Quarterly Reports to Shareholders

QUARTERLY REPORT TO THE SHAREHOLDERS

January 1 to June 30, 2022 Six Months Results

The condensed consolidated interim unaudited financial statements including notes at June 30, 2022 were approved by the Board of Directors at a meeting held today.

Great-West Lifeco Inc. (Lifeco or the Company) today announced its second quarter 2022 results. Net earnings of $735 million were down by 6% and base earnings1 of $830 million were slightly up compared to the same period in 2021.

Key Financial Highlights

In the second quarter of 2022, equity markets in the regions where the Company operates exhibited heightened volatility and ended 5% to 16% lower than March 31, 2022 levels. Interest rates increased 80-105bps in response to elevated, broad based levels of inflation which are impacting business and consumer confidence. In addition, the Canadian dollar strengthened notably against the British pound and the Euro, although weakened somewhat against the U.S. dollar.

Base earnings per share (EPS) for the second quarter of 2022 of $0.89 was consistent with $0.89 a year ago. This reflected strong insurance and investment results in all geographies which more than offset reduced net fee income from wealth management businesses and negative currency movement impacts. Base earnings grew year-over- year in the Canada, Europe and Capital and Risk Solutions segments. The U.S. segment base earnings were the most impacted by market conditions resulting in lower year-over-year base earnings notwithstanding the addition of Prudential business related base earnings of $45 million (US$35 million).

Reported net EPS for the second quarter of 2022 was $0.79, down from $0.84 a year ago, primarily due to higher acquisition related costs largely from the Prudential acquisition. Also, the second quarter of 2021 included a revaluation of deferred taxes resulting in an increase in taxes in the Europe segment; there was no revaluation in 2022.

Retuon equity of 13.7% and base retuon equity of 14.5% in the second quarter of 2022 continued to be solid in light of the macroeconomic challenges and remain within our target range.

1. Base earnings is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details.
2. Base EPS and base retuon equity are non-GAAP ratios. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details.
3. Base retuon equity and retuon equity are calculated using the trailing four quarters of applicable earnings and common shareholders' equity.

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Business Highlights

Strategic acquisition of the full-service retirement business of Prudential Financial, Inc. closed

• On April 1, 2022, a Lifeco subsidiary, Great-West Life & Annuity Insurance Company (GWL&A), which operates primarily as "Empower", closed the previously announced acquisition of the full-service retirement business of Prudential Financial, Inc. (Prudential). With the close of the acquisition, Empower's reach in the U.S. has expanded to more than 17.4 million retirement plan participants and assets under administration (AUA) to US$1.3 trillion on behalf of approximately 71,000 workplace savings plans as of June 30, 2022.
  The Company funded the total transaction value of US$3,480 million with US$1,193 million of limited recourse capital notes and US$823 million of short-term debt, in addition to existing resources.
  The Prudential acquisition added $116 billion in total on balance sheet assets, $1 billion in other assets under management4 and $250 billion in other assets under administration4 to the U.S. segment as at June 30, 2022.

On August 1, 2022, Great-West Life & Annuity Insurance Company changed its legal name to Empower Annuity Insurance Company of America.

Capital strength and financial flexibility maintained

• The Company's capital position remained strong at June 30, 2022, with a LICAT Ratio5 for Canada Life, Lifeco's major Canadian operating subsidiary, of 117% which is near the high end of the Company's internal target range and above the supervisory target. The LICAT Ratio reduced by two points in the quarter mainly due to the material in-quarter increase in interest rates.
• On July 21, 2022, OSFI released the 2023 LICAT Guideline. The Company will first report under this guideline in its March 31, 2023 LICAT filing. Based on an initial review of the guideline under the current market and economic conditions, the Company expects a positive impact to the March 31, 2023 LICAT Ratio6 on transition.

Consolidated assets of $670 billion and assets under administration7 of $2.3 trillion

• Consolidated assets were approximately $670 billion and AUA were approximately $2.3 trillion as at June 30, 2022, an increase of 6% and 2%, respectively, from December 31, 2021.

Other Developments

• On June 28, 2022, the Company hosted an analyst discussion on the expected impacts of the upcoming implementation of IFRS 178. The Company does not expect the new standard to have a material financial impact or to change the Company's underlying business strategy9.
• The Company participated in the International Sustainability Standards Board (ISSB) consultation on two new draft standards which will help facilitate consistent, comparable and timely sustainability information for the good of the capital markets and, more importantly, our planet and our communities. The Company is a proud supporter of the ISSB as a member of the Coalition of Canadian Champions.

