4th Quarter 2024 Results 2024 Management's Discussion and Analysis

MANAGEMENT'S

DISCUSSION AND

ANALYSIS

For the year ended

December 31, 2024

E1138(1123)-02/25

Management's Discussion and Analysis

For the period ended December 31, 2024

Dated: February 5, 2025

TABLE OF CONTENTS

19Canada

This Management's Discussion and Analysis (MD&A) presents management's view of the financial condition, financial performance and cash flows of Great-West Lifeco Inc. (Lifeco or the Company) for the three and twelve months ended December 31, 2024 and includes a comparison to the corresponding periods in 2023, to the three months ended September 30, 2024, and to the Company's financial condition as at December 31, 2023, as applicable. This MD&A provides an overall discussion, followed by analysis of the performance of Lifeco's four major reportable segments: Canada, United States (U.S.), Europe, and Capital and Risk Solutions.

Management's Discussion and Analysis

Businesses of Lifeco

Lifeco has operations in Canada, the U.S. and Europe through The Canada Life Assurance Company (Canada Life), Empower Annuity Insurance Company of America (Empower, formerly known as Great-West Life & Annuity Insurance Company), and Irish Life Group Limited (Irish Life). On January 1, 2024, Lifeco completed the previously announced sale of Putnam Investments (Putnam) to Franklin Resources, Inc., operating as "Franklin Templeton". As a result of the transaction, Putnam is presented as discontinued operations throughout this document.

In Canada, Canada Life offers a broad portfolio of financial and benefit plan solutions for individuals, families, businesses and organizations through three primary business units: Workplace Solutions, Individual Wealth Management and Insurance & Annuities. Through Workplace Solutions, the Company provides life, accidental death and dismemberment, critical illness, disability, health and dental protection, creditor insurance as well as retirement savings and income and annuity products and other specialty products to group clients in Canada. These products are distributed through an extensive network of group sales offices located across the country through brokers, consultants and financial security advisors. Through Individual Wealth Management, the Company provides wealth savings and income products and services to individual customers. Through Insurance & Annuities, the Company provides individual life, disability and critical illness insurance products and services, as well as individual life annuities to individual customers. These individual insurance and wealth products are distributed through multiple channels: Advisor Solutions; a distribution channel for advisors with a direct contract with Canada Life, managing general agencies (MGAs), national accounts, Investment Planning Counsel (IPC), and Value Partners Group (Value Partners).

In the U.S., Empower Annuity Insurance Company of America (Empower) is a leading provider of employer-sponsored retirement savings plans in the public/non-profit and corporate sectors. Empower consists of: Empower Defined Contribution, which aligns with the Workplace Solutions business value driver, offering saving, investment and advisory services through employer-sponsored plans; and Empower Personal Wealth, which operates under the Wealth & Asset Management value driver, offering individual product solutions and providing retail wealth management products and services to individuals, including individual retirement accounts and after-tax investment accounts. Empower's products and services are marketed nationwide through its sales force, brokers, consultants, advisors, third-party administrators and financial institutions.

The Europe segment is comprised of three distinct business units: Workplace Solutions, Individual Wealth & Asset Management and Insurance & Annuities, and serves customers in the United Kingdom (U.K.), Ireland and Germany, offering individual and group protection and wealth management products, including payout annuity products, equity release mortgages, pensions and investments products. The Company operates under the Canada Life brand in the U.K. and Germany and under the Irish Life brand in Ireland along with other acquired brands within the broker market in Ireland.

The Capital and Risk Solutions segment includes the Reinsurance business unit under the Insurance & Risk Solutions value driver, which operates primarily in the U.S., Barbados, Bermuda and Ireland. Reinsurance products are provided through Canada Life and its subsidiaries and include both reinsurance and retrocession business transacted directly with clients or through reinsurance brokers. As a retrocessionaire, the Company provides reinsurance to other reinsurers to enable those companies to manage their insurance risk.

Lifeco currently has no other material holdings and carries on no business or activities unrelated to its holdings in Canada Life, Empower, Irish Life and their subsidiaries. However, Lifeco is not restricted to investing in those companies and may make other investments in the future.

Basis of Presentation and Summary of Material Accounting Policies

The consolidated financial statements of Lifeco, which are the basis for data presented in this report, have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) unless otherwise noted and are presented in millions of Canadian dollars unless otherwise indicated. This MD&A should be read in conjunction with the Company's annual consolidated financial statements for the year ended December 31, 2024.

