TORONTO, May 6, 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
$1,787.15 as at March 31, 2021,
an increase of 6% from $1,684.93 as
at December 31, 2020.
For the first quarter ended March 31, 2021, E-L Financial
reported consolidated shareholders' net income of $466 million or $127.90 per common share compared to a net loss
of $663 million or $170.26 per common share in 2020.
Other comprehensive loss ("OCL") was $50
million in 2021 compared to $15
million in 2020. The increase in OCL was primarily due to
higher unrealized fair value losses on available for sale
investments, partially offset by a gain on the remeasurement of the
post-employment defined benefit plans. The loss on these components
was primarily due to increases in interest rates and declines in
credit spreads during the first quarter of 2021.
Today the Board of Directors of E-L Financial declared a
quarterly dividend of $2.50 per
Common Share payable on July 16,
2021. This represents an increase from the previous
quarterly dividend of $1.25 per
Common Share.
E-L Corporate
E-L Corporate reported a net income of $310 million for the first quarter of 2021
compared to a net loss of $632
million for the first quarter of 2020. The increase in
earnings was primarily due to a higher net gain on investments of
$230 million in 2021 compared to a
net loss of $769 million in 2020. E-L
Corporate's global investment portfolio had a pre-tax total return,
including dividend income, of 5% in 2021 compared to a pre-tax
total return of negative 14% for the first quarter of 2020. The
international emergence and spread of COVID-19 in 2020 resulted in
a significant decline in global stock markets in the first quarter
of 2020.
Empire Life
Empire Life reported net income of $156
million for the first quarter of 2021 compared to a net loss
of $31 million for the first quarter
of 2020. The increase in the first quarter was primarily a result
of a decrease in policy liabilities for segregated fund guarantees
due to favourable equity market and interest rate movements.
Empire Life's Life Insurance Capital Adequacy Test ("LICAT")
total ratio was 148% at March 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 (LOSS)
(UNAUDITED)
E-L Financial
Consolidated
|
First
quarter
|
(millions of
dollars)
|
2021
|
2020
|
|
|
|
Contribution to
net income (loss)
|
|
|
E-L
Corporate1
|
$
|
310
|
|
$
|
(632)
|
|
Empire
Life2
|
|
156
|
|
|
(31)
|
|
Net income
(loss)
|
$
|
466
|
|
$
|
(663)
|
|
E-L
Corporate
|
First
quarter
|
(millions of
dollars)
|
2021
|
2020
|
|
|
|
Revenue
|
|
|
Net gain (loss) on
investments3
|
$
|
230
|
|
$
|
(769)
|
|
Investment and other
income
|
40
|
|
29
|
|
Share of associates
income (loss)
|
106
|
|
(92)
|
|
|
376
|
|
(832)
|
|
|
|
|
Operating
expenses
|
11
|
|
7
|
|
Income
taxes
|
43
|
|
(111)
|
|
Non-controlling
interests
|
12
|
|
(96)
|
|
|
66
|
|
(200)
|
|
Net income
(loss)
|
$
|
310
|
|
$
|
(632)
|
|
Empire
Life
|
First
quarter
|
(millions of
dollars)
|
2021
|
2020
|
|
|
|
Revenue
|
|
|
Net
premiums
|
$
|
225
|
|
$
|
216
|
|
Net loss on
investments3
|
(636)
|
|
(360)
|
|
Investment
income
|
80
|
|
81
|
|
Fee income
|
66
|
|
65
|
|
|
(265)
|
|
2
|
|
|
|
|
Benefits and
expenses
|
(486)
|
|
45
|
|
Income and other
taxes
|
59
|
|
(10)
|
|
Non-controlling and
participating policyholders' interests
|
6
|
|
(2)
|
|
|
(421)
|
|
33
|
|
Net income
(loss)
|
$
|
156
|
|
$
|
(31)
|
|
1 Net of
non-controlling interests
|
2 Net
of non-controlling interests and participating
policyholders' amounts
|
Empire Life's
Sources of Earnings
|
|
(Unaudited)
|
First
quarter
|
(millions of
dollars)
|
2021
|
2020
|
Expected profit on
in-force business
|
$
|
48
|
|
$
|
55
|
|
Impact of new
business
|
—
|
|
(6)
|
|
Experience gains
(losses)
|
150
|
|
(128)
|
|
Management actions
and changes in assumptions
|
9
|
|
22
|
|
Earnings (loss) on
operations before income taxes
|
208
|
|
(57)
|
|
Earnings on
surplus
|
6
|
|
18
|
|
Income
taxes
|
(54)
|
|
11
|
|
Non-controlling
interests(1)
|
(4)
|
|
(3)
|
|
Net income
(loss)
|
$
|
156
|
|
$
|
(31)
|
|
(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 March 31, 2021 Empire Life had total assets under
management of $19 billion.
SOURCE E-L Financial Corporation