1. Refer to the "Glossary" section of the Company's second quarter of 2022 interim MD&A for additional details on the composition of other assets under management and other assets under administration.
2. The Life Insurance Capital Adequacy Test (LICAT) Ratio is based on the consolidated results of The Canada Life Assurance Company (Canada Life), Lifeco's major Canadian operating subsidiary. The LICAT Ratio is calculated in accordance with the Office of Superintendent of Financial Institutions (OSFI)' guideline - Life Insurance Capital Adequacy Test. Refer to the "Capital Management and Adequacy" section of the Company's second quarter of 2022 interim MD&A for additional details.
3. Actual impact will depend on market and economic conditions and the Company's operating results at the time of transition.
4. Assets under administration is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures and Ratios" section of this document for additional details.
5. IFRS 17,Insurance Contracts (IFRS 17) will replace IFRS 4, Insurance Contracts effective January 1, 2023. The new standard will change the recognition and measurement of insurance contracts and the corresponding presentation and disclosures in the Company's financial statements.
6. Refer to the "Update on transition to IFRS 17 and IFRS 9" section of the Company's second quarter of 2022 interim MD&A for additional details.

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SEGMENTED OPERATING RESULTS

For reporting purposes, Lifeco's consolidated operating results are grouped into five reportable segments - Canada, United States, Europe, Capital and Risk Solutions and Lifeco Corporate - reflecting the management and corporate structure of the Company. For more information, refer to the Company's second quarter of 2022 interim MD&A.

CANADA

• Q2 Canada segment base earnings of $296 million and net earnings of $301 million- Base earnings for the second quarter of 2022 were $296 million, up 1% compared to the second quarter of 2021. The increase was primarily due to favourable morbidity and investment experience in Group Customer, partially offset by lower fee income and unfavourable experience in Individual Customer.
• Canada Life announced 2022 dividend scale for participating life insurance- On May 12, 2022, Canada Life announced the dividend scale interest rate will increase for the policies in the combined open participating account effective July 1, 2022 to 5.25%.
• Significant joint sale with ClaimSecure Inc. (ClaimSecure)- Canada Life Group Customer and ClaimSecure had their first significant joint sale in the second quarter of 2022. Integration is going well and quoting momentum is strong. Partnering with ClaimSecure has enhanced Canada Life's ability to provide leading workplace benefits solutions to Canadians.

UNITED STATES

• Q2 United States (U.S.) Financial Services base earnings of US$123 million ($156 million) and net earnings of US$84 million ($107 million)- U.S. Financial Services base earnings for the second quarter of 2022 were US$123 million ($156 million), down US$16 million or 12% from the second quarter of 2021. The decrease was primarily due to lower Empower net fee income and higher operating expenses to support participant growth. These items were partially offset by base earnings of US$35 million ($45 million) related to the Prudential acquisition as well as higher contributions from investment experience.
  Transaction costs of US$42 million ($53 million) related to the Prudential acquisition were included in the U.S. Corporate results.
• Run-ratecost synergies are on track - Annualized run rate cost synergies of US$88 million pre-tax have been achieved as of June 30, 2022 related to the Company's acquisition of MassMutual's retirement services business compared to US$80 million as of March 31, 2022. The Company remains on track to achieve run rate cost synergies of US$160 million pre-tax at the end of integration in 2022.
  Empower anticipates realizing cost synergies through the migration of Prudential's retirement services business onto Empower's recordkeeping platform. Estimated run-rate cost synergies of US$180 million are expected to be phased in over 24 months primarily when systems migrations are completed. As of June 30, 2022, annualized run rate cost synergies of US$25 million pre-tax have been achieved.
• Empower growth in AUA and participant accounts - Empower AUA increased to US$1.3 trillion at June 30, 2022 from US$1.1 trillion at December 31, 2021. Empower participant accounts have grown to 17.4 million at June 30, 2022, up from 13.0 million at December 31, 2021. The increases in AUA and participants were primarily the result of the Prudential acquisition.
• Q2 Putnam net loss of US$9 million ($12 million) - Putnam's net loss for the second quarter of 2022 was US$9 million ($12 million), compared to net earnings of US$17 million ($21 million) in the second quarter of 2021, primarily due to lower asset based fee revenue and lower net investment income, partially offset by lower expenses. For Putnam, there were no differences between net and base earnings (loss).

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