What is Brief History of Great-West Lifeco Company?

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What is the history of Great-West Lifeco?

Great-West Lifeco Inc. is a major international financial services holding company with origins in Western Canada. Its history is marked by significant consolidation and expansion.

Founded in Winnipeg, Manitoba, in 1891 as The Great-West Life Assurance Company, the company aimed to provide a western-based insurance alternative and support local development.

A key development was the amalgamation of The Great-West Life Assurance Company, London Life Insurance Company, and The Canada Life Assurance Company under the Canada Life brand on January 1, 2020. This strategic move unified operations for an entity that now serves over 40 million customers across Canada, the United States, and Europe through subsidiaries like Canada Life and Empower. As of March 31, 2025, the company managed client assets exceeding $3 trillion, showcasing its substantial presence in insurance, retirement, and investment services. For a deeper understanding of its operational environment, consider a Great-West Lifeco PESTEL Analysis.

The Great-West Life Assurance Company was formally incorporated on August 28, 1891, in Winnipeg, Manitoba. Founded by Jeffry Hall Brock, the company aimed to address the lack of local capital in Western Canada and the dominance of eastern and foreign insurance firms.

The Founding of Great-West Life Assurance Company

Jeffry Hall Brock established the Great-West Life Assurance Company in 1891 with a vision to foster Western Canadian development. He aimed to create a locally-based insurance provider that would retain capital within the region.

• Incorporated: August 28, 1891, in Winnipeg, Manitoba.
• Founder: Jeffry Hall Brock.
• Initial Goal: To provide life insurance and support local economic growth.
• Early Success: Exceeded the ambitious first-year sales target of $1 million, achieving over $2 million in sales.
• First Death Claim Paid: 1893.

Brock's vision was to establish a western-based insurance provider that could offer competitive services and retain capital within the region to support local farmers and businesses. The company's original business model centered on providing life insurance policies. An interesting anecdote from its inception highlights Brock's ambitious prediction of selling $1 million in insurance in its first year, a goal experts deemed impossible. However, Great-West Life surpassed this, achieving over $2 million in sales by the end of that inaugural year. Its first death claim was paid out in 1893. The name 'Great-West' itself reportedly originated from a typesetter's error, a small detail in its grand history. The cultural and economic context of the time, characterized by rapid expansion and settlement in Western Canada, created a fertile ground for a localized financial institution that could meet the unique needs of the burgeoning population and economy. This period marked the beginning of the Brief History of Great-West Lifeco.

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The early years of Great-West Life Assurance Company history were marked by impressive growth, quickly becoming a leader in Canadian paid-for business by 1907. This period also saw the company's initial steps toward international expansion, laying the foundation for its future global presence.

Early Expansion and Product Diversification

Great-West Life began its geographical expansion into the United States in 1906, starting with North Dakota. By the early 1940s, operations had extended to multiple states including Michigan, Minnesota, Indiana, Missouri, Ohio, Kansas, California, and Pennsylvania. In 1942, the company was the first Canadian insurer to enter the accident and health insurance market, showcasing its evolving product offerings.

Strategic Acquisitions and Restructuring

A significant turning point in Lifeco history occurred in 1969 when Power Corporation of Canada acquired a controlling interest. This led to the separation of Canadian and U.S. businesses in 1979, with the U.S. headquarters established in Denver. Further evolution saw the creation of Power Financial Corporation in 1984. Key acquisitions, such as London Life Insurance Company in 1997 and The Canada Life Assurance Company in 2003, significantly expanded the company's reach and capabilities.

Growth in the U.S. Retirement Market

In 2014, Great-West Lifeco launched Empower, consolidating its retirement businesses. This strategic move quickly established Empower as the nation's second-largest retirement services provider, highlighting the company's strong position in the U.S. retirement sector. This development is a key milestone in the Mission, Vision & Core Values of Great-West Lifeco.

Continued Expansion and Market Presence

By 1979, Great-West Life was operating in 45 U.S. states, demonstrating substantial growth in its American operations. The company's strategic acquisitions and restructuring efforts have been instrumental in its evolution, solidifying its position as a major financial services provider.

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Great-West Lifeco's history is marked by significant milestones and innovations, alongside periods of challenge. The company was an early adopter of new sales practices and technology, demonstrating a forward-thinking approach to business. This evolution reflects a consistent effort to adapt and grow within the financial services industry.

Innovations have been a hallmark of the company's journey, from pioneering levelized commissions for agents to embracing digital transformation. Empower, a subsidiary, has introduced initiatives like a zero-fee S&P 500 Index Fund and private market investments. The company is also integrating robotic process automation and piloting conversational AI platforms to enhance customer service and data utilization.

Levelized Commissions

Great-West Life was the first insurance company in North America to adopt levelized commissions for agents, encouraging the sale of new products.

Technological Pioneer

The company installed the first computer in Western Canada in 1958, showcasing early technological adoption.

Variable Annuity Sales

In 1968, it became the first Canadian company authorized to sell a variable annuity in the United States.

Zero-Fee Index Fund

Empower introduced a zero-fee S&P 500 Index Fund to enhance its market position.

Robotic Process Automation

The company is embracing digital transformation by integrating robotic process automation.

Conversational AI

Piloting conversational AI platforms aims to improve customer service and data utilization.

The company has navigated significant challenges, including the Great Depression and accusations of improper trading by a subsidiary in the mid-2000s. More recently, in the first quarter of 2025, net earnings from continuing operations decreased by 17% due to unfavorable market conditions and a claims provision. These events have prompted strategic restructuring and a focus on capital-efficient businesses.

Economic Downturns

The Great Depression of the 1930s impacted business, though assets gradually increased during that period.

Trading Irregularities

A subsidiary faced charges for improper mutual fund share trading, leading to civil penalties and a renewed focus on ethical practices.

Market Volatility Impact

In Q1 2025, net earnings saw a 17% decrease due to lower returns on real estate and interest rates, alongside a claims provision for wildfires.

Strategic Restructuring

The amalgamation of Canadian brands under Canada Life in 2020 was a key strategic response to evolving market dynamics.

Business Model Pivot

A pivot towards high-margin Retirement and Wealth businesses contributed to a 5% increase in base earnings in Q1 2025, demonstrating adaptability.

Commitment to Prudence

These challenges have reinforced the company's commitment to diversified operations and prudent financial management, crucial for adapting to industry trends.

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Great-West Lifeco's extensive history is marked by key events that shaped its trajectory, from its founding in 1847 as Canada Life Assurance Company to its current position as a diversified financial services organization.

Strategic Growth Focus

Great-West Lifeco is strategically focused on driving growth in its capital-efficient, high-margin Retirement and Wealth businesses.

The company aims for medium-term financial objectives of 8% to 10% earnings per share (EPS) growth and a return on equity (ROE) of over 19%.

Empower as a Key Driver

Empower is expected to remain a key growth driver for the organization.

Continued investment in digital solutions and new product offerings, such as the zero-fee S&P 500 Index Fund, will support this growth.

Analyst and Investor Outlook

Analysts currently view Great-West Lifeco as a 'Hold' for 2025.

However, it is considered a 'Buy and Hold' for long-term investors due to its stable financials and attractive dividend yield of approximately 4.8%.

Founding Vision and Purpose

The company's commitment to building stronger, more inclusive, and financially secure futures aligns with its founding vision.

This purpose, articulated in its 2024 annual report, ties directly back to its inception of providing financial security and supporting local development. Understanding the Target Market of Great-West Lifeco is crucial to appreciating its long-term strategy.

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