FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transaction period from to
Commission file number 333-1173
GWL&A FINANCIAL INC.
(Exact name of registrant as specified in its charter)
Delaware 84-1474245
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
Identification Number)
8515 East Orchard Road, Englewood, CO 80111
(Address of principal executive offices)
(Zip Code)
[303] 689-4128
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
As of March 31, 2000, 50,025 shares of the registrant's common stock were
outstanding, all of which were owned by the registrant's parent company.
<PAGE>
20
TABLE OF CONTENTS
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Page
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Part I FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
Item 2 Management's Discussion and Analysis of Financial 10
Condition and Results of Operations
Part II OTHER INFORMATION
Item 1 Legal Proceedings 18
Item 6 Exhibits and Reports on Form 8-K 18
Signatures 18
</TABLE>
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
GWL&A FINANCIAL INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands)
- --------------------------------------------------------------------------------
(Unaudited)
Three Months Ended
March 31,
----------------------
2000 1999
---------- ----------
REVENUES:
Premiums $ 352,735 $ 317,754
Fee income 211,634 154,036
Net investment income 230,400 216,119
Net realized gains (losses) on 1,337 (6,043)
investments
---------- ----------
796,106 681,866
---------- ----------
BENEFITS AND EXPENSES:
Life and other policy benefits 281,371 240,389
Increase in reserves 25,558 35,075
Interest paid or credited to 125,694 109,965
contractholders
Provision for policyholders'
share of
earnings on participating 2,278 1,452
business
Dividends to policyholders 22,631 21,893
---------- ----------
457,532 408,774
---------- ----------
---------- ----------
Commissions 46,420 45,034
Operating expenses 201,932 150,122
Premium taxes 8,749 7,138
---------- ----------
714,633 611,068
---------- ----------
INCOME BEFORE INCOME TAXES 81,473 70,798
PROVISION FOR INCOME TAXES:
Current 12,613 15,854
Deferred 16,144 9,534
---------- ----------
28,757 25,388
---------- ----------
NET INCOME $ 52,716 $ 45,410
========== ==========
See notes to consolidated financial statements.
GWL&A FINANCIAL INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
- --------------------------------------------------------------------------------
March 31, December
31,
ASSETS 2000 1999
- ------
------------ ------------
(Unaudited)
INVESTMENTS:
Fixed Maturities:
Held-to-maturity, at amortized cost
(fair value $2,201,573 and $2,238,581) $ 2,238,048 $ 2,260,581
Available-for-sale, at fair value
(amortized cost $7,083,939 and $6,953,383) 6,863,926 6,727,922
Mortgage loans on real estate, net 941,175 974,645
Common stock 91,690 69,240
Real estate, net 110,369 103,731
Policy loans 2,670,258 2,681,132
Short-term investments, available-for-sale
(cost approximates fair value) 122,136 243,709
------------ ------------
Total Investments 13,037,602 13,060,960
Cash 330,142 258,312
Reinsurance receivable 180,846 173,322
Deferred policy acquisition costs 267,445 282,295
Investment income due and accrued 145,468 137,810
Other assets 376,317 308,450
Premiums in course of collection 164,468 142,199
Deferred income taxes 240,145 253,323
Separate account assets 13,403,470 12,476,256
------------ ------------
TOTAL ASSETS $ 28,145,903 $ 27,092,927
============ ============
See notes to consolidated financial statements. (Continued)
GWL&A FINANCIAL INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
- --------------------------------------------------------------------------------
March 31, December
31,
LIABILITIES AND STOCKHOLDER'S EQUITY 2000 1999
- ------------------------------------
------------ ------------
(Unaudited)
POLICY BENEFIT LIABILITIES:
Policy reserves $ 11,604,570 $ 11,737,683
Policy and contract claims 588,135 391,968
Policyholders' funds 199,630 185,623
Provision for policyholders' dividends 71,131 70,726
GENERAL LIABILITIES:
Due to Parent Corporation 25,084 35,985
Repurchase agreements 80,579
Commercial paper 99,207
Other liabilities 657,624 638,495
Undistributed earnings on
participating business 133,719 130,638
Separate account liabilities 13,403,470 12,476,256
------------ ------------
Total Liabilities 26,782,570 25,747,953
------------ ------------
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN THE 175,000 175,000
COMPANY'S JUNIOR SUBORDINATED DEBENTURES
STOCKHOLDER'S EQUITY:
Preferred stock, $1 par value, 50,000,000
shares authorized;
0 shares issued and outstanding
Preferred stock, $0 par value, 500,000 shares
authorized;
0 shares issued and outstanding
Common stock, $0 par value; 500,000 shares
authorized;
50,025 shares issued and outstanding 250 250
Additional paid-in capital 707,348 707,348
Accumulated other comprehensive loss (88,817) (84,861)
Retained earnings 569,552 547,237
------------ ------------
Total Stockholder's Equity 1,188,333 1,169,974
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 28,145,903 $ 27,092,927
============ ============
See notes to consolidated financial statements.
