Thank you for standing by. This is the conference operator. Welcome to the Great-West Lifeco Third Quarter 2021 Results Conference Call. I would now like to turn the conference over to Mr. Paul Mahon, President and CEO of Great-West Lifeco. Please go ahead. Thank you, Ariel. Good morning and welcome to Great-West Lifeco's Third Quarter 2021 Conference Call. We hope that you and your families are safe and healthy. Joining me on today's call is Garry MacNicholas, Executive Vice President and Chief Financial Officer, and together we'll deliver today's formal presentation. Also joining us on the call and available to answer your questions are David Harney, President and COO, Europe; Arshil Jamal, President and Group Head, Strategy, Investment, Reinsurance, and Corporate Development; Jeff Macoun, President and Chief Operating Officer, Canada; Ed Murphy, President and Chief Executive Officer of Empower Retirement; and Bob Reynolds, President and Chief Executive Officer, Putnam Investments. Before we start, I'll draw your attention to our cautionary notes regarding forward-looking information and non-IFRS financial measures, and that's on slide two. These apply to today's discussion and presentation materials. Please turn to slide four. We're very pleased with our third quarter performance, and that's highlighted by solid underlying business results across all businesses and strong continuing momentum. Before we get into a review of the third quarter results, I'd like to take a moment to address our changing world. There's a range of important issues that are reshaping both national and global priorities. That includes the ongoing COVID pandemic and plans towards recovery, stubborn and persistent challenges that we see regarding racial and social injustice, rising inflation and disruptions to the global supply chain, and also the urgent need for collective action on climate. The reality is these are real issues, and we are engaged in the important discourse that's happening globally to resolve them. We fundamentally believe that to effectively address these issues, it will take collaboration between government, business, communities, and civil society. I can assure you that Great-West Lifeco is deeply committed to being an active participant in defining and implementing solutions driven by our values and our purpose. A great example is our purpose at Canada Life here in Canada, which is to improve the financial, physical, and mental well-being of Canadians. This mindset helps shape our role in addressing environmental, diversity, equity, and inclusion, and sustainability challenges in the context of our own ESG programs. Our values inform similar work in the United States and across the European markets. We look forward to sharing more on this in the coming weeks and months. Amid all this challenge and change, Great-West Lifeco is well positioned to continue creating value for stakeholders across our businesses. Our performance is supported by our values, our resilient and diversified business model, our disciplined approach to capital deployment, and our deep risk-sensitive experience and expertise. Looking to our value creation priorities and medium-term financial objectives, we're very pleased with our progress this quarter, including strong financial results. I'll provide some insights into how we're advancing our business strategies when we get to our segment discussion shortly. These include launching solutions that marry our expertise with customers' values and needs, like responsible investing, digital experiences that are personalized, and advice that guides customers as they move towards their financial wellness goals. We've been very active in M&A over the last year with a focus on three customer focus priorities: advice, digital delivery, and workplace extensions. Let me pause now around the fourth priority, risk and investment expertise. Last month, we announced a strategic partnership with Sagard Holdings. This follows another transaction we did a year ago with Mackenzie to acquire a strategic stake in Northleaf. These actions and other steps we've taken across the portfolio broaden our access to alternative investment capabilities. This is a key area of focus as we work to strengthen products and service for customers and increase returns for shareholders. By focusing on our values and investing in our priorities, we are confident in our ability to achieve our medium-term financial objectives. While Garry will elaborate on the drivers in his prepared remarks, the bottom of this slide illustrates our performance this quarter relative to our stated objectives. Please turn to slide five. Our third quarter saw strong, very strong overall results supported by consistent performance across businesses. Results reflected solid operating fundamentals and the benefits of disciplined capital deployment. While our Capital and Risk Solutions segment set up provisions for catastrophe losses and experienced U.S. mortality issues related to COVID, expected profit growth was strong. Overall base earnings in the quarter were CAD 870 million, and net earnings were CAD 872 million. Base EPS of CAD 0.93 was up 27% year-over-year. The strong year-over-year growth in EPS reflects higher market levels, the MassMutual business coming on stream, including synergies and excellent expected profit growth in all segments. Net earnings of CAD 0.94 per share were up 6% year-over-year, mainly due to higher base earnings with positive actuarial basis changes and market-related impacts offsetting acquisition-related costs. You recall that in Q3 2020, there was a gain on the sale of IPSI in Ireland that moderates the year-over-year growth rate. Turning to Canada results on slide six, we're pleased to see solid momentum in insurance sales and strong wealth sales in quarter for both group and individual customer. We're advancing our Canadian wealth management strategy with the launch of new Canada Life Sustainable Portfolios in September. The new portfolios provide investors with access to responsible investing strategies that are diversified across both asset