Great-West Lifeco Boston Consulting Group Matrix

Empower is strategically expanding its offerings, identifying new high-growth financial solutions as stars within Great-West Lifeco's BCG Matrix. This proactive approach is evident in their recent ventures.

The company launched Empower Consumer-Directed Health, a new business unit focused on Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). This move targets the burgeoning market for consumer-driven healthcare financial tools. Additionally, Empower acquired Plan Management Corporation, bolstering its capabilities in equity compensation administration. These moves underscore a commitment to capturing early market share in evolving financial well-being sectors.

Empower, Great-West Lifeco's U.S. retirement powerhouse, is a clear star in the BCG matrix, demonstrating exceptional growth and a commanding market presence. Its expansion is further bolstered by strategic acquisitions and the introduction of new, high-growth financial solutions.

The company's commitment to digital transformation and AI integration is also a significant driver, enhancing customer experience and operational efficiency. This forward-looking approach positions Empower for continued success and market leadership.

Empower's strategic moves, such as the launch of Empower Consumer-Directed Health and the acquisition of Plan Management Corporation, highlight its focus on capturing market share in evolving financial well-being sectors.

These initiatives, coupled with strong performance metrics, solidify Empower's status as a star, contributing significantly to Great-West Lifeco's overall growth trajectory.

Putnam Investments, a key subsidiary of Great-West Lifeco, operates several mutual funds that function as the company's cash cows within the BCG matrix. As of December 31, 2024, a remarkable 86% of Putnam's mutual fund assets held a 4 or 5-star rating from Morningstar, underscoring their consistent high performance and investor appeal.

These well-established, top-tier funds attract and retain substantial assets under management, reliably generating steady fee income. In the mature asset management sector, this consistent revenue stream makes them a dependable source of cash for Great-West Lifeco.

Great-West Lifeco's established life and health insurance portfolios, including those managed by Canada Life and Irish Life, represent significant cash cows. These mature segments benefit from substantial market share and consistent premium income, providing a stable earnings base.

The company's commitment to shareholder returns, evidenced by its dividend policy and a planned $500 million share buyback in 2025, highlights the strong and predictable cash flow generated by these mature businesses. This financial discipline allows for capital to be returned to investors while funding strategic growth elsewhere.

Putnam Investments' high-rated mutual funds also act as cash cows, consistently generating fee income from substantial assets under management. In 2024, 86% of Putnam's mutual fund assets held a 4 or 5-star Morningstar rating, showcasing their enduring appeal and reliable revenue contribution.

The U.K. bulk annuity business is another key cash cow, with strong new business volumes in Q1 2025 boosting earnings and recognized contractual service margin. Its established market position ensures a steady and substantial cash flow, reinforcing its role as a dependable financial contributor.

Certain segments within Great-West Lifeco's portfolio might be classified as dogs if they've faced prolonged unfavorable market conditions. For instance, if real estate holdings within specific investment funds experienced a significant downturn in 2024, coupled with a low market share in those particular real estate sub-sectors, these could be considered dogs. This situation ties up capital with minimal or negative returns.

Segments classified as dogs within Great-West Lifeco's BCG matrix represent business units with low market share in slow-growing or declining industries. These often include legacy products or niche offerings that require significant resources for maintenance but yield minimal returns. The company's strategic exit from U.S. traditional life mortality reinsurance exemplifies this classification, indicating a move to divest or manage these underperforming assets.

In 2024, the insurance sector continued its pivot towards digital, personalized solutions, further diminishing the appeal and profitability of older, less adaptable product lines. These dog segments, like certain guaranteed-rate life insurance policies, face shrinking demand and struggle to compete, tying up capital that could be better deployed in growth areas.

These underperforming units, characterized by declining market share and persistent high expense ratios, often consume resources without contributing significantly to overall profitability. For instance, a business line with an expense ratio exceeding 65% might be flagged as a dog, prompting strategic decisions for divestiture or consolidation to free up capital for more promising ventures.

The identification of these dogs allows Great-West Lifeco to strategically reallocate capital and management focus. By exiting or winding down these low-growth, low-return segments, the company can invest in its star performers and question marks, ultimately enhancing overall portfolio performance and long-term shareholder value.

Great-West Lifeco is actively piloting new digital solutions and artificial intelligence, such as conversational AI, to modernize its operations. These initiatives represent significant investments in areas with high future growth potential, aiming to enhance efficiency and create competitive advantages.

While these advanced technologies are in an investment phase, they are currently consuming substantial resources with uncertain near-term financial returns. The company is focused on building market acceptance and scaling these solutions, which is typical for disruptive technologies entering the market.

Question Marks in Great-West Lifeco's portfolio represent ventures with high growth potential but currently low market share. These are typically new product launches or entries into nascent markets that require significant investment to gain traction. For example, Empower's recent expansion into Consumer-Directed Health in Q2 2025, offering HSAs and FSAs, fits this category. Similarly, the integration of private markets into 401(k) plans, while a growing trend, is a newer offering for Empower, demanding substantial marketing and education to build its market share.

Great-West Lifeco's strategic investments in digital transformation and AI, such as conversational AI, also fall under the Question Mark classification. These initiatives are in an investment phase, consuming resources with uncertain near-term returns but holding promise for future efficiency and competitive advantage. The company's exploration of new international financial markets or specialized fintech ventures would also be considered Question Marks, requiring substantial capital to establish a presence and grow market share.

The zero-fee S&P 500 Index Fund launched by Empower is another prime example of a Question Mark. While it aims to attract new clients and capitalize on market growth, it begins with a low market share, necessitating considerable investment in marketing and sales to achieve widespread adoption. These ventures are critical for long-term diversification and future market leadership, despite the initial cash consumption and risk.