GWL&A FINANCIAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
- --------------------------------------------------------------------------------
(Unaudited)
Three Months Ended
March 31,
-------------------------
2000 1999
----------- -----------
OPERATING ACTIVITIES:
Net income $ 52,716 $ 45,410
Adjustments to reconcile net income to
net cash provided by operating activities:
Gain allocated to participating policyholders 2,278 1,452
Amortization of investments (11,689) 820
Realized losses (gains) on disposal of
investments
and write-downs of mortgage loans and (1,337) 6,043
real estate
Amortization 10,472 8,065
Deferred income taxes 16,144 9,534
Changes in assets and liabilities:
Policy benefit liabilities 300,973 392,918
Reinsurance receivable (7,524) 12,924
Accrued interest and other receivables (29,927) (309)
Other, net (57,115) (86,024)
----------- -----------
Net cash provided by operating 274,991 390,833
activities
----------- -----------
INVESTING ACTIVITIES:
Proceeds from sales, maturities, and
redemptions of investments:
Fixed maturities
Held-to-maturity
Maturities and redemptions 116,500 190,330
Available-for-sale
Sales 451,242 1,205,592
Maturities and redemptions 232,994 204,750
Mortgage loans 36,738 46,148
Real estate 2,984
Common stock 5,813 3,842
Purchases of investments:
Fixed maturities
Held-to-maturity (91,902) (104,092)
Available-for-sale (688,190) (1,380,685)
Mortgage loans (463) (744)
Real estate (10,140) (6,399)
Common stock (22,437) (3,678)
----------- -----------
Net cash provided by investing 33,139 155,064
activities
----------- -----------
(Continued)
GWL&A FINANCIAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
- --------------------------------------------------------------------------------
(Unaudited)
Three Months Ended
March 31,
------------------------
2000 1999
----------- -----------
FINANCING ACTIVITIES:
Contract withdrawals, net of deposits $ (213,626) $ (280,456)
Net Parent Corporation borrowings (repayments) (10,901) (3,420)
Dividends paid (30,401) (20,750)
Net commercial paper borrowings (repayments) 99,207 (28)
Net repurchase agreements borrowings (repayments) (80,579) (175,287)
----------- -----------
Net cash used in financing activities (236,300) (479,941)
----------- -----------
NET INCREASE (DECREASE) IN CASH 71,830 65,956
CASH, BEGINNING OF YEAR 258,312 176,369
----------- -----------
CASH, END OF PERIOD $ 330,142 $ 242,325
=========== ===========
See notes to consolidated financial statements. (Concluded)
GWL&A FINANCIAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands)
- ------------------------------------------------------------------------------
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated financial statements and related notes of GWL&A Financial
Inc. (the Company) have been prepared in accordance with generally
accepted accounting principles applicable to interim financial reporting
and do not include all of the information and footnotes required for
complete financial statements. However, in the opinion of management,
these statements include all normal recurring adjustments necessary for a
fair presentation of the results. These financial statements should be
read in conjunction with the audited consolidated financial statements and
the accompanying notes included in the Company's latest annual report on
Form 10-K for the year ended December 31, 1999.
