Great-West profit falls 38%

Great-West Lifeco (GWO-T), one of Canada's largest insurers, said its profit sunk 38 percent as it took a $225-million charge related to a class-action lawsuit.

The Winnipeg-based company earned a net $275 million, or 29 cents a share, down from $445 million, or 47 cents a share, in the year-before period.

On an operating basis, profit rose to $479 million, or 51 cents a share, Great-West said.  Analysts, on average, had expected earnings of 48 cents a share, according to Thomson Reuters I/B/E/S.

Premiums and deposits rose to $14.4 billion from $13.6 billion a year earlier.

An Ontario Superior Court said in an October 1 decision that the company must pay $456 million for breaches of the Insurance Companies Act, made as part of the 1997 takeover of London Insurance Group, the parent of London Life.

Great-West said it has appealed the ruling and established an incremental provision of $225 million in the third quarter.

Great-West sells insurance and investment products under the Great-West, Canada Life, London Life and Putnam Investments banners. It is 72-percent owned by Montreal holding company Power Financial.