Management's Discussion and Analysis

Cautionary Note Regarding Forward-Looking Information

This MD&A contains forward-looking information. Forward-looking information includes statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "will", "may", "expects", "anticipates", "intends", "plans", "believes", "estimates", "objective", "target", "potential" and other similar expressions or negative versions thereof. Forward-looking information includes, without limitation, statements about the Company and its operations, business (including business mix), financial condition, expected financial performance (including revenues, earnings or growth rates, medium-term financial objectives and base earnings objectives for the Empower business), strategies and prospects, expected costs and benefits of acquisitions and divestitures (including timing of integration activities and timing and extent of revenue and expense synergies), expected expenditures or investments (including but not limited to investment in technology infrastructure and digital capabilities and solutions and investments in strategic partnerships), value creation and realization and growth opportunities, product and service innovation, expected dividend levels, expected cost reductions and savings, expected capital management activities and use of capital, the timing and extent of possible share repurchases, market position, estimates of risk sensitivities affecting capital adequacy ratios, anticipated global economic conditions, potential impacts of catastrophe events, potential impacts of geopolitical events and conflicts and the impact of regulatory developments on the Company's business strategy, growth objectives and capital.

Forward-looking statements are based on expectations, forecasts, estimates, predictions, projections and conclusions about future events that were current at the time of the statements and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the financial services industry generally, including the insurance, mutual fund and retirement solutions industries. They are not guarantees of future performance, and the reader is cautioned that actual events and results could differ materially from those expressed or implied by forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of the Company and there is no assurance that they will prove to be correct. In particular, in setting its objective to achieve double-digit base earnings growth in the Empower business in 2025, management has assumed that the performance of equity, interest rate and credit markets during the relevant period is consistent with management's expectations, which take into account current market information and assume no credit impairments, and further that actual sales, client retention and conversion rates, customer behaviour (including contributions, redemptions, withdrawals and lapse rates), expense levels, and mix of business at Empower are consistent with management's estimates. In arriving at our assessment of the Company's potential exposure to Global Minimum Tax and our expectation regarding the impact on our effective income tax rate and base earnings, management has relied on its interpretation of the relevant legislation. It has also assumed a starting point of its current mix of business and base earnings growth consistent with management's base earnings objectives disclosed in this MD&A. With respect to possible share repurchases, the amount and timing of actual repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, our ability to effect the repurchases on a prudent basis, capital requirements, applicable law and regulations (including applicable securities laws), and other factors deemed relevant by the Company, and may be subject to regulatory approval or conditions. In all cases, whether or not actual results differ from forward-looking information may depend on numerous factors, developments and assumptions, including, without limitation, the ability to integrate and leverage acquisitions and achieve anticipated benefits and synergies, the achievement of expense synergies and client retention targets from the acquisition of the Prudential retirement business, the Company's ability to execute strategic plans and adapt or recalibrate these plans as needed, the Company's reputation, business competition, assumptions around sales, pricing, fee rates, customer behaviour (including contributions, redemptions, withdrawals and lapse rates), mortality and morbidity experience, expense levels, reinsurance arrangements, global equity and capital markets (including continued access to equity and debt markets and credit instruments on economically feasible terms), geopolitical tensions and related economic impacts, interest and foreign exchange rates, inflation levels, liquidity requirements, investment values and asset breakdowns, hedging activities, financial condition of industry sectors and individual issuers that comprise part of the Company's investment portfolio, credit ratings, taxes, impairments of goodwill and other intangible assets, technological changes, breaches or failure of information systems and security (including cyber attacks), assumptions around third-party suppliers, changes in local and international laws and regulations, changes in accounting policies and the effect of applying future accounting policy changes, changes in actuarial standards, unexpected judicial or regulatory proceedings, catastrophic events, continuity and availability of personnel and third-party service providers, unplanned changes to the Company's facilities, customer and employee relations, levels of administrative and operational efficiencies, and other general economic, political and market factors in North America and internationally.

The reader is cautioned that the foregoing list of assumptions and factors is not exhaustive, and there may be other factors listed in other filings with securities regulators, including factors set out in the "Risk Management" and "Summary of Critical Accounting Estimates" sections of this document and in the Company's annual information form dated February 5, 2025 under "Risk Factors", which, along with other filings, is available for review at www.sedarplus.com. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not to place undue reliance on forward-looking information.

