A.M. Best Affirms Great-West's Financial Strength and Debt Ratings.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 3, 2004

A.M. Best Co. has affirmed the financial strength ratings of A+ (Superior) of Great-West Life Assurance Company (GWL) (Winnipeg, Manitoba) and its wholly owned core subsidiaries, London Life Insurance Company and Canada Life Assurance Company (Canada Life) (both located in Ontario). A.M. Best has also affirmed the financial strength rating of A+ (Superior) of Great-West Life & Annuity Insurance Co. (GWL&A) (Greenwood Village, CO). Concurrently, A.M. Best has affirmed the ratings on all existing debt issued by the parent company, Great-West Lifeco Inc. (Great-West), and its subsidiaries. The outlook for all ratings is stable.

The rating affirmations are based on Great-West's very strong operating fundamentals, including excellent risk-adjusted capitalization and superior financial performance, significant scale advantages in core business lines and strong investment management capabilities. The ratings also consider Great-West's position as the largest life insurance company in Canada, with superior market positions in both the protection and wealth accumulation segments, which have been solidified by its acquisition of Canada Life. The combined distribution systems, along with a multi-brand platform, should serve as a major strength and competitive advantage. This important acquisition is currently accretive to earnings and is reflected in Great-West's strong increase in its year-end 2003 reported earnings. A.M. Best fully expects Great-West to continue to report strong operating results and to generate superior returns.

Offsetting factors include heightened leverage and significant goodwill resulting from acquisition activity and integration challenges associated with an organization the size and complexity of Canada Life, which raises uncertainty that planned cost savings will be fully realized. Moreover, Canada Life has a presence in a number of business segments where synergies are either minimal or non-existent. Accordingly, Great-West continues to evaluate businesses that are non-core and has recently announced its decision to sell Canada Life's U.S. group business.

In the United States, GWL&A is a significant player in the small- to medium-sized employee benefits market with considerable strength in the public and non-profit financial services sector. Its low cost administrative services platform and service capabilities enable expansion in its client base of self-funded plans, providing a stable source of earnings for Great-West.

While the Canada Life acquisition was financed principally through issuance of common stock and cash, the issuance of additional preferred shares, debentures and term financing has increased overall leverage, lowered coverage ratios and reduced Great-West's overall financial flexibility. However, Great-West has a very strong liquidity posture along with solid coverage ratios to service its debt obligations. Furthermore, Great-West's long-standing superior financial performance further enhances its debt service capabilities.

For a comprehensive list Great-West Lifeco Inc.'s financial strength, debt and HMO ratings, please visit www.ambest.com/press/020301greatwest.pdf.

For a complete list of A.M. Best's debt ratings, please visit http://www3.ambest.com/debtratings/.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.