TORONTO, May 9, 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
$1,773.43 as at March 31, 2022,
compared to $1,884.08 as at
December 31, 2021.
For the first quarter ended March 31, 2022, E-L Financial
reported consolidated shareholder's net loss of $236 million or $66.52 per common share compared to net income of
$466 million or $127.90 per common share in 2021.
Consolidated comprehensive loss for the first quarter of 2022
was $322 million or $90.52 per common share compared to comprehensive
income $416 million or $114.05 per common share for 2021. Other
comprehensive loss ("OCL") was $86
million for the first quarter of 2022 compared to
$50 million in 2021. OCL increased in
the first quarter of 2022 primarily due to higher unrealized fair
value losses on Empire's available for sale investments resulting
from increases in interest rates and credit spreads during the
first quarter of 2022.
Today the Board of Directors of E-L Financial declared a
quarterly dividend of $2.50 per
common share payable on July 15,
2022.
E-L Corporate
E-L Corporate reported a net loss of $274
million for the first quarter of 2022 compared to net income
of $310 million for the comparable
period in 2021. The decrease in net income for the first quarter of
2022 is primarily due to a net loss on investments of $462 million compared to a net gain of
$230 million in 2021. E-L Corporate's
global investment portfolio had pre-tax total return, including
dividend income of negative 7% for the first quarter of 2022
compared to a pre-tax total return of positive 5% in the first
quarter of 2021.
Empire Life
The Empire Life segment reported net income of $38 million in the first quarter of 2022 compared
to $156 million for the first quarter
of 2021. The decrease in first quarter earnings was primarily a
result of a non-recurring release of segregated fund guarantee
related policy liabilities which occurred in the first quarter of
2021. Excluding the impact of the release of these policy
liabilities, net income in the first quarter of 2022 was lower
primarily due to the unfavourable market impact on capital and
surplus and lower net income from the Individual Insurance
line.
Empire Life's Life Insurance Capital Adequacy Test ("LICAT")
total ratio was 142% at March 31, 2022 compared to 144% at
December 31, 2021, 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)
|
2022
|
2021
|
|
|
|
Contribution to
net (loss) income
|
|
|
E-L
Corporate1
|
$
(274)
|
$
310
|
Empire
Life2
|
38
|
156
|
Net (loss)
income
|
$
(236)
|
$
466
|
E-L
Corporate
|
First
quarter
|
(millions of
dollars)
|
2022
|
2021
|
|
|
|
Revenue
|
|
|
Net (loss) gain on
investments3
|
$
(462)
|
$
230
|
Investment and other
income
|
26
|
40
|
Share of associates
income
|
3
|
106
|
|
(433)
|
376
|
|
|
|
Operating
expenses
|
10
|
11
|
Income
taxes
|
(59)
|
43
|
Non-controlling
interests
|
(110)
|
12
|
|
(159)
|
66
|
Net (loss)
income
|
$
(274)
|
$
310
|
Empire
Life
|
First
quarter
|
(millions of
dollars)
|
2022
|
2021
|
|
|
|
Revenue
|
|
|
Net
premiums
|
$
243
|
$
225
|
Net loss on
investments3
|
(790)
|
(636)
|
Investment
income
|
82
|
80
|
Fee income
|
69
|
66
|
|
(396)
|
(265)
|
|
|
|
Benefits and
expenses
|
(453)
|
(486)
|
Income and other
taxes
|
16
|
59
|
Non-controlling and
participating policyholders' interests
|
3
|
6
|
|
(434)
|
(421)
|
Net
income
|
$
38
|
$
156
|
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)
|
First
quarter
|
(millions of
dollars)
|
2022
|
2021
|
Expected profit on
in-force business
|
$
55
|
$
48
|
Impact of new
business
|
(2)
|
—
|
Experience gains
(losses)
|
(1)
|
150
|
Management actions
and changes in assumptions
|
1
|
9
|
Earnings on
operations before income taxes
|
52
|
208
|
Earnings on
surplus
|
—
|
6
|
Income
taxes
|
(11)
|
(54)
|
Non-controlling
interests(1)
|
(3)
|
(4)
|
Net
income
|
$
38
|
$
156
|
(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 build wealth, generate
income, and achieve financial security. As of March 31, 2022
Empire Life had total assets under management of $19 billion.
SOURCE E-L Financial Corporation