Other than as specifically required by applicable law, the Company does not intend to update any forward-looking information whether as a result of new information, future events or otherwise.

Important Note Regarding Sustainability Disclosure

Certain forward-looking statements in the Company's filings relate to the Company's climate-related and diversity-related measures, ambitions, goals, objectives, priorities, strategies and commitments or actions that will be taken to achieve them. The climate-related statements include statements with respect to the Company's ambition to achieve net-zero GHG emissions for its operating and financing activities by 2050, the Company's initial interim net zero goals for operations and investments, the Company's plan to review and revise initial interim net zero goals as appropriate, the causes and potential impacts of climate change globally, and the Company's approach to identifying and managing climate-related risks and opportunities. The diversity-related statements include statements with respect to growing representation of women and underrepresented groups in management. The forward-looking information in the Company's filings is presented for the purpose of assisting our stakeholders in understanding how we currently intend to address climate-related and diversity-related governance, strategy, risks, opportunities, and objectives, and is not appropriate for other purposes.

Management's Discussion and Analysis

Any goals, objectives, ambitions, commitments or targets discussed in the Company's filings, including but not limited to the Company's net-zero related goals (including interim net zero goals) and diversity-related measures, are aspirational. They may need to change or be recalibrated as data improve and as climate science, regulatory requirements and market practices regarding standards, methodologies, metrics and measurements evolve. Our climate risk analysis and net-zero strategy remain under development, and the data underlying our analysis and strategy remain subject to evolution over time and the scope of assets to be included in our 2050 net zero related goals, remains under review. The Company does not currently have a comprehensive transition plan in place to achieve its net zero-related goals and ambitions and the timing for developing such a plan and its scope and achievability remain uncertain. Moreover, the data needed to define the Company's plan to achieve those goals and ambitions is limited in quality and availability and is inconsistent across the sectors the Company chooses to focus on. We are also continuing to develop our diversity-related data. There is a strong possibility that our expectations, forecasts, estimates, predictions and conclusions may not prove to be accurate and our assumptions may prove to be incorrect, and there is a material risk we will not achieve our climate-related and diversity-related goals, objectives, ambitions, strategies and commitments. In addition, many of the assumptions, standards, metrics and measurements used in preparing these forward-looking statements are not audited or independently verified, have limited comparability and continue to evolve.

Any goals, objectives, priorities, ambitions, commitments or targets discussed in the Company's filings, may also need to change or be recalibrated to meet our other strategic objectives and the reasonable expectations of our stakeholders, including expectations around financial performance. As a financial services company, our primary purpose is to provide our clients and customers with solutions to meet their financial security needs and to deliver on the promises we make to them. Our ability to fulfil this corporate purpose depends in large part on effective and responsible capital allocation and the ability to create value within the boundaries of our stakeholders' expectations, including expectations around financial performance. The path to achieving net zero and our climate-related goals will require significant investment, resources, systems and technologies by third parties we do not control. Faced with a wide range of stakeholder interests, we will need to effectively manage trade-offs and make choices about how to deploy financial and human capital. These choices could include prioritizing other strategic objectives over our climate-related ambitions and goals in pursuit of fulfilling our primary purpose, delivering value to our stakeholders and meeting expectations around financial performance. As our business, our industry and climate science evolve over time, we may need to adjust our climate-related goals and our approach to meeting them. We will also need to remain thoughtful about the regulatory and business environment of the jurisdictions in which we operate, as our ability to achieve our climate goals is contingent on the success of our partners and communities.

We caution readers that numerous factors (many of which are beyond the control of the Company) may cause actual results to differ materially and impact the Company's ability to achieve its climate-related and diversity-related goals, objectives, priorities, ambitions, strategies and targets. These factors include, without limitation, the transition to a low-carbon economy, the need for more and better climate data and standardization of climate- related measurement methodologies, our ability to gather and verify data, our ability to develop indicators to effectively monitor our advancements and assess and manage climate-related risks, the need for active and continued action by stakeholders (including governmental and nongovernmental organizations, our counterparties and other businesses and individuals), trade-offs and choices we make that prioritize other strategic objectives and financial performance over our climate-related goals the ability of clients, regulators and suppliers to meet and report on their publicly stated emissions and commitments, the viability of third-party decarbonization scenarios, the availability of carbon offset and renewable energy instruments on economically feasible terms, compliance with our policies and procedures, our ability to recruit and retain key personnel in a competitive environment for talent, technological advancements, the evolution of consumer behaviour, varying decarbonization efforts across economies, the challenges of balancing emission reduction goals with an orderly, just and inclusive transition and geopolitical factors that impact global energy needs, the legal and regulatory environment, and regulatory compliance considerations. In relation to our climate-related ambitions, goals, objectives, priorities, strategies and targets, there are limitations and uncertainties inherent in climate science, climate risk analysis and reporting. The Company has made good faith approximations and assumptions in establishing its interim Scope 1 and 2 reduction goals and initial reduction goals for Scope 3 financed emissions. However, there are many factors that are the subject of ongoing climate science and that we cannot foresee or accurately predict which will impact our ability to achieve those goals.

