TORONTO, Aug. 5, 2021
/CNW/ - E-L Financial Corporation Limited ("E-L Financial" or
the "Company") (TSX: ELF) (TSX: ELF.PR.F) (TSX: ELF.PR.G) (TSX:
ELF.PR.H) today reported a net equity value per common share of
$1,849.61 as at June 30, 2021,
an increase of 10% from $1,684.93 as
at December 31, 2020.
For the second quarter ended June 30, 2021, E-L Financial
reported consolidated shareholders' net income of $241 million or $65.47 per common share compared to $452 million or $119.36 per common share in 2020. For the six
months ended June 30, 2021, E-L Financial reported a
consolidated net income of $707
million or $193.37 per common
share for the first six months of 2021 compared to a net loss of
$211 million or $57.00 per common share in 2020.
Other comprehensive income ("OCI") was $21 million in the second quarter of 2021
compared to $48 million in 2020. For
the six months ended June 30, 2021, other comprehensive loss
("OCL") was $29 million in 2021
compared to OCI of $33 million in
2020. The decrease in OCI is primarily due to unrealized losses on
Empire's available for sale investments ("AFS") compared to a year
to date gain on for the same period in 2020. This was partially
offset by a gain on the remeasurement of the post-employment
defined benefit plans during 2021 compared to a loss in the prior
year.
Today the Board of Directors of E-L Financial declared a
quarterly dividend of $2.50 per
Common Share payable on October 15,
2021.
E-L Corporate
E-L Corporate reported a net income of $210 million for the second quarter of 2021
compared to $405 million for the
second quarter of 2020. The decrease in net income for the second
quarter of 2021 is primarily due to a net gain on investments of
$264 million compared to $510 million in 2020. The second quarter of 2020
experienced stronger investment returns reflecting the partial
recovery of global equity market losses experienced during the
first quarter of 2020. The pre-tax total return on E-L Corporate's
global investment portfolio for the second quarter of 2021 was 5%
compared to 12% in the prior year.
E-L Corporate reported net income of $519
million for the first six months of 2021 compared to a net
loss of $227 million for the
comparable period in 2020. The increase in earnings was primarily
due to a higher net gain on investments of $494 million in 2021 compared to a net loss of
$258 million in 2020. E-L Corporate's
global investment portfolio had a pre-tax total return, including
dividend income, of 9% in the first six months of 2021 compared to
a pre-tax total return of negative 4% in 2020. The international
emergence and spread of COVID-19 in 2020 resulted in a significant
decline in global stock markets in the first quarter of 2020.
Empire Life
The Empire Life segment reported net income of $31 million in the second quarter of 2021
compared to $47 million for the
second quarter of 2020. The decrease in second quarter earnings was
primarily due to less favourable claims results in the Employee
Benefits line and losses on assets classified as AFS in the Capital
& Surplus segment compared to gains for the same period in
2020.
Empire Life reported net income of $188
million for the first six months of 2021 compared to
$16 million for the comparable period
in 2020. The increase in year to date earnings was primarily due to
the release of segregated fund guarantee reserves in the first
quarter of 2021.
Empire Life's Life Insurance Capital Adequacy Test ("LICAT")
total ratio was 143% at June 30, 2021 compared to 136% at
December 31, 2020, well above the
requirements set by the Office of the Superintendent of Financial
Institutions Canada as well as Empire Life's minimum internal
targets.