classes and regions. Our strategic partnership with Sagard will broaden our access to alternative assets for both wealth management and balance sheet solutions. We're also extending our group offering through the acquisition of ClaimSecure, which closed on September 1st. It will enhance Canada Life's workplace benefits capabilities and extend our presence in a growing market for TPA and TPP services. Moving to slide seven, Empower's strong growth trajectory continued this quarter with large plan sales driving a year-over-year increase, combined with strong growth in the government, nonprofit, and retail wealth management segments. Notably, Empower IRA assets and Personal Capital assets were both up over 50% compared to last year. As I noted last quarter, Empower IRA growth has been achieved using our existing model before leveraging Personal Capital capabilities. We're pleased to have recently launched the first phase of a new personalized digital platform that combines the experience and technology of Empower and Personal Capital for the first time. This enhanced customer experience will continue to roll out across Empower segments over 2022. Importantly, the MassMutual and Personal Capital integrations are progressing well. To date, we've achieved $60 million in annual pre-tax run rate synergies related to MassMutual. We're on track to reach our $160 million target in 2022. Finally, we continue to track to a Q1 2022 closing for the Prudential transaction. Moving to slide eight. Putnam has continued to deliver strong investment performance for customers with 28 funds rated four or five stars by Morningstar. This performance underpins our ability to sustain and grow our assets under management, which increased by $18 billion year-over-year to just under $200 billion. This growth was supported by strong equity markets and solid asset retention across equity and longer duration fixed income solutions, with net outflows of $1.6 billion, primarily from lower fee fixed income products. Moving to slide nine. Sales in Europe continued to rebound from COVID impacts with a GBP 1.3 billion U.K. annuity deal in quarter. We've seen strength in equity release mortgage sales alongside higher wealth sales. Europe also saw overall positive flows in both wealth management and investment only solutions. In Ireland, we closed the Ark Life acquisition on November 1st, bringing 150,000 policies and EUR 2.1 billion in assets to Irish Life. As a reminder, this is a very straightforward integration as we were already administering the business on the Irish Life platform as an outsourced service provider. Moving to slide 10. Capital and Risk Solutions saw strong expected profit growth of 8% year-over-year. The pipeline for new business remains very strong in both structured life and longevity, and we completed a reinsurance agreement covering a significant block of life policies in Japan. Japan is a new market for us, and this is the second transaction we've done there this year, a testament to our strong reputation and recognized expertise. Although not covered on this slide, there were two reinsurance headwinds in quarter that impacted base earnings. These were P&C CAT loss claims related to flooding and elevated U.S. traditional life reinsurance claims related to COVID. While Garry will cover these matters in his comments, we remain comfortable with our overall reinsurance risk profile and confident with our growth prospects. With that, I'll now turn the call over to Garry to review the financial highlights. Garry. Thank you, Paul. Please turn to slide 12. Overall, as Paul noted, we're very pleased with the financial results this quarter. In addition to highlighting the strong momentum we see across the businesses, the results also reflect the strategic deployment of capital in the past year. Compared to the prior year, base EPS of CAD 0.93 was up 27% and closer to 30% in constant currency. The increase was due to a number of factors, broad-based business growth, higher stock market levels, and the significant acquisitions in the last year. Notwithstanding adverse claims experience in the Capital and Risk Solutions reinsurance business unit, the strength in base earnings was evident across the segments. While there were a number of larger items impacting results this quarter, they were generally offsetting, with the strength in base earnings reflecting very solid underlying business fundamentals. Starting with Canada, base earnings were CAD 312 million, up 16% from Q3 last year. Business performance was good, with expected profit up 6% and the insurance experience, life, health, and disability producing a solid gain. Canada also saw a steady contribution from yield enhancement activity in the quarter. In the U.S., base earnings were up significantly from Q3 2020. The acquired MassMutual business continued to perform well, adding CAD 68 million or $54 million to base earnings, including some early expense synergy gains and strong fee income. Note this includes financing costs and amortization of intangibles on the MassMutual business. On a run rate basis, $60 million of the targeted $160 million pre-tax expense synergies have been achieved thus far. Customer retention to date has also been excellent, and integration activity is on track. Personal Capital continues to invest in new customer acquisition to fuel growth and profitability, and it narrowed the base loss this quarter to $4 million as the in-force book of business continues to grow and generate profits. The rollout of Personal Capital digital capabilities to the broader Empower client base is successfully underway with an initial pilot group, with further rollout scheduled for later this year and into Q1. Looking at Empower excluding MassMutual Personal Capital, base earnings were up sharply year-over-year as a result of strong organic growth, higher markets, and the continued growth trajectory of the Empower IRA rollover business, with assets under administration growing 54% year-over-year in that book. Empower also benefited from investment gains in the surplus account this quarter and a one-time