Cautionary Note Regarding Non-GAAP Financial Measures and Ratios

This MD&A contains some non-Generally Accepted Accounting Principles (GAAP) financial measures and non-GAAP ratios as defined in National Instrument 52-112 "Non-GAAP and Other Financial Measures Disclosure". Terms by which non-GAAP financial measures are identified include, but are not limited to, "base earnings (loss)", "base earnings (loss) (US$)", "base earnings: insurance service result", "base earnings: net investment result", "assets under management" and "assets under administration". Terms by which non-GAAP ratios are identified include, but are not limited to, "base earnings per common share (EPS)", "base retuon equity (ROE)", "base dividend payout ratio" and "effective income tax rate - base earnings - common shareholders". Non-GAAP financial measures and ratios are used to provide management and investors with additional measures of performance to help assess results where no comparable GAAP (IFRS) measure exists. However, non-GAAP financial measures and ratios do not have standard meanings prescribed by GAAP (IFRS) and are not directly comparable to similar measures used by other companies. Refer to the "Non-GAAP Financial Measures and Ratios" section in this MD&A for the appropriate reconciliations of these non-GAAP financial measures to measures prescribed by GAAP as well as additional details on each measure and ratio.

Management's Discussion and Analysis

Consolidated Operating Results

• This metric is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details.

• Refer to the "Glossary" section of this document for additional details on the composition of this measure.

• This metric is a non-GAAP ratio. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details.

• Comparative result for the period ended December 31, 2023 has been restated to exclude amounts related to discontinued operations which were included in error in the Q4 2023 MD&A.

• The calculation for financial leverage ratio includes the after-tax non-participating contractual service margin (CSM) balance in the denominator, excluding CSM associated with segregated fund guarantees. This reflects that the CSM represents future profit and is considered available capital under LICAT. These ratios are estimates based on available data.

• The Life Insurance Capital Adequacy Test (LICAT) Ratio is based on the consolidated results of The Canada Life Assurance Company, Lifeco's major Canadian operating subsidiary. The LICAT Ratio is calculated in accordance with the Office of Superintendent of Financial Institutions' guideline - Life Insurance Capital Adequacy Test. Refer to the "Capital Management and Adequacy" section of this document for additional details.

Management's Discussion and Analysis

Lifeco 2024 Highlights

Financial Performance

• For the twelve months ended December 31, 2024, base earnings of $4,192 million ($4.50 per common share) compared to $3,667 million ($3.94 per common share) a year ago, an increase of 14%, reflecting strong business growth in all segments and positive impacts of favourable markets in 2024.
• For the twelve months ended December 31, 2024, net earnings from continuing operations of $4,011 million ($4.30 per common share) compared to $2,862 million ($3.07 per common share) a year ago, an increase of 40%, primarily due to the increase in base earnings as well as improved market experience relative to expectations.
• For the twelve months ended December 31, 2024, Lifeco's combined quarterly dividends paid to common shareholders increased by 7% to $2.22 per share.
• The Company maintained its strong capital position as evidenced by a Life Insurance Capital Adequacy Test (LICAT) Ratio at December 31, 2024 of 130% for Canada Life, Lifeco's major operating subsidiary, which exceeded the OSFI Supervisory Target Total Ratio of 100%, and Supervisory Minimum Total Ratio of 90%.
• The Company's financial leverage ratio at December 31, 2024 was 29% compared to 30% at the end of 2023. This reduction is primarily due to growth in equity and non-participating CSM, excluding segregated funds, as well as repayment of short- term debt. These items were partially offset by the impact of currency movement.

