Winnipeg-based Great-West Lifeco Inc. is planning to pursue “vigorous” growth in Canada, the U.S. and Europe, president and CEO Allen Loney told investors on Thursday.
At the company’s investor day in Toronto, Loney said Great-West is maintaining a strong capital position to support future expansion. Growth in Canada is likely to be organic in nature, whereas he expects that acquisition opportunities could arise in the U.S. or Europe.
“We are interested in acquisitions,” he said.
Paul Mahon, president and chief operating officer of Great-West in Canada, noted that the company has been gaining market share in Canada: “We want to grow faster than the market.”
The company has successfully weathered the market turbulence in recent months, Loney said, pointing out that Great-West has only faced modest charges related to segregated fund guarantees and credit impairment at a time when the industry is being hit with hefty charges.
Although Great-West has exposure to credit and stock market risk, its conservative approach has helped it mitigate some of these risks, Loney said. “We work hard to control those risks in a disciplined fashion.”
On the topic of products, Great-West executives said the company was considering offering seg fund products with guaranteed minimum withdrawal benefits. The firm has been tracking the product closely, with plans to enter the market at a point when it would be profitable and sustainable for the company, Mahon said.
“We’re now in a position where we believe market entry is very viable for us,” he said.
GMWB products in the U.S. have been evolving rapidly as many product manufacturers redesign their existing products, Mahon pointed out. As the population ages and new types of products emerge, new opportunities could arise for Great-West to enter the market, he added.
“We’re going to see a lot of movement in these products,” he said. “This will be the first of many products.”
Mahon expects a new version of GMWB products to emerge in the next year. But he warned that such new products will not necessarily overtake the role of traditional retirement savings products in financial planning. For example, he believes that tailored annuities will remain an important product among Canadians saving for retirement.
The emergence of new retirement savings products will heighten the role that financial advisors have to play in helping to determine the most appropriate product for each client, Mahon said.
Great-West to focus on growth opportunities
Firm is also looking to enter the GMWB market with a new product at a time when it would be most profitable and sustainable
- By: Megan Harman
- June 4, 2009 June 4, 2009
- 13:35