tax gain of CAD 6 million. Putnam's results also improved year-over-year. Fee revenues were up due to the growth in AUM and also the growth in equity mandates relative to short duration fixed income and improving mix from a revenue perspective. While seed capital results were largely breakeven in period compared to strong gain in Q3 2020, Putnam did benefit this quarter from a one-time tax gain of CAD 14 million. In Europe, base earnings increased 27%, helped by a one-time pension expense gain in Ireland, although somewhat offset by FX rates on the euro. Good underlying performances in the U.K., Ireland and Germany were driven by the continued recovery in sales, favorable insurance experience and increased fee revenue from net flows and market growth. The U.K. landed a CAD 1.3 billion bulk annuity sale this quarter. New business gains have not been recognized to date as the backing assets are still being finalized. Capital and Risk Solutions had a more mixed quarter. The business itself continues to grow nicely, including the expansion into newer markets with strong new business gains in quarter. However, in period, there were significant adverse claims experience in the P&C catastrophe line and in the U.S. life reinsurance line. The P&C experience impacted earnings by CAD 61 million, resulting from provisions for potential losses on Hurricane Ida and the extraordinarily severe German flooding. The higher U.S. life claims impacted earnings by CAD 71 million, which includes a provision for additional excess claims in the near term. These are primarily COVID related claims as the current wave has resulted in elevated infections and mortality rates in the U.S. However, compared to the U.S., mortality rates have been less impacted recently in the U.K. and Netherlands, and as a result, we did not see the offsets in the longevity business this quarter. Coming back up to the Lifeco level and looking at net earnings, the overall impact of excluded items is immaterial at CAD 2 million, and net EPS of CAD 0.94 mirrors the strength in base EPS. Net earnings were up 6% from Q3 2020, which included a CAD 94 million gain on the sale of Irish Progressive Services International unit, IPSI. Turning to slide 13. Here we can see the impact of the various excluded items which netted to CAD 2 million overall. Actuarial assumption changes and management actions were a positive CAD 69 million, and that incorporates or includes a negative impact of CAD 33 million from the actuarial standards change effective this quarter. In addition, greater clarity on property valuations in the U.K. led to the recognition of market value gains on U.K. property holdings, particularly the industrial sector, and this is reflected in the actuarial liabilities. The remaining excluded items this quarter were primarily transaction and integration costs related to last year's U.S. acquisitions, as well as a legacy cleanup item in the corporate segment. I would highlight the Personal Capital transaction costs. Recall an element of the purchase price was a contingent consideration payable in December this year and next, provided certain targets are achieved. Based on the strong performance of Personal Capital to date, we have increased the provision for this contingent consideration. Turn to slide 14 and 15. These next two slides highlight the source of earnings, first from a base earnings perspective and then a net earnings one. I'll focus my comments on slide 15, the net earnings perspective source of earnings, with a reminder that the amounts above the line are pre-tax. Expected profit was up 23% year-over-year, notwithstanding some currency pressure from U.S. dollars and euros. MassMutual and Personal Capital were not in Q3 2020, but added CAD 84 million this quarter. Even without that boost, we are seeing a 47% increase in the U.S. and a 12% expected profit increase overall, generally coming from organic business growth and fee income benefits from higher market levels. Canada, Europe and Capital and Risk Solutions were all up between 6% and 8% year-over-year. Moving to new business, Capital and Risk Solutions recorded an outsized new business gain this quarter, primarily on larger asset-based transactions which, similar to bulk annuities, recognize a portion of the investment gains up front. As we develop good visibility on the assets to back the portfolio, we realized gains this quarter, including some catch up on transactions written earlier this year. Notwithstanding the adverse claims experience in reinsurance, overall experience gains contributed positively in the quarter, and I'll cover these and actuarial basis changes on the next slide. Note that the U.K. property-related gains reflected in liabilities are excluded from base earnings, which accounts for the difference in experience gains between the base and net source of earnings displays. Earnings on surplus of CAD -18 million is down from CAD 8 million last year, primarily due to lower seed capital results at Putnam and increased financing costs and a reclassification in Canada. The effective tax rate on base shareholder earnings was 9.5%, and on net earnings was 8%, primarily reflecting the jurisdictional mix of earnings and also a CAD 26 million benefit from the release of certain tax provisions, including CAD 20 million between Putnam and Empower and CAD 6 million in corporate. Before the release of those provisions, the effective tax rate on base earnings was 12%. Turning to slide 16. These tables expand on the experience results as well as the management actions and changes in assumptions to highlight various items in the quarter, some of which we have touched on already. As shown in the chart on the left, yield enhancement continued to contribute positively, particularly in Canada and the U.K. this quarter. We continued to originate a steady volume of equity release mortgages in the U.K. on an improving residential property backdrop. The net impact of mortality, longevity and morbidity was modestly negative this period due to the combination of the COVID related claims in U.S. life reinsurance noted earlier