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September 28, 1999
Speaking Tuesday at the CIBC World Markets conference in New York, Raymond L. McFeetors, president and chief executive officer, Canadian operations, said Great-West holds a 20.7% market share in individual life products, 29.3% in disability, 23.7% in group life and health and 23.5% in segregated funds assets. Segregated funds are mutual funds that offer some special advantages, such as providing protection from creditors. The Canadian companies currently demutualizing are Clarica--formerly Mutual Life Insurance Company of Canada--Manulife Financial, Canada Life Financial, Industrial-Alliance and Sun Life of Canada. Great-West's main lines of business are individual, group and reinsurance. McFeetors said its products reach one in six Canadians and 22,000 employers. In the past few years, these businesses collectively have annual compound growth rates of 18.7% for return on equity, 18.1% for earnings per share and 21.8% for dividends. McFeetors said that in the individual business, about 84% of premium is from participating policies, which are the most profitable. Great-West has also been able to return its individual disability policies to profitability, he said. Another source of strength has been the acquisition of London Life, its network of agents and its "Freedom 55'' brand of life insurance. McFeetors was enthused about the strength and diversity of Great-West's businesses, saying competitors in Canada aren't as strong. The primary product of some mutuals, he said, is a level-premium term policy to age 100, which isn't even allowed in the United States. He said these policies are underpriced and that companies probably haven't set aside adequate reserves for them. He predicted they would cause competitors problems in the future. Great-West is on the verge of becoming so big that the government might have to step in over antitrust concerns, McFeetors said, but he expects the company will be able to make one more big acquisition. |
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Great-West Lifeco Inc. occupies a dominant position among life insurers
in the Canadian market and expects to maintain it even after five of its
competitors complete their demutualizations.