TORONTO, March 3, 2022
/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
$1,884.08 as at December 31,
2021, compared to $1,684.93 as at
December 31, 2020.
For the year ended December 31, 2021, E-L Financial
reported consolidated shareholder's net income of $1,153 million or $314.67 per common share compared to $500 million or $128.21 per common share in 2020. For the fourth
quarter ended December 31, 2021, E-L Financial reported
consolidated shareholders' net income of $278 million or $75.82 per common share compared to $510 million or 136.42 per common share in
2020.
For the year ended December 31, 2021, consolidated
comprehensive income was $1,134
million or $309.54 per common
share compared to $532 million or
$136.75 per common share for 2020.
Other comprehensive loss was $19
million in 2021 compared to other comprehensive income
("OCI") of $32 million in 2020. For
the fourth quarter of 2021, OCI was $14
million compared to $1 million
in the fourth quarter of 2020. The movement in OCI during the year
and fourth quarter of 2021 was primarily due to changes in the
unrealized fair value gains on Empire's AFS investments and a
higher gain on re-measurement of post-employment benefit
liabilities.
"E-L Financial and Empire Life have surpassed our plans and
expectations with the 2021 financial results. Empire Life reported
a 2021 return on its common shareholder equity of 13.8% and E-L
Financial's 2021 growth in net equity value per common share,
including dividends, was 17.1%, both excellent results. Our
employees, management teams and directors are committed to our
strategy to accumulate shareholder value through long-term capital
appreciation. Although there will undoubtedly be industry and
market challenges ahead, we are optimistic that our business plans
and our companies are well prepared. Finally, I am happy to report
to you, that our Board of Directors today approved a special
additional cash dividend of $25.00
per Common Share which is in addition to the $2.50 quarterly Common Shareholder dividends
payable April 14, 2022," said
Duncan N.R. Jackman, Chairman,
President and CEO of E-L Financial.
E-L Corporate
For the year ended December 31, 2021, E-L Corporate
reported net income of $915 million
compared to $361 million in 2020. The
increase in earnings was primarily due to a higher net gain on
investments of $931 million in 2021
compared to $453 million in 2020. E-L
Corporate's global investment portfolio had a pre-tax total return,
including dividend income, of 18% in 2021 compared to a pre-tax
total return of 10% in the prior year. The global investment
portfolio has shown strong and consistent growth throughout 2021
and 2020.
E-L Corporate reported a net income of $261 million for the fourth quarter of 2021
compared to $438 million for the
comparable period in 2020. The decrease in net income for the
fourth quarter of 2021 is primarily due to a net lower gain on
investments of $303 million compared
to $527 million in 2020. E-L
Corporate's global investment portfolio had pre-tax total return,
including dividend income of 6% for the fourth quarter of 2021
compared to 10% in the fourth quarter of 2020.
Empire Life
Empire Life reported net income of $238
million for the year ended December 31, 2021 compared
to $139 million in 2020. Earnings
increased in 2021 primarily due to the release of segregated fund
guarantee reserves in the first quarter of 2021 and lower asset
trading gains.
The Empire Life segment reported net income of $17 million in the fourth quarter of 2021
compared to $72 million for the
fourth quarter of 2020. The decrease in fourth quarter earnings was
primarily due to the effect of assumption updates applied in the
Individual Insurance line which had an unfavourable impact on
fourth quarter earnings in 2021 compared to a gain in 2020.
Empire Life's Life Insurance Capital Adequacy Test ("LICAT")
total ratio was 144% at December 31, 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
(UNAUDITED)
E-L Financial
Consolidated
|
Fourth
quarter
|
|
Year
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Contribution to
net income
|
|
|
|
|
|
E-L
Corporate1
|
$
|
261
|
$
|
438
|
|
$
|
915
|
$
|
361
|
Empire
Life2
|
17
|
72
|
|
238
|
139
|
Net
income
|
$
|
278
|
$
|
510
|
|
$
|
1,153
|
$
|
500
|
E-L
Corporate
|
Fourth
quarter
|
|
Year
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Net gain on
investments3
|
$
|
303
|
$
|
527
|
|
$
|
931
|
$
|
453
|
Investment and other
income
|
33
|
34
|
|
134
|
130
|
Share of associates
income (loss)
|
15
|
27
|
|
158
|
(29)
|
|
351
|
588
|
|
1,223
|
554
|
|
|
|
|
|
|
Operating
expenses
|
12
|
12
|
|
49
|
42
|
Income
taxes
|
44
|
71
|
|
151
|
66
|
Non-controlling
interests
|
34
|
67
|
|
108
|
85
|
|
90
|
150
|
|
308
|
193
|
Net
income
|
$
|
261
|
$
|
438
|
|
$
|
915
|
$
|
361
|
Empire
Life
|
Fourth
quarter
|
|
Year
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Net
premiums
|
$
|
240
|
$
|
221
|
|
$
|
916
|
$
|
860
|
Net gain (loss) on
investments3
|
259
|
102
|
|
(259)
|
541
|
Investment
income
|
86
|
86
|
|
329
|
330
|
Fee income
|
70
|
66
|
|
273
|
251
|
|
655
|
475
|
|
1,259
|
1,982
|
|
|
|
|
|
|
Benefits and
expenses
|
635
|
363
|
|
917
|
1,762
|
Income and other
taxes
|
(4)
|
31
|
|
83
|
63
|
Non-controlling and
participating policyholders'
|
7
|
9
|
|
21
|
18
|
interests
|
|
638
|
403
|
|
1,021
|
1,843
|
Net
income
|
$
|
17
|
$
|
72
|
|
$
|
238
|
$
|
139
|
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)
|
Fourth
quarter
|
|
Year
|
(millions of
dollars)
|
2021
|
2020
|
|
2021
|
2020
|
Expected profit on
in-force business
|
$
|
51
|
$
|
55
|
|
$
|
199
|
$
|
215
|
Impact of new
business
|
(4)
|
(1)
|
|
(20)
|
(16)
|
Experience gains
(losses)
|
15
|
61
|
|
159
|
(81)
|
Management actions
and changes in assumptions
|
(55)
|
(22)
|
|
(38)
|
13
|
Earnings on
operations before income taxes
|
6
|
92
|
|
299
|
130
|
Earnings on
surplus
|
7
|
8
|
|
14
|
70
|
Income
taxes
|
5
|
(25)
|
|
(67)
|
(47)
|
Non-controlling
interests(1)
|
(1)
|
(3)
|
|
(8)
|
(14)
|
Net
income
|
$
|
17
|
$
|
72
|
|
$
|
238
|
$
|
139
|
(1) Including preference share
dividends
|
Non-GAAP Measures
The Company uses non-GAAP measures including net equity value
and growth in net equity value per common share to provide
investors with 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, assets under
management and return on common shareholders' equity to provide
investors with supplemental measures of Empire Life's operating
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 products and services they need to achieve financial security.
As of December 31, 2021 Empire Life had total assets under
management of $20 billion.
SOURCE E-L Financial Corporation