and generally positive experience in the other areas, again reflecting the benefits of our diversified book of business. Credit related impacts were positive this quarter as our high quality investment portfolio continues to perform well, with minor ratings changes and a recovery in previously impaired assets leading to an experienced gain. The chart on the right details the major basis changes with a positive impact from changes in the economic assumptions used in liability modeling being partly offset by the actuarial standards change and an update to policyholder behavior assumptions in Canada. Moving to slide 17. This slide highlights operating expenses by segment. Expenses are up year-over-year as expected, given the increase in business both organically and through M&A. While there are a number of adjustments to consider, overall expense growth is well below the growth in expected profit as the company continues to apply disciplined expense management and benefits from leverage in market related fee income. Please turn to slide 18. The Q3 book value per share of CAD 24.40 was up 8% year-over-year, driven almost entirely by increased retained earnings given the solid results in each of the past four quarters. Currency movements in OCI have been a headwind with a strengthening Canadian dollar, but this has been largely offset by a pickup in pension OCI given the increase in interest rates this year. The LICAT ratio at Canada Life remains strong, although lower by three points compared to last quarter, primarily due to increased new business requirements on the large asset base transactions noted earlier. In addition, as noted in recent quarters, this also includes the continued phase in of the new most adverse LICAT scenario which impacted the ratio by one point. Lifeco cash ended the quarter at CAD 0.6 billion, which is down from CAD 0.9 billion at Q2 as a result of repaying the $500 million short term debt component of the MassMutual financing plan. That was within nine months of the close date, slightly ahead of schedule given the strong results to date. Just a reminder, Lifeco cash balance is not included in the LICAT ratio. Back to you, Paul. Thank you, Garry. Please turn to slide 19. As outlined in my opening remarks, amidst the many challenges that are shaping aspects of our world, we believe Great-West Lifeco is well positioned to adapt, respond and create value for stakeholders. We delivered a strong quarter with continuing momentum supported by solid operating fundamentals and the benefits of disciplined capital deployment. Looking ahead, we're confident in delivering on the financial expectations we've set for ourselves. We'll do this by focusing on and investing in our core priorities to drive value creation while being an active participant in defining and implementing a sustainable path forward for all stakeholders in the markets where we operate. With that concludes my formal remarks. Ariel, please open the line for questions. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. Our first question comes from Meny Grauman of Scotiabank. Please go ahead. Hi. Good afternoon. Just wanted to talk about excess capital and potential capital deployment, Paul. Just if you could update your thoughts on the dividend and then also, if you have, what you see as the capacity in terms of excess capital potentially for buybacks and your view on buybacks at this stage, given Prudential and everything that you've done so far. Okay. That's a fulsome question. I'll start off with the first question about our views on excess capital. You know, actually, I'll sort of start off at the top and say that we have deployed a significant amount of capital over the last 18 months, and I think we've deployed it quite effectively. You can see that in our strong results. I would say that if you think about, you know, in the U.S. with Empower, we've got our plate pretty full with the integrations over the coming quarters. We'll remain very laser focused on that. Having said that, we are not shy to continue looking at opportunities to strengthen the portfolio. You know, the reality is for the right opportunities, we're going to find ways to finance those. That's our mindset as we think about growth going forward. At this stage, as I think about dividends, clearly we have to wait and see what happens with the communication that's gonna presumably flow this afternoon with the communication from OSFI. With that in mind, we've always had a progressive dividend policy, and we would anticipate moving back to that. I think we have to actually, you know, wait and see what the lay of the land is as we hear from OSFI. Our intent would be, as I said, to get back into a progressive dividend policy. At this stage, we're very focused on thinking about how to create value through M&A and through extending our businesses. That would always be a priority from our perspective, versus buybacks. Got it. You have an active NCIB. Should we read anything into that? Based on your comments, not so much, but I'm just wondering about that. Yeah. No, no, I don't think you should read anything into that. Anything you would add, Garry? No, that's in place largely, you know, at a minimum, we would look to be removing the dilution from granted share options, and we've typically used it for that purpose. Obviously it gives us flexibility in other circumstances as they arise, but certainly wouldn't read anything into us just keeping that open. Sounds good. Thank you very much. Our next question comes from Gabriel Dechaine of National Bank Financial. Please go ahead. Hey, good morning. Got the cutoff here before noon, so I can still say that. First question is on your yield enhancement gains. Year- to- date, just under CAD 200 million pre-tax. Very simple question. Does that number look the same under IFRS 17 or is it lower? I'm still not quite sure. I've gone back and forth with a few companies. It sounds to me like it might be lower because it's no longer recognized upfront and it's amortized. Curious to hear what you have to say. Thank you very much for the question, Gabriel, and