TORONTO, Nov. 8, 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
$1,808.57 as at September 30,
2021, an increase of 7% from $1,684.93 as at December 31, 2020.
For the third quarter ended September 30, 2021, E-L
Financial reported consolidated shareholders' net income of
$168 million or $45.47 per common share compared to $201 million or $52.88 per common share in 2020. For the nine
months ended September 30, 2021, E-L Financial reported a
consolidated net income of $875
million or $238.84 per common
share in 2021 compared to a net loss of $10
million or $5.70 per common
share in 2020.
Other comprehensive loss ("OCL") was $3
million in the third quarter of 2021 compared to
$1 million in 2020. For the nine
months ended September 30, 2021, OCL was $33 million in 2021 compared to other
comprehensive income ("OCI") of $31
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 for the same period in
2020.
Today the Board of Directors of E-L Financial declared a
quarterly dividend of $2.50 per
Common Share payable on January 17,
2022.
E-L Corporate
E-L Corporate reported a net income of $135 million for the third quarter of 2021
compared to $150 million for the
third quarter of 2020. This included net gain on investments of
$134 million compared to $184 million in 2020. E-L Corporate's global
investment portfolio had pre-tax total return, including dividend
income of 2% for the third quarter of 2021 compared to 4% for the
third quarter of 2020.
E-L Corporate reported net income of $654
million for the first nine months of 2021 compared to a net
loss of $77 million for the
comparable period in 2020. The increase in earnings was primarily
due to a higher net gain on investments of $628 million in 2021 compared to a net loss of
$74 million in 2020. E-L Corporate's
global investment portfolio had a pre-tax total return, including
dividend income, of 12% in the first nine months of 2021 compared
to a pre-tax total return of nil in 2020. The global investment
portfolio has shown consistent growth throughout 2021; whereas
investment returns during 2020 were significantly impacted by the
international emergence and spread of COVID-19 which 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 $33 million in the third quarter of 2021 compared
to $51 million for the third
quarter of 2020. The decrease in third quarter earnings was
primarily due to lower net income from the Individual Insurance
line and unrealized and realized losses on assets in the Capital
& Surplus segment compared to gains for the same period in
2020.
Empire Life reported net income of $221
million for the first nine months of 2021 compared to
$67 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 150% at September 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
|
Third
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Contribution to
net income (loss)
|
|
|
|
|
|
E-L
Corporate1
|
$
|
135
|
$
|
150
|
|
$
|
654
|
$
|
(77)
|
Empire
Life2
|
33
|
51
|
|
221
|
67
|
Net income
(loss)
|
$
|
168
|
$
|
201
|
|
$
|
875
|
$
|
(10)
|
E-L
Corporate
|
Third
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Net gain (loss) on
investments3
|
$
|
134
|
$
|
184
|
|
$
|
628
|
$
|
(74)
|
Investment and other
income
|
29
|
30
|
|
102
|
96
|
Share of associates
income (loss)
|
23
|
6
|
|
142
|
(56)
|
|
186
|
220
|
|
872
|
(34)
|
|
|
|
|
|
|
Operating
expenses
|
12
|
10
|
|
37
|
29
|
Income
taxes
|
23
|
29
|
|
107
|
(5)
|
Non-controlling
interests
|
16
|
31
|
|
74
|
19
|
|
51
|
70
|
|
218
|
43
|
Net income
(loss)
|
$
|
135
|
$
|
150
|
|
$
|
654
|
$
|
(77)
|
Empire
Life
|
Third
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Net
premiums
|
$
|
227
|
$
|
221
|
|
$
|
675
|
$
|
639
|
Net (loss) gain on
investments3
|
(125)
|
37
|
|
(518)
|
439
|
Investment
income
|
80
|
82
|
|
244
|
244
|
Fee income
|
69
|
61
|
|
202
|
185
|
|
251
|
401
|
|
603
|
1,507
|
|
|
|
|
|
|
Benefits and
expenses
|
200
|
324
|
|
281
|
1,398
|
Income and other
taxes
|
15
|
22
|
|
87
|
32
|
Non-controlling and
participating policyholders' interests
|
3
|
4
|
|
14
|
10
|
|
218
|
350
|
|
382
|
1,440
|
Net
income
|
$
|
33
|
$
|
51
|
|
$
|
221
|
$
|
67
|
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)
|
Third
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
Expected profit on
in-force business
|
$
|
50
|
$
|
53
|
|
$
|
148
|
$
|
159
|
Impact of new
business
|
(9)
|
(3)
|
|
(16)
|
(14)
|
Experience (losses)
gains
|
(2)
|
(15)
|
|
144
|
(148)
|
Management actions
and changes in assumptions
|
2
|
16
|
|
17
|
40
|
Earnings on
operations before income taxes
|
41
|
50
|
|
293
|
37
|
Earnings on
surplus
|
4
|
23
|
|
7
|
62
|
Income
taxes
|
(10)
|
(19)
|
|
(72)
|
(21)
|
Non-controlling
interests(1)
|
(2)
|
(3)
|
|
(7)
|
(11)
|
Net
income
|
$
|
33
|
$
|
51
|
|
$
|
221
|
$
|
67
|
(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 September 30, 2021 Empire Life had total assets under
management of $19 billion.
SOURCE E-L Financial Corporation