Medium-Term Financial Objectives

The Company measures performance against its medium-term financial objectives, with medium-term defined as 3 to 5 years. The Company aims to create value through disciplined capital deployment to achieve, over the medium-term, 8-10% base EPS growth per annum, 16-17% base retuon equity (ROE) and to deliver strong cash generation.

The Company has also stated its objective to achieve double-digit base earnings growth in Empower in 2025.

• This metric is a non-GAAP ratio. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details.

• 2019, 2020 and 2021 base earnings were calculated by excluding items from net earnings as discussed in the "Non-GAAP Financial Measures and Ratios" section of the Company's Q4 2024 MD&A. 2019 base earnings as reported were $2,704 million and base earnings per share was $2.86 compared to net earnings of $2,359 million and net earnings per share of $2.49. 2020 base earnings as reported were $2,669 million and base earnings per share was $2.88 compared to net earnings of $2,943 million and net earnings per share of $3.17. 2021 base earnings as reported were $3,260 million and base earnings per share was $3.51 compared to net earnings of $3,128 million and net earnings per share of $3.37. For purposes of calculating the 5-year growth rate for base EPS under the current definition of base earnings to provide a more accurate comparison for the 3 and 5-year growth rates, amortization of acquisition related finite life intangible assets of $41 million, $41 million and $137 million after-tax was added back to 2019, 2020, 2021 base earnings. In addition, the Company excluded earnings related to Putnam Investments, which was sold to Franklin Templeton on January 1, 2024, of $101 million, $23 million and $26 million from 2019, 2020 and 2021 base earnings. With these adjustments, 2019 base earnings were $2,719 million and base EPS of $2.87; 2020 base earnings were $2,687 million and base EPS of $2.90; and 2021 base earnings were $3,296 million and base EPS of $3.55.

• This is the 3-year average base ROE under IFRS 17. The 2-year average base ROE under IFRS 4 is 14%. The prior base ROE medium-term objective was 14% - 15% under IFRS 4.

2024 Developments

Financial Highlights

• Total assets under administration exceeded $3.2 trillion with growth across each of Lifeco's operating segments of 29% in Capital and Risk Solutions, 17% in Europe, 12% in Canada and 14% (6% in U.S. dollars) in the U.S. from December 31, 2023.
• The Organization for Economic Co-Operation and Development (OECD) introduced a 15% Global Minimum Tax (GMT) regime that has been adopted for 2024 by all countries in which the Company has significant operations, other than the U.S. and Isle of Man. Legislation has been enacted by Canada, Barbados, Germany, Ireland, the U.K. and Switzerland with an effective date of January 1, 2024. In 2024, the Company recognized a Global Minimum Tax (GMT) current tax expense of $113 million on net earnings and $141 million on base earnings, primarily related to its operations in Barbados and Ireland, impacting the Europe and Capital and Risk Solutions segments.

Canada

• On October 1, 2024, Canada Life Investment Management Ltd. (CLIML) and Counsel Portfolio Services Inc. (Counsel), a subsidiary of IPC, amalgamated. Bringing these two investment fund management companies together into one centre of excellence is expected to allow Canada Life to unlock new growth opportunities, achieve economies of scale and improve operational effectiveness.

Management's Discussion and Analysis

United States

• In the United States, on January 1, 2024, Lifeco completed the previously announced sale of Putnam Investments to Franklin Resources, Inc., operating as "Franklin Templeton", in exchange for Franklin Templeton common shares, cash, and contingent consideration of up to US$375 million over a five to seven-year period. In the first quarter of 2024, the Company recorded a net loss of $115 million reflecting closing costs as well as a $44 million final gain on sale within discontinued operations. Lifeco retains its controlling interest in PanAgora Asset Management, a leading quantitative asset manager. The Company currently holds approximately 31,600,000 Franklin Templeton shares and has agreed to hold a majority of these shares until at least January 1, 2029. The shares are held at fair value with changes in fair market value flowing through other comprehensive income (OCI).
  In addition to the sale, Lifeco, along with Power Corporation of Canada and Franklin Templeton, entered into a strategic relationship to distribute Franklin Templeton products for the benefit of clients, distribution partners, and shareholders.
• As of June 30, 2024, with the successful completion of system migrations of the full-service retirement services business of Prudential, Empower achieved US$180 million pre-tax run rate synergies following the acquisition on April 1, 2022, consistent with expectations. Revenue synergies of US$20 million were achieved on a run-rate basis by the end of 2024 and are expected to grow to US$50 million by the end of 2026.
  Overall, acquired Prudential retention targets have been exceeded with asset retention of 94% and revenue retention of 86%.