I'll turn that one right over to Garry. Sure. Yeah, I would expect all else being equal, Gabriel, it will be somewhat lower. It doesn't disappear, but it will be somewhat lower. That will ultimately depend, you know, in our situation, the various accounting policies and all the different blocks of business. There will be, it'd be a little lower in the short term. Obviously, you get the benefit, the economic benefit from yield enhancement will show up. Some of the cases, it will be feathered into earnings or amortized into earnings over time, but some will continue to end up being upfront through the discount rate mechanism in IFRS 17. A bit of a mix. Yeah. Go ahead. Go ahead, Gabriel. You go ahead. Oh, just trying to get a sense here. Is that number affected, like on a pro forma, on an IFRS 9 basis, 17, sorry, basis, based on the duration of the asset? You take cash, you put it into a riskier asset. If it's a five-year asset or a 10-year asset, you divide instead of present valuing it in year one, you would spread that gain over a five or 10-year period. That type of concept, is that how it works? I think, Gabriel, this might be one worth following. We do plan to have, as obviously as IFRS 17 approaches, a lot more discussion about how the various mechanisms will work. Just the high level answer is that there'll be some adjustment to the yield enhancement, but there's a lot of moving parts with the CSM and all that to be considered. I wouldn't want to draw conclusions just looking at one component. I think that's probably the transition over. Okay. Paul, you were. I cut you off. No, no. I just wanted to say, you know, underlying this, as Garry said, the economics of the business will remain very active. We're, you know, we like the way we're strengthening the business through yield enhancement, through considering alternative assets, through leveraging things like our equity release mortgages. We see all of that ultimately driving value creation. There's gonna be obviously some timing differences there, but we don't see it as being a significant impact. I do think the key is to unpack that a bit through some education sessions. Right. And while another thing that might arrive in 2023 is the Global Minimum Tax. I asked about it last quarter. I got to ask if you have any additional thoughts on the impact. I see, you know, year- to- date, and again, this quarter, sub 10% tax rate. I looked over the past five years, 13 out of 20 quarters where your tax rate is below 15%. Is this something that's becoming maybe more pressing issue as far as how you're structuring your business? I guess I'd start off by saying that we don't have full clarity and insight into what the global minimum tax will look like. I think it's too early in the process to you know start drawing direct conclusions. I would say though that if you were to look at our normalized tax rate this quarter and I think Garry quoted that that it was in the low teens. That's a function of our mix of business. Obviously in any quarter we're going to have various provisions that occur that would move that up and down. As we think about the business going forward though the reality is we're seeing high growth in our business in some higher tax jurisdictions like in Empower business for example. As we think about the you know overall impact of this, you know, it's not something that's really concerning us. More importantly, as we look out ahead, we don't see it having an impact on the guidance we provided regarding our EPS growth expectations. We kind of look at it from that context and recognizing the growth we're going to see in the U.S. in particular. Okay. You don't see that affecting the 8%-10% target? No, we don't. Thank you for that. Our next question comes from Doug Young of Desjardins Capital. Please go ahead. I'll be the first to say good afternoon then. We mentioned that the CRS division had adverse mortality claims experienced in the quarter was CAD 71 million. I assume that's after tax. I'm hoping maybe Arshil, you can flesh that out a little bit. I know you've talked a little bit about flexing that business in times when, you know, pricing is attractive and contracting it when it's not. Just want to get a sense of, first off, what are you seeing so far in Q4? Should we expect that to kind of continue to linger the COVID death claims? And how are you thinking about this business? Then I just have a follow-up on that. Okay, it's Paul. I'm going to start off just talking at a high level about CRS, whereas we look at that business, we like its diversification across a range of different risk classes. I think it fits really well within our portfolio. It you know there's significant expertise we draw on, the same expertise that all of our customer base draws on. You know, we recognize that there can be some volatility in things like P&C cat claims. Those will occur over longer cycles, and we do view that business as ultimately profitable. The other thing we like about that aspect of it is the risks are actually uncorrelated with life, you know, broader Life Co. risks. Overall, we're comfortable with the risk profile, and we're actually comfortable with viewing it as a continuing, you know, element of a growth strategy across Lifeco. I'll let Arshil comment on the specifics of thinking about it, looking at it going forward. Arshil? Before digging into the numbers in the quarter, I just wanted to give you a little bit of perspective, sort of looking both through 2020 and across 2021. Within the CRS segment, we have both longevity exposures, primarily in the U.K. and in the Netherlands, and then the mortality exposure, which is largely in the U.S. Cumulatively over the two years, the favorable impact of excess deaths on the longevity book continues to be a little bit higher than the cumulative impact on the mortality book, but we did not see that offset this quarter as we noted. We're very comfortable with the overall portfolio and the diversification between longevity and mortality. In the quarter, you noted the CAD 71 million after-tax variance Canadian dollars, and that was