Operating results for the three months ended March 31, 2000 are not
necessarily indicative of the results that may be expected for the full
year ending December 31, 2000.
2. NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and for Hedging
Activities", which is required to be adopted in years beginning after June
15, 1999. This Statement provides a comprehensive and consistent standard
for the recognition and measurement of derivatives and hedging activities.
In June 1999, the Financial Accounting Standards Board issued Statement
No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133", which delays
the effective date of Statement No. 133 for one year, to fiscal years
beginning after June 15, 2000. Because of the Company's minimal use of
derivatives, management does not anticipate that the adoption of the new
Statement will have a significant effect on earnings or the financial
position of the Company.
3. OTHER
Effective January 1, 2000, the Great-West Life & Annuity Insurance Company
("GWL&A") coinsured the majority of General American Life Insurance
Company's ("General American") group life and health insurance business,
which primarily consists of administrative services only and stop loss
policies. The agreement is expected to convert to an assumption
reinsurance agreement by January 1, 2001, pending regulatory approval. The
Company assumed approximately $150,000 of policy reserves and
miscellaneous liabilities in exchange for an equal amount of cash and
miscellaneous assets from General American.
On October 6, 1999, GWL&A entered into an agreement with Allmerica
Financial Corporation ("Allmerica") to acquire Allmerica's group life and
health insurance business on March 1, 2000. This business primarily
consists of administrative services only and stop loss policies. The
in-force business is expected to be underwritten and retained by the
Company upon each policy renewal date. The purchase price is based on a
percentage of the premium and administrative fees in-force at March 1,
2000 and March 1, 2001.
GWL&A is involved in various legal proceedings that arise in the ordinary
course of its business. In the opinion of management, after consultation
with counsel, the resolution of these proceedings should not have a
material adverse effect on its financial position or results of
operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Operating Summary (Millions) Three Months Ended March 31,
----------------------------------
2000 1999
--------------- ----------------
Premiums $ 353 $ 318
Fee income 212 154
Net investment income 230 216
Realized investment gains (losses) 1 (6)
----------------------------------
Total revenues 796 682
Total benefits and expenses 714 611
Income tax expenses 29 26
--------------- ----------------
Net income $ 53 $ 45
=============== ================
Deposits for investment type 171 106
contracts
Deposits to separate accounts 661 670
Self-funded premium equivalents 1,188 718
March 31, December 31,
Balance Sheet (Millions) 2000 1999
--------------- ----------------
Investment assets $ 13,038 $ 13,061
Separate account assets 13,403 12,476
Total assets 28,145 27,093
Total policy benefit liabilities 12,463 12,386
Due to Parent Corporation 25 36
Guaranteed preferred beneficial
interests in the
Company's junior subordinated 175 175
debentures
Total stockholder's equity 1,188 1,170
GENERAL
The following discussion addresses the financial condition of the Company
as of March 31, 2000, compared with December 31, 1999, and its results of
operations for the quarter ended March 31, 2000, compared with the same
period last year. The discussion should be read in conjunction with the
Management's Discussion and Analysis section included in the Company's
report on Form 10-K for the year ended December 31, 1999 to which the
reader is directed for additional information.
CONSOLIDATED RESULTS
The Company's consolidated net income increased $8 million or 18% for the
first three months of 2000 when compared to the first three months of
1999. The increase reflects an increase of $6 million in the Financial
Services segment, which resulted primarily from higher fee income,
favorable individual life insurance mortality and realized gains on
investments. The Employee Benefits segment's net income increased $2
million in 2000, primarily due to favorable morbidity experience which
more than offset unfavorable mortality experience.
Total revenues increased $114 million or 17% for the first three months of
2000 when compared to the first three months of 1999. The growth in
revenues for the first three months of 2000 was comprised of increased
premium income of $35 million, increased fee income of $58 million,
increased net investment income of $14 million and increased realized
gains on investments of $7 million.