Europe

• On January 23, 2024, Canada Life U.K. announced the immediate closure of the Select Account, The Retirement Account, and the Canada Life Trustee Investment Plan to new business, representing less than 1% of its customer base. On December 23, 2024, Canada Life U.K. announced the signing of an agreement to transfer part of this business to Countrywide Assured plc (Countrywide), a subsidiary of Chesnara plc. Concurrently, the two parties entered into a reinsurance agreement such that the risks and rewards of the underlying business are transferred to Countrywide. The transfer is subject to customary closing conditions including regulatory approvals and is expected to complete by the end of 2025. This decision enables Canada Life U.K. to focus on core lines, including offshore wealth products.

Capital and Risk Solutions

• The Capital and Risk Solutions segment continued to grow by providing tailored solutions to customers while increasing diversification within the portfolio. In 2024, the Capital and Risk Solutions segment continued to expand its international presence in targeted new markets, while continuing to focus on core markets and product expansion in Europe and the U.S. During 2024, the Company had a strong new business year, completing a number of transactions with continued growth in the structured business. Of note, the Company's geographic expansion included two structured transactions in Australia and the asset intensive business grew with two transactions signed in the fourth quarter of 2024.

Outlook for 2025

Refer to Cautionary Note regarding Forward-looking Information and Cautionary Note regarding Non-GAAP Financial Measures and Ratios at the beginning of this document.

• Lifeco is continuing to focus on its core strategies: delivering financial security and wellness through the workplace, providing advice-centered wealth management, delivering strong investment and asset management and leveraging risk and capital management expertise. The Company intends to invest strategically, both organically and through acquisitions, to drive growth, productivity and operational resilience while maintaining strong risk and expense discipline, to deliver sustainable long-term value to its customers and shareholders.
• In Canada, the Company will continue to leverage the strength of the Canada Life brand to develop innovative products and services and broaden and deepen its distribution channels to better serve its customers. Specifically, the Workplace Solutions business plans to continue its focus and investment in the disability offering operations to support growth in the health market as well as to make significant operational and digital investments in the group retirement business to improve customer experiences. As the Company successfully onboarded the dental plan for retired Canadian public servants in November 2024, it expects its strong market share and distribution capacity will lead to continued growth in 2025. Growing the Freedom Experience has also been a key area of focus as the Company seeks to provide customized solutions to increasingly unique customer needs. In its Individual Wealth Management business, the Company will continue to leverage recently acquired capabilities to advance its growth strategies with an enhanced offering to advisors in all channels. This commitment to advice is expected to benefit strong customer retention and acquiring new business. The Insurance & Annuities business will continue to advance on business strategies of balancing growth through the offering of a comprehensive range of individual insurance products with disciplined pricing and risk selection. Operational expense management will continue to be critically important for the Canada segment to deliver strong financial results.