CAD 90 million pre-tax. CAD 90 million pre-tax, CAD 71 million after tax. Within that provision is an allowance about just over 1/3 of that for continuing excess claims into Q4. I'm not going to comment on our position in internal reporting through October or into November. We're engaged with our clients. We're monitoring all of the population level data in all of the jurisdictions that we're operating, and we're taking pricing action, where it makes sense for us or whatever, and being very cautious in underwriting new traditional mortality business, in the U.S. in this environment. That's really the context that I would provide. CAD 71 million after tax is CAD 90 million pre-tax in the quarter. Takes me to my follow-up, Garry. On page or slide 16, you have mortality, longevity, morbidity experience. It was CAD -22 million post-tax. This was obviously CAD 71 million. There's obviously some big positives that's on the other side of this negative. Can you maybe unpack that CAD -22 million? You know, this was a big negative of CAD 71 million. What were the big positive items? Yeah. Garry, why don't you take that? Sure. I think just on the positives, I think I mentioned earlier, Canada had a gain when you look across the life, disability and health claims in Canada, the health and dental. Again, you see it in some positives in the other jurisdictions in Europe. Most of that, the positives were pretty much split between the two. I think there'd be more positives in Canada. Again, that's partly good experience on the disability book. Some actual positive experience on the life book and the annuity book, you know, again, small positives, but they all went positive. Again, we're still seeing some underutilization on some of the health like the dental or the chiropractic and those type of claims in Canada. Similarly, we're seeing some underutilization on the health claims in Ireland this period. Yeah, it was pretty much spread across the group, and the other areas were positive. Garry, I would just add that it speaks to the diversification of the business. We're diversified by country. We're diversified by across mortality and morbidity. The other thing I would note, and Garry made reference to that, or Arshil made reference to the fact that we're actively managing this from the standpoint of pricing and underwriting and risk selection. We take a very, I would say, disciplined approach when it comes to underwriting and selection of risk, managing pricing, looking at these. You've seen us work our way out of past disability, group disability issues in Canada. We are active on this in exactly the same way, and we'll continue to have those disciplines. Okay. Just a quick numbers question. Garry, did I hear you say you had a tax benefit at Putnam of CAD 14 million, a CAD 6.1 million at Empower, and then CAD 26 million at corporate for a total of CAD 46 million? Is that? Did I get all those numbers right? Garry, why don't you pick it up? Just to clarify, it was CAD 6 million at corporate and then the CAD 14 million and the CAD 6 million that you've noted at Putnam and Empower respectively. CAD 26 million was the total. Oh, it's the total. Okay. Which is about 2.5% on the effective tax rate for base earnings. That's how it takes you from the 9.5% up to a 12% effective tax rate. Got it. Lastly, just to clarify on the LICAT being down sequentially, I was actually surprised, but did you move cash out of the op co up to the hold co? Or was this purely just a function of business growth? Where was that business growth? Was that related to the annuity business you wrote in Europe? Yeah. Garry? Sure. There was, you know, in terms of the dividends up, that I think the dividends were a little bit higher in Q3. I mean, obviously the earnings were also quite strong in Q3, but the dividends were a bit higher. That might have accounted for a small portion of it, but really was those large both the asset-based transactions in the reinsurance segments that drove the new business gains, plus also the bulk annuity in the U.K. Those large asset-based transactions added to the new business requirements. Again, they were profitable transactions, so we're quite happy to take the LICAT and earn a good return on that. I'm sorry. I'm gonna throw one quick one in here. You said that you did that GBP 1.3 billion bulk annuity, but you didn't finalize the assets, so we should assume there's gonna be a gain coming through when you finalize the assets. Is that... I'll start off at a high level. Obviously, as we, you know, lock in these sales, we're always looking for yield enhancement and improvement in the overall, you know, ALM matching and opportunities to enhance yield. We're not gonna project on that, but that is a discipline we have across our businesses, and we'll continue to have that discipline moving forward. Thank you. Our next question comes from Tom MacKinnon of BMO Capital Markets. Please go ahead. Yeah, thanks very much. Good afternoon. Just continuing on that CAD 1.3 billion bulk annuity deal. I understand your hesitancy to talk about potential yield enhancements, but my understanding is there's generally a new business gain associated with this. How should we be looking at the new business gain associated with that for the fourth quarter? And I have a follow-up. Yeah. Okay. Garry, I'll let you take that one. Sure. I think that the way I'd describe it is there's a, you know, provided we secure the right assets, there is an opportunity for a new business gain in the fourth quarter, but we have to finalize those assets. Often on the smaller deals, we've often got the assets lined up, and so you'll see a gain in the same period. In this case, given the size of the transaction, we wanted better visibility on those assets before declaring any gains that might come. I describe it as an opportunity in Q4 for us. Okay. Now the question with respect to Capital and Risk Solutions and the CAD 85 million impact in new business. I'm not really sure how we can really kind of model this because it's been like largely negative in 2020 and hasn't done anything so far in 2021. Was