Q2 2024 highlights (compared to Q2 2023)
- Common shareholders' net income of $35
million (compared to net loss of $1
million)
- Earnings per share (basic and diluted) of $35.94 (compared to negative $0.86)
KINGSTON, ON, July 31,
2024 /CNW/ - Empire Life reported second quarter
common shareholders' net income of $35
million for 2024, compared to a net loss of $1 million for the second quarter of 2023. This
was due to improved Net insurance service result over the prior
year related to the Wealth Management product line, along with net
investment gains from non-fixed income assets in 2024 relative to
the first half of 2023.
"Our diverse product portfolio targeted to middle-income
Canadians continues to create shareholder value," said Mark Sylvia, President and Chief Executive
Officer. "We are pleased to be recognized by Morningstar DBRS with
an improved trend on our credit rating this quarter, while paying
an additional dividend to common shareholders and maintaining our
strong capital and liquidity position."
Financial highlights
|
Second
quarter
|
Year to
date
|
|
(in millions of dollars
except per share amounts)
|
2024
|
2023
|
2024
|
2023
|
|
Common shareholders'
net income (loss)
|
$
35
|
$
(1)
|
$
87
|
$
51
|
|
Earnings per share -
basic and diluted
|
$
35.94
|
$
(0.86)
|
$
88.80
|
$
51.80
|
|
|
|
|
|
|
|
Jun
30
|
Mar 31
|
Dec 31
|
Sep 30
|
Jun 30
|
|
Other Financial
Highlights
|
2024
|
2024
|
2023
|
2023
|
2023
|
|
Return on common
shareholders' equity(1)
|
12.7 %
|
10.4 %
|
10.5 %
|
3.9 %
|
6.6 %
|
|
LICAT total
ratio
|
152 %
|
157 %
|
155 %
|
152 %
|
151 %
|
|
(1)
|
See Non-GAAP
Measures section.
|
The following table provides a summary of Empire Life results
for the second quarter and year to date ended June 30, 2024 and 2023.
|
Second
quarter
|
Year to
date
|
|
(in millions of
dollars)
|
June 30,
2024
|
June 30,
2023
|
June 30,
2024
|
June 30,
2023
|
|
|
|
|
|
|
Insurance service
result
|
|
|
|
|
|
Insurance
revenue
|
$
351
|
$
328
|
$
690
|
$
653
|
|
Insurance service
expenses
|
(299)
|
(280)
|
(581)
|
(548)
|
|
Insurance service
result
|
52
|
48
|
109
|
105
|
|
Net recovery (expense)
from reinsurance contracts held
|
(9)
|
(18)
|
(28)
|
(31)
|
|
Net insurance
service result
|
43
|
30
|
81
|
74
|
|
|
|
|
|
|
Investment and
insurance finance result
|
|
|
|
|
|
Investment income
(loss), excluding segregated fund account balances
|
|
|
|
|
|
Investment
income
|
75
|
81
|
(21)
|
400
|
|
Change in investment
contracts(1)
|
(5)
|
1
|
(7)
|
(9)
|
|
Net investment
result, excluding segregated fund account balances
|
70
|
82
|
(28)
|
391
|
|
|
|
|
|
|
Insurance finance
income (expense), excluding segregated fund account
balances
|
|
|
|
|
|
Insurance
contracts
|
(44)
|
(85)
|
105
|
(339)
|
|
Reinsurance contracts
held
|
2
|
(3)
|
6
|
(12)
|
|
Net insurance
finance income (expense), excluding segregated fund account
balances
|
(42)
|
(88)
|
111
|
(351)
|
|
|
|
|
|
|
Segregated fund
account balances net investment and insurance finance
result
|
|
|
|
|
|
Investment income
(loss) on investments for segregated fund account
balances
|
17
|
72
|
459
|
353
|
|
Insurance finance
income (expenses) segregated fund account balances
|
(17)
|
(72)
|
(459)
|
(353)
|
|
Segregated fund
account balances net investment and insurance finance
result
|
—
|
—
|
—
|
—
|
|
Net investment and
insurance finance result
|
28
|
(6)
|
83
|
40
|
|
|
|
|
|
|
Other income and
expenses
|
|
|
|
|
|
Fee and other
income(1)
|
15
|
6
|
23
|
13
|
|
Non-insurance
expenses
|
(32)
|
(18)
|
(54)
|
(41)
|
|
Interest
expenses(1)
|
(4)
|
(4)
|
(8)
|
(9)
|
|
Total other income
and expenses
|
(21)
|
(16)
|
(39)
|
(37)
|
|
|
|
|
|
|
Net income (loss)
before taxes
|
50
|
8
|
125
|
77
|
|
Income
taxes(1)
|
(10)
|
(3)
|
(27)
|
(15)
|
|
Net income (loss)
after taxes
|
40
|
5
|
98