Management's Discussion and Analysis

• In the U.S., the Company is positioned to capitalize on substantial growth opportunities across various plan types, company sizes and market segments. Through its defined contribution business, Empower has enhanced its expertise, expanded its capabilities and broadened its product portfolio. Empower continues to accelerate growth and is well- prepared to leverage the developments of expected transformative shifts in the financial services industry, including increased capital investment and the adoption of advanced technologies to capture market growth opportunities. Empower Personal Wealth will continue to serve its existing customers and drive growth through a hybrid approach that integrates the expertise of financial advisors with sophisticated digital platforms. Empower Personal Wealth will continue to develop and expand a broad range of product solutions that leverage the Empower Personal Dashboard and Empower Advisors to offer customized wealth solutions to an expanding customer base. In 2025, Empower anticipates realizing revenue synergies through the financial planning and equity compensation solution services offered through OptionTrax by Empower.
• In Europe, the Company is focusing on maintaining or growing its market positions while investing in customer service systems and automation. In Workplace Solutions, the U.K. group protection business is expected to enhance Canada Life's competitive position as one of the largest insurers in the market through technology-driven efficiencies and the expanded access of the WeCare support service to all insured employees. Through the Irish Life brand, the Company will focus on developing a fully integrated corporate engagement strategy to maximize the effectiveness of strong corporate relationships, ensure the Company maintains its strong pension, risk and health propositions and continue the journey of integrating its wealth and employee benefits consulting businesses. In the Individual Wealth & Asset Management business, Irish Life will focus on the growth of its wealth brand, Unio Wealth Management, while maintaining its focus in the areas of sustainability and product innovation. Furthermore, Canada Life U.K. expects to maintain its position as the market leader in the single premium international investment bond marketplace. Canada Life in Germany will focus on growth and product diversification, efficiency through automation and enhancing the experience of the independent financial advisor and customer. In its Insurance & Annuities business, Canada Life U.K. and Irish Life will focus on maintaining its share of the retail payout annuities market while investing in customer service systems. Moreover, the Company will continue to further develop its offerings and capability in the bulk annuity market in 2025, extending the offering across a wider range of the market.
• In Capital and Risk Solutions, the Reinsurance business unit will continue to help its clients and other affiliated companies meet capital challenges through innovative reinsurance solutions. Demand for structured reinsurance remains strong and will remain a focus for 2025. Internationally, Canada Life continues to explore opportunities for measured expansion into new markets where the Company's innovative reinsurance solutions can be deployed to support clients' evolving needs.
• The global economy is expected to experience a period of transition in 2025. Inflation has been brought broadly in line with domestic targets in Canada and broader Europe as central banks continue to ease monetary restraints. In the U.S., disinflation efforts have stalled, with the Federal Reserve indicating a pause on previously expected interest rate reductions. Economic growth in the U.S., and to a lesser extent, Canada and the euro zone, is expected to remain strong in 2025 with excess demand and enhanced productivity. Uncertainty remains with the impacts of potential policy changes, such as tariffs, made by the new U.S. administration that could dampen growth for impacted countries. Global equity markets were strong throughout 2024, with outperformance in the U.S., and the outlook for 2025 is generally positive with healthy fundamentals and strong forecasted earnings growth. The U.S. dollar is expected to remain strong relative to a broad range of currencies, including the Canadian dollar, primarily due to a higher U.S. policy rate and potential trade policy changes. While there is a high degree of uncertainty in the broader macroeconomic outlook, the Company's well diversified business portfolio and prudent approach to risk management positions it well to execute on its core strategies in 2025. See the "Risk Management" section of this document for additional details.

Management's Discussion and Analysis

Base and Net Earnings

Consolidated base earnings and net earnings of Lifeco include the base earnings and net earnings of Canada Life (and its operating subsidiaries), Empower and PanAgora Asset Management, together with Lifeco's Corporate operating results. Net earnings also include the earnings from Putnam Investments reported as discontinued operations.

For a further description of base earnings, refer to the "Non-GAAP Financial Measures and Ratios" section of this document.

• This metric is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details.

• Refer to the "Glossary" section of this document for additional details on the composition of this measure.

• Included in other non-market related impacts are business transformation impacts (including restructuring and integration costs as well as acquisition and divestiture costs), amortization of acquisition-related intangible assets and tax legislative changes and other tax impacts.

Base Earnings

Base earnings for the fourth quarter of 2024 of $1,115 million ($1.20 per common share) increased by $144 million or 15% from $971 million ($1.04 per common share) a year ago reflecting higher net fee and spread income from all segments, partially offset by the impact of the GMT in the Capital and Risk Solutions and Europe segments. Additionally, base earnings growth was driven by higher equity markets and organic growth in Workplace Solutions in the Canada segment and higher CSM recognized for services provided in the Europe segment. These items were partially offset by lower spread income and higher operating expenses in the U.S. segment, weaker individual insurance morbidity experience and lower earnings on surplus in the Canada segment, less favourable group and health insurance experience in the Europe segment, as well as favourable property catastrophe claims experience from the prior year that did not repeat in the Capital and Risk Solutions segment.

For the twelve months ended December 31, 2024, Lifeco's base earnings were $4,192 million ($4.50 per common share) compared to $3,667 million ($3.94 per common share) a year ago. The increase was primarily due to favourable insurance experience and higher fee income in the Canada segment, growth in surplus income in the U.S. and Europe segments as well as the same reasons discussed for the in-quarter results. These items were partially offset by lower surplus earnings in the Canada segment and a change to certain tax estimates from the prior year in Germany that did not repeat in the Europe segment, as well as the same reasons discussed for the in-quarter results.