this related to this Japan reinsurance deal? And how should we think about the impact in new business with respect to Capital and Risk Solutions going forward? Like, obviously we're not expecting CAD 85 million one-time increase in that every quarter, but we're gonna need some help here in trying to figure out why that happens and how frequently it will happen, given the fact that historically we haven't seen anything like that in Capital and Risk Solutions before. Yeah. Tom, I'll start off, and then I'll pass it to Arshil. To start with, we have a very disciplined approach to, you know, selecting transactions that we fundamentally believe will drive value creation. Now, the reality is the profit signature of transactions can be quite different. You know, it's not like there's a single way of looking at all of these. This particular transaction had a profit signature and was of a scale where it had that level of impact. The reality is, you know, we can provide you with some insights into this particular transaction, but the reality is some transactions will have a bit of strain upfront, and then we'll have stronger releases in subsequent periods. I'll let Arshil give you a bit of context for that. Arshil. Paul, you're absolutely right. In the nature of the businesses that we have in CRS or whatever spans some businesses like the business that I'm just gonna talk about that generates potentially upfront gains when we write new business. Then we have other businesses from time to time that generate upfront losses. We really look at sort of the economic position and our return on capital over the life of the product. You will see sort of fluctuations in the impact of new business positive and negative, which is why we anchor most of our disclosure around expected profit growth. I think that's the forward-looking measure that I'd encourage you to look upon the most. Turning to these deals, I think we've highlighted through the discussions and in the MD&A that we've taken on two blocks of Japanese liabilities with upfront premiums. Cumulatively, we have just over CAD 4 billion of Japanese government yen that we've brought into the investment portfolio. We've been working really, really hard on the investment side to get into the flow so that we can get corporate bonds in yen denominated, both multinationals that issue in yen and domestic Japanese companies. Alongside that, we've also been ramping up our efforts to buy sterling and US dollar assets, corporate bonds, and swap them into yen with the appropriate collateral and cross-currency swap arrangements. Finally, we're thinking about introducing, in a very modest way, some illiquid assets into that portfolio. It's really getting all of those things up and running that's allowed us to have the confidence to book the new business gain on that whole set of transactions this quarter. That's really the color around that. If we get opportunities in the future to bring on lots of Japanese government bonds or other, you know, government securities and then deploy them using our investment management capabilities or whatever, then we will see other opportunities to add new business profits and/or yield enhancement gains. That's really what happened in this period around those liabilities in Japan. How much of it was a catch-up from prior quarters, and how much of the CAD 85 million actually happened in the quarter? It's almost impossible now to untangle because we're managing the two transactions together and looking at our total pool of yen liabilities or whatever. I wouldn't want to get into that or whatever. You know, the transaction that we did this quarter was about twice the size of the transaction that we did earlier. We've been sort of building our capabilities and then truing up all of the assumptions or whatever. Rough orders of magnitude, sort of 2/3 this quarter, 1/3 from earlier in the year. Oh, great. Isn't this more of an investment gain? Why is it classified as a new business gain? Shouldn't we be thinking more of an investment gain based on what you're trying to do with all swapping currencies and whatnot? It seems to me like it's more of an investment gain. Am I correct there, or how should I think of that? You're absolutely right. It is an investment gain. Then we get into a classification issue when we get investment gains on new business within 12 months of writing that contract and certainly within the same calendar year. It's been our practice to try to reflect some of that as new business gains, and you would have seen that on the annuity, on the bulk annuity side as well. As Garry indicated on some of the smaller bulk annuity transactions where we already have the assets in place, we'll often report a new business gain, but that's really driven by our investment performance and the difference between the discount rate on the liability side and the assumed rate on the asset portfolio. It's really hard to split to whatever new business gains and yield enhancement gains. Certainly within the first year, our bias is to reflect and call it new business gain. Okay, thanks very much for that. Our next question comes from Paul Holden of CIBC. Please go ahead. Thank you. Good afternoon. First question is related to ACMA and specifically the economic assumption updates. Just wondering if you can give us some color if that's related to a shift in asset allocation or if it's just simply a change in return assumption? Garry, do you want to take that? Sure. This is the economic assumptions one. As we were as part of our work on implementing the new actuarial standards, which included a review of the ultimate reinvestment rates, we also did a review of our overall provisions for reinvestment risk under various scenarios. We concluded from that review that our existing provisions were more prudent than required given the continued low interest rate environment. It's an area of excess strength on the balance sheet, and that's what led to the release this quarter. It's really just a broader review of reinvestment risk and provisions within our balance sheet rather than a specific