CONSOLIDATED SUMMARY OF NET INCOME (LOSS)
(UNAUDITED)
E-L Financial
Consolidated
|
Second
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Contribution to
net income (loss)
|
|
|
|
|
|
E-L
Corporate1
|
$
|
210
|
$
|
405
|
|
$
|
519
|
$
|
(227)
|
Empire
Life2
|
31
|
47
|
|
188
|
16
|
Net income
(loss)
|
$
|
241
|
$
|
452
|
|
$
|
707
|
$
|
(211)
|
|
|
|
|
|
|
|
|
E-L
Corporate
|
Second
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Net gain (loss) on
investments3
|
$
|
264
|
$
|
510
|
|
$
|
494
|
$
|
(258)
|
Investment and other
income
|
33
|
37
|
|
73
|
66
|
Share of associates
income (loss)
|
14
|
29
|
|
119
|
(62)
|
|
311
|
576
|
|
686
|
(254)
|
|
|
|
|
|
|
Operating
expenses
|
14
|
10
|
|
25
|
19
|
Income
taxes
|
41
|
77
|
|
84
|
(34)
|
Non-controlling
interests
|
46
|
84
|
|
58
|
(12)
|
|
101
|
171
|
|
167
|
(27)
|
Net income
(loss)
|
$
|
210
|
$
|
405
|
|
$
|
519
|
$
|
(227)
|
|
|
|
|
|
|
|
|
Empire
Life
|
Second
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Net
premiums
|
$
|
223
|
$
|
202
|
|
$
|
448
|
$
|
417
|
Net gain (loss) on
investments3
|
243
|
763
|
|
(392)
|
404
|
Investment
income
|
85
|
82
|
|
164
|
163
|
Fee income
|
67
|
58
|
|
133
|
123
|
|
618
|
1,105
|
|
353
|
1,107
|
|
|
|
|
|
|
Benefits and
expenses
|
569
|
1,031
|
|
82
|
1,076
|
Income and other
taxes
|
13
|
20
|
|
72
|
10
|
Non-controlling and
participating policyholders' interests
|
5
|
7
|
|
11
|
5
|
|
587
|
1,058
|
|
165
|
1,091
|
Net
income
|
$
|
31
|
$
|
47
|
|
$
|
188
|
$
|
16
|
1
|
Net of
non-controlling interests
|
2
|
Net of
non-controlling interests and participating
policyholders' amounts
|
3
|
Includes fair value
change in fair value through profit or loss investments and
realized gain on available for sale investments
|
Empire Life's
Sources of Earnings
|
|
|
|
(Unaudited)
|
Second
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
Expected profit on
in-force business
|
$
|
49
|
$
|
51
|
|
$
|
98
|
$
|
107
|
Impact of new
business
|
(6)
|
(4)
|
|
(7)
|
(11)
|
Experience (losses)
gains
|
(4)
|
(5)
|
|
146
|
(133)
|
Management actions
and changes in assumptions
|
5
|
2
|
|
15
|
25
|
Earnings (losses) on
operations before income taxes
|
43
|
44
|
|
252
|
(13)
|
(Losses) earnings on
surplus
|
(3)
|
21
|
|
3
|
39
|
Income
taxes
|
(7)
|
(14)
|
|
(62)
|
(3)
|
Non-controlling
interests(1)
|
(2)
|
(4)
|
|
(5)
|
(7)
|
Net
income
|
$
|
31
|
$
|
47
|
|
$
|
188
|
$
|
16
|
(1) Including preference share
dividends
|
Non-GAAP Measures
The Company uses non-GAAP measures including net equity value
per common share to provide investors with supplemental measures of
its operating performance that may not otherwise be apparent when
relying solely on International Financial Reporting Standards
("IFRS") financial measures. Net equity value per common share
provides an indication of the accumulated shareholder value,
adjusting shareholders' equity to reflect investments in associates
at fair value, net of tax, as opposed to their carrying value.
The Company also uses sources of earnings and assets under
management to provide investors with supplemental measures of
Empire Life's performance and to highlight trends in its core
business that may not otherwise be apparent when relying solely on
IFRS financial measures. The Company also believes that securities
analysts, investors and other interested parties frequently use
non-GAAP measures in the evaluation of issuers.
About E-L Financial
E-L Financial operates as an investment and insurance holding
company. In managing its operations, E-L Financial distinguishes
between two operating segments, E-L Corporate and Empire Life.
E-L Corporate represents investments in stocks and fixed income
securities held directly and indirectly through pooled funds,
closed-end investment companies and other investment companies. The
investment strategy is to accumulate shareholder value through
long-term capital appreciation and dividend and interest income
from its investments.
Empire Life is a subsidiary of E-L Financial. Since 1923, Empire
Life has provided individual and group life and health insurance,
investment and retirement products to Canadians. Empire Life's
mission is to make it simple, fast and easy for Canadians to get
the investment, insurance and group benefits coverage they need to
build wealth, generate income, and achieve financial security. As
of June 30, 2021 Empire Life had total assets under management
of $19 billion.
SOURCE E-L Financial Corporation Limited