The increased premium income in 2000 was comprised of growth in Employee
Benefits premium income of $37 million offset by a decrease in Financial
Services premium income of $2 million. The growth in Employee Benefits
primarily reflects premium income of $43 million derived from the
acquisition of General American.
The growth in fee income is also primarily in the Employee Benefits
segment, where fee income derived from the acquisition of General American
was $31 million during the first quarter of 2000. Additionally, the
increase in fee income derived from the acquisition of Alta Health and
Life Insurance Company ("Alta") in June 1998 (formerly known as Anthem
Health & Life Insurance Company) was $9 million during the first quarter
of 2000. The remaining increase was the result of new sales and increased
fees on variable funds related to growth in equity markets.
The increase in net investment income was the result of higher interest
rates and a higher earned rate. The actual earned rate at March 31, 2000
was 7.10% compared to 7.01% at March 31, 1999.
Realized investment gains increased from a realized investment loss of $6
million in the first three months of 1999 to a realized investment gain of
$1 million in 2000. The rise in interest rates resulted in losses on sales
of fixed maturities totaling $2 million and $9 million for the first three
months of 2000 and 1999, respectively. Decreases in the provision for
asset losses of $2 million and $3 million were recognized for the first
three months of 2000 and 1999, respectively.
The benefits and expenses increased $103 million or 17% for the first
three months of 2000 when compared to the first three months of 1999. The
growth in benefits and expenses was primarily in the Employee Benefits
segment, which increased $89 million, of which $72 million related to
benefits and expenses generated by General American. The Financial
Services segment reflected an increase in benefits and expenses of $14
million.
Income tax expense increased $3 million or 12% for the first three months
of 2000 when compared to the first three months of 1999. The increase
reflects higher pre-tax earnings for the first three months of 2000.
In evaluating its results of operations, the Company also considers net
changes in deposits received for investment-type contracts, deposits to
separate accounts and self-funded equivalents. Self-funded equivalents
represent paid claims under minimum premium and administrative services
only contracts, which amounts approximate the additional premiums that
would have been earned under such contracts if they had been written as
traditional indemnity or HMO programs.
Deposits for investment-type contracts increased $65 million or 61% for
the first three months of 2000 when compared to the first three months of
1999. This increase is primarily attributable to the Financial Services
segment, where the Company has experienced growth in premium for fixed
annuity products due to higher interest crediting rates being offered to
customers and the volatility in the variable marketplace.
Deposits for separate accounts decreased $9 million or 1% for the first
three months of 2000 when compared to the first three months of 1999.
Self-funded premium equivalents increased $470 million or 65% for the
first three months of 2000 when compared to the first three months of
1999. The increase was due to the acquisition's of General American ($350
million) and Alta ($42 million), with the remainder coming from the growth
in business in the Employee Benefits segment.
Total assets increased $1 billion or 4% when compared to the year ended
December 31, 1999, which is attributable to the separate account business.
SEGMENT RESULTS
Employee Benefits
The following is a summary of certain financial data of the Employee
Benefits segment:
Operating Summary (Millions) Three Months Ended March 31,
-----------------------------------
2000 1999
---------------- ----------------
Premiums $ 302 $ 265
Fee income 183 134
Net investment income 23 19
Realized investment gains (losses) (2) (3)
-----------------------------------
Total revenues 506 415
Total benefits and expenses 465 376
Income tax expenses 14 14
---------------- ----------------
Net income $ 27 $ 25
================ ================
Deposits for investment type 15 - -
contracts
Deposits to separate accounts 464 494
Self-funded premium equivalents 1,188 718
Net income for Employee Benefits increased $2 million or 8% for the first
three months of 2000 when compared to the first three months of 1999.
401(k) premiums and deposits decreased 2% for the first three months of
2000 (from $516 million to $505 million). Assets under administration
(including third-party administration) in 401(k) increased 4% over the
first three months of 1999. The number of contributing participants
increased from 501,000 at December 31, 1999 to 514,000 at March 31, 2000.