assumption. I see. That's more likely to be a one-time type gain than something you can continue to drive going forward. Yeah, it would generally be that. Yeah, that's a good way to characterize it. Second question is with respect to LICAT and this interest rate scenario, which has been a negative drag on LICAT for a number of quarters now. Is there a way you can level set us to help determine where we might get an interest rate scenario switch back to a less adverse scenario? I'm just obviously asking because bond yields are starting to push higher, prospect of central bank tightening. Any kind of sense you can give us might be helpful. For sure. Garry, why don't you get to that one? Yeah, sure. Just to, again, just to level set, we've had this grading in of about a point a quarter for the last five quarters. All else being equal, you'd see that again in the fourth quarter. That said, you're right. With the rising rates, that's something that tends to be beneficial. The rates would have to go up still a fair bit from here. I don't have an exact number, but there's a fair bit of scope there. Also as another way you could see this change is if you're lengthening your portfolio and improving some of the matching on some of that business. As companies move towards IFRS 17, you might see companies, you know, looking at the duration of their portfolio given the new IFRS 17, and that, you know, could lead again to switching the scenario. There's rising rates, and your ALM strategies are probably the two biggest drivers I'd point to. Okay. Are you then suggesting as part of that answer that with the transition to IFRS 17, Great-West will be looking to extend the duration of its fixed income portfolio? I'll start off at a high level and say that as we look to IFRS 17, we're looking broadly across all of our assets and liability pools and thinking about optimizing the business moving forward. There'll be obviously a series of actions we'll take in preparation for that and as we transition. No specific guidance, though, on, you know, lengthening any particular portfolio backing liabilities. That's obviously one of the tools that we'll be considering as we transition. Got it. Got it. Okay, I'll leave it there. Thank you. Once again, if you have a question, please press star then one. Our next question comes from Nigel D'Souza of Veritas Investment Research. Please go ahead. Thank you. Good afternoon. I had a first quick question on your capital levels here and for your LICAT ratio. Could you share with us what your internal target range is? The reason I ask that is just to get a sense of what your excess capital is above what your internal target is so we can get a sense of what's actually available for deployment. Thanks, Nigel. Our current internal target range is from 110%- 120% LICAT, and we're currently operating above that level. As Garry noted, we've been carving in this LICAT scenario switch, and we'll have a sixth quarter. There's sort of a six-point point drag that's happened there. We've also been deploying a lot of capital both to drive, you know, ongoing future value creation, and that's our M&A transactions in the U.S. and other transactions like, you know, the Ark Life and ClaimSecure transactions. We've been very active in deploying capital. Then, you know, the other reality is we've been writing business. We've been growing organically and driving, you know, growth, things like this, these Japanese transactions and the bulk annuity transactions. The backdrop to the LICAT ratio having come down is positive in my mind. We've been deploying capital to drive shareholder value creation. I'll let Garry provide any other color you'd like to. Garry? I think you pretty much hit it on the head there, Paul. The target range of 110%-120%, and we like to operate towards the upper end of that target. Yeah. You know, the reality is as the scenario switch finishes out, as we transition into 2022, the natural growth in the business is gonna drive a natural growth in our LICAT ratio. As you know, we've provided some insight in and around our growth expectations. I think it sort of lends itself to us anticipating that growth in our LICAT ratio moving forward. Great. That makes sense. If I could switch to the dividend. When I— f rom what I understand, you don't have explicitly stated a payout ratio that you're targeting for the dividend. But when I look at your historical payout ratio, it has been as high as 70%, albeit that was during some repositioning on your U.S. business. It's currently at 50%, which is at the high end. How should we think about the dividend going forward? Is that something that you would consider increasing in the earnings growing to it, or is that a payout ratio you wanna see kind of move lower to a lower number before you kind of right-size that again? Thanks for that question. At a high level, we consider a range of factors as we look at our dividend. We're looking at the, you know, expected growth in EPS and growth in the business. We're looking at reinvestment opportunities in the business and the opportunity to grow both organically and inorganically. Fundamentally, taking all those things into account, we've generally had what I'd call a progressive dividend approach to dividends as we've increased the dividend as the business is growing and as we're growing our earnings. That would be the mindset we would take as we move forward. At this stage, we're not in the market, you know, with a published range. That's the mindset you should consider as we think about dividends going forward. I appreciate that. Thank you. This concludes the question and answer session. I would like to turn the conference back over to Mr. Mahon for any closing remarks. Thank you, Ariel, and thank you to all who participated in the call for listening in and participating. Please feel free to connect with our IR team on any follow-up questions. I would say that we look forward to reconnecting in February 2022 for our Q4 call, and I wish you all a safe, healthy, and happy holiday season. Take care. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.