TORONTO, May 9, 2019 /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
$1,382.18 as at March 31, 2019,
an increase of 7% from $1,295.65
as at December 31, 2018.
For the first quarter ended March 31,
2019, E-L Financial earned a consolidated
shareholders' net income of $309
million, or $77.68 per common
share, compared with $66 million, or
$15.69 per common share in 2018.
E-L Corporate
E-L Corporate reported a net income of $266 million for the first quarter ended
March 31, 2019, compared to
$27 million for the comparable period
in 2018. The increase in net income is primarily due to higher net
gains on investments of $341 million
in the first quarter of 2019 compared to $22
million in 2018. E-L Corporate's global investment portfolio
had a pre-tax total return of 8% in 2019 compared to a pre-tax
total return of 1% in the prior year. Investments in Canada and the U.S. were the largest
contributors to the first quarter 2019 investment performance with
a positive pre-tax total return of approximately 11%.
Empire Life
For the first quarter ended March 31,
2019, the Empire Life segment reported net income of
$43 million compared to $39 million in 2018. The net income for 2019
increased primarily due to higher income from the Individual
Insurance, Wealth Management and Capital and Surplus segments,
partially offset by lower income from Employee Benefits. Higher net
income in the Wealth Management and Individual Insurance product
lines were partly due to improved equity markets. Individual
insurance also benefited from higher profits on new business,
partly offset by losses from declining interest rate yields and
unfavourable lapse experience. The Employee Benefits product line
had less favourable claims experience compared to the first quarter
of 2018.
Empire Life's Life Insurance Capital Adequacy Test ("LICAT")
total ratio was 150% at March 31, 2019 compared to 149% at
December 31, 2018, 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
|
First
quarter
|
|
(millions of
dollars)
|
2019
|
2018
|
|
|
|
|
Contribution to
net income
|
|
|
|
E-L
Corporate1
|
$
|
266
|
$
|
27
|
|
Empire
Life2
|
43
|
39
|
|
Net
income
|
$
|
309
|
$
|
66
|
|
E-L
Corporate
|
First
quarter
|
|
(millions of
dollars)
|
2019
|
2018
|
|
|
|
|
Revenue
|
|
|
|
Net gain on
investments3
|
$
|
341
|
$
|
22
|
|
Investment and other
income
|
30
|
25
|
|
Share of associates
income (loss)
|
3
|
(2)
|
|
374
|
45
|
|
|
|
|
Operating
expenses
|
9
|
9
|
|
Income
taxes
|
49
|
5
|
|
Non-controlling
interests
|
50
|
4
|
|
108
|
18
|
|
Net
income
|
$
|
266
|
$
|
27
|
|
Empire
Life
|
First
quarter
|
|
(millions of
dollars)
|
2019
|
2018
|
|
|
|
|
Revenue
|
|
|
|
Net
premiums
|
$
|
238
|
$
|
211
|
|
Net gain (loss) on
investments3
|
412
|
(80)
|
|
Investment and other
income
|
75
|
67
|
|
Fee income
|
64
|
66
|
|
789
|
264
|
|
|
|
|
Benefits and
expenses
|
728
|
207
|
|
Income and other
taxes
|
17
|
16
|
|
Non-controlling and
participating policyholders' interests
|
1
|
2
|
|
746
|
225
|
|
Net
income
|
$
|
43
|
$
|
39
|
|
1 Net of non-controlling
interests
|
|
2 Net
of non-controlling interests and participating
policyholders' net income (loss)
|
|
3 Includes fair value change on FVTPL
investments and realized gains on AFS investments
|
|
Empire Life's
Sources of Earnings
|
First
quarter
|
|
(millions of
dollars)
|
2019
|
2018
|
|
Expected profit on
in-force business
|
$
|
51
|
$
|
49
|
|
Impact of new
business
|
(2)
|
(4)
|
|
Experience
gains
|
4
|
4
|
|
Management actions
and changes in assumptions
|
(1)
|
—
|
|
Earnings on
operations before income taxes
|
52
|
50
|
|
Earnings on
surplus
|
8
|
5
|
|
Income
taxes
|
(14)
|
(12)
|
|
Non-controlling
interests
|
(3)
|
(4)
|
|
Net
income
|
$
|
43
|
$
|
39
|
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 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 March 31, 2019 Empire Life had total assets under
management of $18 billion.
SOURCE E-L Financial Corporation Limited