Premiums, fee income and equivalent premiums for group life and health
increased 51% (from $1,094 million to $1,648 million) from the first three
months of 1999 primarily due to the acquisitions of General American and
Alta.
Financial Services
The following is a summary of certain financial data of the Financial
Services segment:
Operating Summary (Millions) Three Months Ended March 31,
-----------------------------------
2000 1999
---------------- ----------------
Premiums $ 51 $ 53
Fee income 29 20
Net investment income 207 197
Realized investment gains (losses) 3 (3)
-----------------------------------
Total revenues 290 267
Total benefits and expenses 249 235
Income tax expenses 15 12
---------------- ----------------
Net income $ 26 $ 20
================ ================
Deposits for investment type 156 106
contracts
Deposits to separate accounts 197 176
Net income for Financial Services increased $6 million or 30% for the
first three months of 2000 when compared to the first three months of
1999, due primarily to higher fee income, favorable individual life
mortality experience and realized gains on investments.
Savings
Savings premiums and deposits increased $98 million (from $246 million to
$344 million) or 40% for the first three months of 2000, which reflects
growth in deposits to separate accounts ($21 million) growth in deposits
to traditional fixed annuity products ($73 million).
The Financial Services segment's core savings business is in the
public/non-profit pension market. The assets of the public/non-profit
pension business, including separate accounts but excluding Guaranteed
Investment Contracts ("GICs"), increased 4% from December 31, 1999.
New contributions to variable business represented 45% of the total
deposits received in the first three months of 2000 compared to 64% for
the first three months of 1999.
Customer participation in guaranteed separate accounts decreased and
assets under management for guaranteed separate account funds were $647
million at March 31, 2000 compared to $654 at December 31, 1999.
Life Insurance
Individual life insurance revenue premiums and deposits of $88 million
decreased $21 million or 20% from the same period last year, which is
primarily due to a decrease in BOLI deposits of $26 million for the first
three months of 2000.
GENERAL ACCOUNT INVESTMENTS
The Company's primary investment objective is to acquire assets whose
durations and cash flows reflect the characteristics of the Company's
liabilities, while meeting industry, size, issuer and geographic
diversification standards. Formal liquidity and credit quality parameters
have also been established.
The Company follows rigorous procedures to control interest rate risk and
observes strict asset and liability matching guidelines. These guidelines
are designed to ensure that even in changing market conditions, the
Company's assets will meet the cash flow and income requirements of its
liabilities. Through dynamic modeling, using state-of-the-art software to
analyze the effects of a wide range of possible market changes upon
investments and policyholder benefits, the Company ensures that its
investment portfolio is appropriately structured to fulfill financial
obligations to its policyholders.
Fixed Maturities
Fixed maturity investments include public and privately placed corporate
bonds, public and privately placed structured assets and government bonds.
This latter category contains both asset-backed and mortgage-backed
securities, including collateralized mortgage obligations ("CMOs"). The
Company's strategy related to structured assets is to focus on those with
lower volatility and minimal credit risk. The Company does not invest in
higher risk CMOs such as interest-only and principal-only strips, and
currently has no plans to invest in such securities.
Private placement investments, which are primarily in the held-to-maturity
category, are generally less marketable than publicly traded assets, yet
they typically offer covenant protection which allows the Company, if
necessary, to take appropriate action to protect its investment. The
Company believes that the cost of the additional monitoring and analysis
required by private placements is more than offset by their enhanced
yield.
One of the Company's primary objectives is to ensure that its fixed
maturity portfolio is maintained at a high average quality, so as to limit
credit risk. If not externally rated, the securities are rated by the
Company on a basis intended to be similar to that of rating agencies.
