TORONTO, March 6, 2018 /CNW/ - E-L Financial
Corporation Limited ("E-L Financial") (TSX: ELF) (TSX: ELF.PR.F)
(TSX: ELF.PR.G) (TSX: ELF.PR.H) today reported for the year ended
December 31, 2017, consolidated shareholders' net income of
$668.1 million or $166.17 per common share compared with
$333.1 million or $80.88 per common share in 2016. For the fourth
quarter of 2017, E-L Financial had consolidated net income of
$257.1 million or $64.47 per common share compared with
$100.1 million or $24.49 per common share in 2016.
E-L Financial's net equity value per common share was
$1,316.64 at December 31, 2017,
compared to $1,159.26 as at
December 31, 2016.
"Today I am pleased to report a record year end net equity value
per share of $1,316.64 as at
December 31, 2017, representing a total return of 14% for the
year. Our global equity portfolios continued to have strong
momentum through 2017 with double digit returns. During the first
quarter of 2017 investments were reallocated with the introduction
of two new investment managers. This has improved the
diversification of the global equity portfolio and contributed to
higher returns for 2017. Empire Life has delivered solid earnings
contributing $169.8 million to E-L
Financial shareholder net income, an increase of 12% over the prior
year. Empire Life continues to be well capitalized with the
completion of a subordinated debt issuance and E-L Financial's
investment in Empire Life Series 3 preferred shares, both completed
in the fall of 2017," Duncan N.R.
Jackman, Chairman, President and CEO of E-L Financial.
E-L Corporate
For the year ended December 31, 2017, E-L Corporate earned
net income of $498.3 million compared
to $181.6 million in 2016. The
increase in net income is primarily due to E-L Corporate's net gain
on investments of $544.5 million
compared to $155.8 million in 2016.
E-L Corporate's global investment portfolio was positively impacted
by strong equity markets returns as 2017 yielded a pre-tax total
return of 14% compared to 6% in the prior year.
E-L Corporate's fourth quarter 2017 net income was $209.0 million compared to $47.9 million in 2016. The increase in the net
gain on investments was due to both higher equity market returns
and foreign currencies strengthening against the Canadian dollar in
the fourth quarter of 2017. Income from associates earned
$13.6 million for the fourth quarter
of 2017 compared to a loss of $31.2
million in 2016. The 2016 results included an impairment
write down of $31.8 million related
to the Company's investment in Algoma.
Empire Life
For the year ended December 31, 2017, Empire Life's net
income attributable to E-L Financial was $169.8 million compared to $151.5 million for the comparable period in 2016.
The increase in net income was a result of continued growth in the
Wealth Management product line, improved performance of the
Employee Benefits product line and lower hedge costs partly offset
by lower gains in the Individual Insurance product line.
Empire Life's fourth quarter net income attributable to E-L
Financial was $48.1 million compared
to $52.2 million in 2016. The
decrease in income is mainly due to lower gains in the Individual
Insurance product line partly offset by improved operating
performance in the Wealth Management product line.
Empire Life's assets under management (including segregated fund
and mutual fund assets) increased 10% over December 31, 2016 levels to reach $17.6 billion.
Empire Life's Minimum Continuing Capital and Surplus
Requirements ratio increased to 282% at December 31, 2017
compared to 248% at December 31, 2016. The increase in the
MCCSR ratio in 2017 was primarily due to growth in retained
earnings, a $200 million debenture
issue and a $100 million preferred
share issue.
CONSOLIDATED SUMMARY OF NET INCOME (UNAUDITED)
|
E-L Financial
Consolidated
|
Fourth
quarter
|
|
Year
|
|
(millions of
dollars)
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
|
Contribution to net
income
|
|
|
|
|
|
|
E-L
Corporate1
|
$
|
209.0
|
$
|
47.9
|
|
$
|
498.3
|
$
|
181.6
|
|
Empire
Life2
|
48.1
|
52.2
|
|
169.8
|
151.5
|
|
Net income
|
$
|
257.1
|
$
|
100.1
|
|
$
|
668.1
|
$
|
333.1
|
|
E-L
Corporate
|
Fourth
quarter
|
|
Year
|
|
(millions of
dollars)
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
Net gain on
investments3
|
$
|
257.4
|
$
|
65.9
|
|
$
|
544.5
|
$
|
155.8
|
|
Investment and other
income
|
26.2
|
22.9
|
|
117.6
|
107.6
|
|
Share of associates
income (loss)
|
13.6
|
(31.2)
|
|
35.8
|
(12.1)
|
|
297.2
|
57.6
|
|
697.9
|
251.3
|
|
Expenses
|
|
|
|
|
|
|
Operating
|
8.7
|
7.2
|
|
28.5
|
25.4
|
|
Income
taxes
|
37.6
|
7.3
|
|
92.3
|
31.2
|
|
Non-controlling
interests
|
41.9
|
(4.8)
|
|
78.8
|
13.1
|
|
88.2
|
9.7
|
|
199.6
|
69.7
|
|
Net
income
|
$
|
209.0
|
$
|
47.9
|
|
$
|
498.3
|
$
|
181.6
|
|
Empire
Life
|
Fourth
quarter
|
|
Year
|
|
(millions of
dollars)
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
Net
premiums
|
$
|
210.0
|
$
|
222.5
|
|
$
|
834.2
|
$
|
881.5
|
|
Net gain (loss) on
investments3
|
269.5
|
(374.4)
|
|
302.4
|
43.7
|
|
Investment and other
income
|
77.2
|
68.7
|
|
281.2
|
254.9
|
|
Fee income
|
70.1
|
58.2
|
|
256.8
|
228.4
|
|
626.8
|
(25.0)
|
|
1,674.6
|
1,408.5
|
|
Expenses
|
|
|
|
|
|
|
Benefits and
expenses
|
552.8
|
(98.8)
|
|
1,428.4
|
1,182.1
|
|
Income and other
taxes
|
20.2
|
21.9
|
|
70.3
|
69.2
|
|
Non-controlling and
participating policyholders'
|
|
|
|
|
|
|
interests
|
5.7
|
(0.3)
|
|
6.1
|
5.7
|
|
578.7
|
(77.2)
|
|
1,504.8
|
1,257.0
|
|
Net
income
|
$
|
48.1
|
$
|
52.2
|
|
$
|
169.8
|
$
|
151.5
|
|
|
1 Net
of non-controlling interests
|
|
2 Net of
non-controlling interests and participating policyholders' income
(loss)
|
|
3 Includes
fair value change on FVTPL investments and realized gains on AFS
investments
|
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 assets under management to provide
investors with a supplemental measure 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 income from its
investments.
Empire Life is a subsidiary of E-L Financial. Since 1923, Empire
Life has provided competitive 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.
SOURCE E-L Financial Corporation Limited