternatives. The firm’s and Ireland. Its reinsurance business is conducted through The financial information in this affiliate, PanAgora provides report is presented in millions of institutional investment branches and subsidiaries of Canadian dollars for the period ended December 31, 2020, unless solutions including alternatives, Canada Life. otherwise indicated. risk premia and active Readers are referred to the Cautionary Notes regarding strategies, spanning all major forward-looking information asset classes and risk ranges. and non-IFRS financial measures on page 18. Great-West Lifeco Inc. 2020 Annual Report 1 Year at a glance 30M+ $39B+ Customer Benefits paid relationships to customers $17.5M+ 205,000+ Contributed Advisor relationships to communities supporting our customers 24,500+ 170+ Employees supporting Years of delivering on our customers our promises $2.943B $2.669B Net earnings Base earnings* greatwestlifeco.com Visit our website to get a digital copy of our annual report and access more information, such as our current credit ratings. *Base earnings is a non-IFRS measure. FINANCIAL HIGHLIGHTS SOLID PERFORMANCE DIVIDENDS PAID ACROSS OUR BUSINESSES We have a clear purpose to meet the diverse Great-West Lifeco’s solid financial performance and changing needs of our customers and is evidenced by its strong capital position and advisors. This purpose, combined with strong financial flexibility, backed by strategies to drive risk and expense discipline, is key to delivering growth through innovation and disciplined long-term shareholder value. capital deployment. Earnings Per Annual Dividend Yield 5-Year Compound Common Share of Common Shares Annual Growth Rate $3.17 6.4% 6.08% 2020 2020 $2.67 $2.17 $3.00 $2.49 $1.384 $1.468 $1.556 2016 2017 2018 2019 2016 2017 2018 $1.652 $1.752 Return on Common Shareholders' Equity 14.1% 2019 2020 Total Assets Under Administration (in Trillions) 2020 13.8% 10.9% 14.0% 11.7% $1.976T 2016 2017 2018 2019 2020 $1.248 $1.350 $1.399 $1.630 DIVERSIFIED EARNINGS 2016 2017 2018 2019 BY GEOGRAPHY* Premiums and Deposits (in Billions) Canada Europe $171.3B Capital and 2020 Risk Solutions $117.5 $123.1 $139.3 $150.6 United States 2016 2017 2018 2019 45% 25% 20% 10% Canada Europe Capital United and Risk States Solutions *Reflects 2020 base earnings – a non-IFRS measure. Great-West Lifeco Inc. 2020 Annual Report 3 DIRECTORS’ REPORT TO SHAREHOLDERS Jeffrey Orr Paul Mahon Chair of President and the Board Chief Executive Officer At the heart of Great-West Lifeco’s trusted market leadership are strong brands, a diversified portfolio, and strategies to meet customers’ evolving needs. Significant investments over home with a focus on seamless hardship for many, it also recent years have positioned customer and advisor service created opportunities to our businesses for growth and support. Further, we quickly innovate and position and resiliency in support responded to those in need and ourselves for tomorrow. of increasing shareholder ensured our actions aligned value. Despite the challenges with government policies LEVERAGING EXISTING STRENGTHS stemming from the COVID-19 to help support individuals, pandemic, 2020 was a year businesses, and economies. In Canada, we’ve seen a of significant progress as we marked increase in digital While the past year created advanced our strategies. adoption as a majority of volatile market conditions, As we look to the future, customers and advisors our diversified businesses we remain confident in our used tools like our remained stable and resilient, ability to grow and deliver SimpleProtect online life supported by financial for all our stakeholders. insurance application. strength and discipline, and Investment in technology underpinned by trusted RESPONSE TO THE COVID-19 has been key to delivering PANDEMIC customer relationships built a secure, seamless advisor over 170 years. We pivoted Our top priority during the and customer experience. to remote operations thanks pandemic has been the health to important technology At Empower, our U.S. and safety of our employees, investments, supported by retirement market leadership advisors, customers, and robust risk and expense position was recognized by communities. To achieve this, management practices. financial advisors, as their top we quickly transitioned to choice of recordkeeper across 98% of our more than 24,500 While the COVID-19 pandemic five of six categories in the employees working from has created significant 4 Great-West Lifeco Inc. 2020 Annual Report Financial Advisor IQ Service as a choice employer, our reach to over 12 million Awards survey. strengthening our talent Americans and is expected to attraction and retention, as be highly accretive to Lifeco’s At Putnam Investments, reflected by our best ever earnings. Empower also our unwavering focus on employee engagement scores. acquired Personal Capital, generating strong, risk- a hybrid wealth manager adjusted investment returns CREATING VALUE combining a vanguard digital through active management THROUGH MERGERS experience with personalized led to strong performance AND ACQUISITIONS advice from human advisors. relative to peers, as evidenced Over the past year, we’ve Together, these transactions by the firm’s 26 four- or deployed capital through accelerate Empower’s strategy five-star rated funds by targeted mergers and to deliver digital retail advice Morningstar at the end of acquisitions to support both and strengthen our number December 2020. near- and long-term growth two position in the U.S. In Ireland, the One Irish Life and value creation. retirement market. program delivers an integrated In Canada, we’ve elevated our customer experience across SUPPORTING wealth management strategies products, while our U.K. SUSTAINABILITY through the combination of AND DIVERSITY IN transformation program GLC Asset Management with OUR COMMUNITIES continues to build out a Mackenzie
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