The distribution of the fixed maturity portfolio (both available-for-sale
and held-to-maturity) by credit rating is summarized as follows:
March 31, December 31,
2000 1999
---------------- ----------------
AAA 50.1% 48.9%
AA 9.4% 8.9%
A 17.7% 19.6%
BBB 22.1% 22.3%
BB and Below (non-investment grade) 0.7% 0.3%
---------------- ----------------
TOTAL 100.0% 100.0%
During the first three months of 2000, net unrealized gains (losses) on
fixed maturities included in stockholders' equity, which is net of
policyholder-related amounts and deferred income taxes, decreased surplus
by $4 million.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operations have liquidity requirements that vary among the
principal product lines. Life insurance and pension plan reserves are
primarily long-term liabilities. Accident and health reserves, including
long-term disability, consist of both short-term and long-term
liabilities. Life insurance and pension plan reserve requirements are
usually stable and predictable, and are supported primarily by long-term,
fixed income investments. Accident and health claim demands are stable and
predictable but generally shorter term, requiring greater liquidity.
Generally, the Company has met its operating requirements by maintaining
appropriate levels of liquidity in its investment portfolio utilizing
positive cash flows from operations. Liquidity for the Company has
remained strong, as evidenced by significant amounts of short-term
investments and cash, which totaled $453 million and $502 million as of
March 31, 2000 and December 31, 1999, respectively.
Funds provided from premiums and fees, investment income and maturities of
investment assets are reasonably predictable and normally exceed liquidity
requirements for payment of claims, benefits and expenses. However, since
the timing of available funds cannot always be matched precisely to
commitments, imbalances may arise when demands for funds exceed those on
hand. Also, a demand for funds may arise as a result of the Company taking
advantage of current investment opportunities. The Company's capital
resources represent funds available for long-term business commitments and
primarily consist of retained earnings and proceeds from the issuance of
commercial paper and equity securities. Capital resources provide
protection for policyholders and the financial strength to support the
underwriting of insurance risks, and allow for continued business growth.
The amount of capital resources that may be needed is determined by the
Company's senior management and Board of Directors, as well as by
regulatory requirements. The allocation of resources to new long-term
business commitments is designed to achieve an attractive return, tempered
by considerations of risk and the need to support the Company's existing
business.
The Company's financial strength provides the capacity and flexibility to
enable it to raise funds in the capital markets through the issuance of
commercial paper. The Company continues to be well capitalized, with
sufficient borrowing capacity to meet the anticipated needs of its
business. The Company had $99 million of commercial paper outstanding at
March 31, 2000. There was no commercial paper outstanding at December 31,
1999. The commercial paper has been given a rating of A-1+ by Standard &
Poor's Corporation and a rating of P-1 by Moody's Investors Service, each
being the highest rating available.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or any of
its subsidiaries is a party or of which any of their property is the subject.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Index to Exhibits
Exhibit Number Title Page
---------------- ---------------------------- -------------
27 Financial Data Schedule 19
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the first quarter of 2000.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
GWL&A FINANCIAL INC.
DATE: May 15, 2000 BY: /s/ Glen R. Derback
------------ --------------------
Glen R. Derback, Vice President and Controller
(Duly authorized officer and chief accounting officer)
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
Exhibit 27 Financial Data Schedule
GWL&A Financial Inc. as of and for the period ended March 31, 2000 (000s)
- --------------------------------------------------------------------------------
</LEGEND>
<CIK> 0001070940
<NAME> GWL&A Financial Inc.
<MULTIPLIER> 1,000
<CURRENCY> us
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> dec-31-2000
<PERIOD-START> jan-01-2000
<PERIOD-END> mar-31-2000
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 6863926
<DEBT-CARRYING-VALUE> 2238048
<DEBT-MARKET-VALUE> 2201573
<EQUITIES> 91690
<MORTGAGE> 941175
<REAL-ESTATE> 0
<TOTAL-INVEST> 13037602
<CASH> 330142
<RECOVER-REINSURE> 180846
<DEFERRED-ACQUISITION> 267445
<TOTAL-ASSETS> 28145903
<POLICY-LOSSES> 12192705
<UNEARNED-PREMIUMS> 0
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<POLICY-HOLDER-FUNDS> 270761
<NOTES-PAYABLE> 99207
0
0
<COMMON> 250
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564369
<INVESTMENT-INCOME> 230400
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<INCOME-TAX> 81473
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<EPS-BASIC> 52716
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