|
62
|
|
Less: net income (loss)
attributable to the participating account
|
2
|
3
|
5
|
5
|
|
Shareholders' net
income (loss)
|
38
|
2
|
93
|
57
|
|
Less: preferred share
dividends declared and distributions on other equity
instruments(1)
|
(3)
|
(3)
|
(6)
|
(6)
|
|
Common shareholders'
net income (loss)
|
$
35
|
$
(1)
|
$
87
|
$
51
|
|
(1) Prior
year amounts have been revised from those previously
presented.
|
Common shareholders' net income in the second quarter increased
$36 million compared to the second
quarter of 2023, driven by gains in the Company's Net investment
and insurance finance results, and positive Net insurance service
result.
Net insurance service result increased $13 million in the second quarter, compared to
the same period in 2023. Contributing factors include higher
insurance service revenue in the Wealth Management product line and
improved mortality experience in the Individual Insurance product
line relative to the prior period. These gains were slightly offset
by unfavourable long-term disability claims experience in the Group
Solutions product line.
Net investment and insurance finance result increased $34
million in the second quarter compared to the same period in 2023.
This was mainly due to net investment gains from non-fixed income
assets and interest rate movements in 2024 relative to the second
quarter in 2023.
Total other income and expenses was a net expense of
$21 million in the second quarter, a
$5 million increase compared to
$16 the same period in 2023. The
change is due to higher Non-insurance operating expenses which were
partially offset by gains in Fee and other income due to disposal
of Property and equipment.
The company's Life Insurance Capital Adequacy Test (LICAT) Total
ratio was 152% at June 30, 2024, well above the requirements
set by the Office of the Superintendent of Financial Institutions,
Canada (OSFI) as well as Empire
Life's minimum internal targets.
Non-GAAP measures
Empire Life uses non-generally
accepted accounting principles (non-GAAP) measures (including
return on common shareholders' equity, assets under management,
annualized premium sales, and gross and net sales for segregated
funds and fixed annuities) to provide investors with supplemental
measures of its operating performance and to highlight trends in
its core business that may not otherwise be apparent when relying
solely on measures prescribed by International Financial Reporting
Standards (IFRS Accounting Standards). Empire Life also believes
that securities analysts, investors and other interested parties
frequently use non-GAAP measures in the evaluation of
issuers. Further information on these non-GAAP measures can
be found in Empire Life's latest Management's Discussion &
Analysis (MD&A), filed on Empire Life's profile available at
www.sedarplus.ca.
Additional information
All amounts are in Canadian
dollars and are based on the consolidated financial results of
Empire Life for the period ended June 30, 2024. Additional
information about Empire Life can be found in Empire Life's latest
Management's Discussion & Analysis and Annual Information Form.
These documents are filed on Empire Life's profile available at
www.sedarplus.ca.
About Empire Life
Established in 1923 and a
subsidiary of E-L Financial Corporation Limited, Empire Life
provides individual and group life and health insurance, investment
and retirement products. The company's mission is to make it
simple, fast and easy for Canadians to get the products and
services they need to build wealth, generate income, and achieve
financial security. As of June 30, 2024, Empire Life had total
assets under management of $18.6
billion. Follow us on social media @EmpireLife or visit
www.empire.ca for more information.
SOURCE The Empire Life Insurance Company