Robust new business momentum continues at Canada Life Re with strong 2024 performance

Canada Life Reinsurance, part of Great West Lifeco, had a strong fourth quarter of new sales on the back of strong market conditions, as the company’s contractual service margin (CSM) grew 40% year-on-year.

When compared with Q4 2023, Canada Life Re’s CSM increased to CAD 2.436 billion from CAD 1.745 billion, and has increased almost 7% from Q3 2024’s CSM of CAD 2.284 billion.

The reinsurer attributes this year-on-year growth primarily to the impact of actuarial assumption changes, new business and currency movement, partially offset by CSM recognized for services provided.

In terms of the base result, Canada Life Re generated earnings of CAD 211 million for Q4 2024, up on the CAD 200 million posted for Q3 2024, but down on the CAD 232 million generated in Q4 2023.

For the full year 2024, the reinsurer’s base earnings increased to CAD 790 million from CAD 778 million in 2023.

The reason for the dip in base earnings from Q4 2023 to Q4 2024 is the impact of the Global Minimum Tax and favourable property catastrophe claims experience in 2023, which the firm notes did not recur this year.

Together, these impacts more than offset business growth, favourable claims experience in the U.S. life business, and higher earnings on surplus across Great West Lifeco’s Capital and Risk Solutions segment, which is comprised of the reinsurance, and legacy international business.

“Very strong results from every division within our group! These results show that our company is strong and well diversified. From Canada Life Re’s standpoint, our 2024 results are 16% above last year without the effect of Global Minimum Tax,” said Jeff Poulin, CEO Canada Life Re. “We had a strong fourth quarter of new sales and look forward to working with our partners to continue to build on our existing relationships. I am lucky to have the support of a fantastic team and a very strong parent company.”

Great West Lifeco has also provided an update on the reinsurance segment’s exposure to the recent Los Angeles wildfires, revealing that it estimates the maximum possible loss on property catastrophe retrocession contracts at $100 million, although it does not expect claims to reach this maximum loss level.

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