TORONTO, Nov. 8, 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
$1,656.94 as at September 30,
2022, an increase of 2% compared to $1,626.33 as at June 30,
2022 and a decline of 12% compared to $1,884.08 as at December 31, 2021.
For the third quarter ended September 30, 2022, E-L
Financial reported consolidated shareholder's net income of
$39 million or $9.96 per common share compared to net income of
$168 million or $45.47 per common share in 2021. For the nine
months ended September 30, 2022, E-L Financial reported a
consolidated net loss of $635 million
or $180.64 per common share compared
to net income of $875 million or
$238.84 per common share in 2021.
Consolidated comprehensive income was $55
million in the third quarter of 2022 or $14.30 per common share compared to comprehensive
income of $165 million or
$44.48 per common share for the third
quarter of 2021. Other comprehensive income ("OCI") was
$16 million for the third quarter of
2022 compared to other comprehensive loss ("OCL") of $3 million in 2021.
Consolidated comprehensive loss for the first nine months of
2022 was $791 million or $224.13 per common share compared to
comprehensive income of $842 million
or $229.83 per common share for 2021.
OCL was $156 million in 2022 compared
$33 million in 2021. The increased
loss was primarily due to increases in interest rates and credit
spreads during the second quarter of 2022.
Today the Board of Directors of E-L Financial declared a
quarterly dividend of $2.50 per
common share payable on January 17,
2023, record December 30,
2022.
E-L Corporate
E-L Corporate reported a net loss of $5
million for the third quarter of 2022 compared to net income
of $135 million for the comparable
period in 2021. The decrease in net income for the third quarter of
2022 is primarily due to a net loss on investments of $60 million compared to a net gain of
$134 million in 2021. E-L Corporate's
global investment portfolio had pre-tax total return, including
dividend income of nil for the third quarter of 2022 compared to a
pre-tax total return of positive 2% in the third quarter of
2021.
E-L Corporate reported a net loss of $751
million for the first nine months of 2022 compared to net
income of $654 million for the
comparable period in 2021. The decrease in earnings was due to a
net loss on investments of $1,218
million in 2022 compared to a net gain of $628 million in 2021. E-L Corporate's global
investment portfolio had a pre-tax total return, including dividend
income, of negative 18% in the first nine months of 2022 compared
to a pre-tax total return of 12% in 2021. Global equity markets
have been negatively impacted by concerns around higher levels of
inflation and rising interest rates.
Empire Life
The Empire Life segment reported net income of $44 million in the third quarter of 2022 compared
to $33 million for the third quarter
of 2021. The increase in third quarter earnings was primarily a
result of market conditions; positive yield curve impacts partly
offset by poor equity market performance.
The Empire Life segment reported net income of $116 million for the first nine months of 2022
compared to $221 million for the
comparable period in 2021. The decrease in year to date earnings
was primarily due to the positive impact from the release of
segregated fund guarantee related policy liabilities which occurred
in the first quarter of 2021.
Empire Life's Life Insurance Capital Adequacy Test ("LICAT")
total ratio was 137% at September 30, 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 (LOSS)
(UNAUDITED)
|
E-L Financial
Consolidated
|
Third
quarter
|
|
Year to
date
|
|
(millions of
dollars)
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
|
Contribution to net
income (loss)
|
|
|
|
|
|
|
E-L
Corporate1
|
$
(5)
|
$
135
|
|
$
(751)
|
$
654
|
|
Empire
Life2
|
44
|
33
|
|
116
|
221
|
|
Net income
(loss)
|
39
|
168
|
|
(635)
|
875
|
|
Other comprehensive
income (loss)(2)
|
16
|
(3)
|
|
(156)
|
(33)
|
|
Comprehensive income
(loss)
|
$
55
|
$
165
|
|
$
(791)
|
$
842
|
|
E-L
Corporate
|
Third
quarter
|
|
Year to
date
|
|
(millions of
dollars)
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
Net (loss) gain on
investments3
|
$
(60)
|
$
134
|
|
$
(1,218)
|
$
628
|
|
Investment and other
income
|
33
|
29
|
|
93
|
102
|
|
Share of associates
income
|
30
|
23
|
|
35
|
142
|
|
3
|
186
|
|
(1,090)
|
872
|
|
|
|
|
|
|
|
Operating
expenses
|
9
|
12
|
|
27
|
37
|
|
Income taxes
|
—
|
23
|
|
(145)
|
107
|
|
Non-controlling
interests
|
(1)
|
16
|
|
(221)
|
74
|
|
8
|
51
|
|
(339)
|
218
|
|
Net (loss)
income
|
(5)
|
135
|
|
(751)
|
654
|
|
Other comprehensive
income(2)
|
6
|
5
|
|
7
|
4
|
|
Comprehensive income
(loss)
|
$
1
|
$
140
|
|
$
(744)
|
$
658
|
|
Empire
Life
|
Third
quarter
|
|
Year to
date
|
|
(millions of
dollars)
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
Net premiums
|
$
269
|
$
227
|
|
$
756
|
$
675
|
|
Net loss on
investments3
|
(57)
|
(125)
|
|
(1,661)
|
(518)
|
|
Investment
income
|
93
|
80
|
|
260
|
244
|
|
Fee income
|
75
|
69
|
|
216
|
202
|
|
380
|
251
|
|
(429)
|
603
|
|
|
|
|
|
|
|
Benefits and
expenses
|
314
|
200
|
|
(599)
|
281
|
|
Income and other
taxes
|
19
|
15
|
|
48
|
87
|
|
Non-controlling and
participating policyholders' interests
|
3
|
3
|
|
6
|
14
|
|
336
|
218
|
|
(545)
|
382
|
|
Net
income
|
44
|
33
|
|
116
|
221
|
|
Other comprehensive
income (loss), net of taxes(2)
|
10
|
(8)
|
|
(163)
|
(37)
|
|
Comprehensive income
(loss)
|
$
54
|
$
25
|
|
$
(47)
|
$
184
|
|
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)
|
Third
quarter
|
|
Year to
date
|
|
(millions of
dollars)
|
2022
|
2021
|
|
2022
|
2021
|
|
Expected profit on
in-force business
|
$
53
|
$
50
|
|
$
161
|
$
148
|
|
Impact of new
business
|
2
|
(9)
|
|
(2)
|
(16)
|
|
Experience (losses)
gains
|
(16)
|
(2)
|
|
(54)
|
144
|
|
Management actions and
changes in assumptions
|
37
|
3
|
|
55
|
17
|
|
Earnings on operations
before income taxes
|
76
|
42
|
|
160
|
293
|
|
(Losses) earnings on
surplus
|
(13)
|
4
|
|
(2)
|
8
|
|
Income taxes
|
(15)
|
(10)
|
|
(35)
|
(72)
|
|
Non-controlling
interests(1)
|
(4)
|
(3)
|
|
(7)
|
(8)
|
|
Net
income
|
$
44
|
$
33
|
|
$
116
|
$
221
|
|
(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 September 30,
2022 Empire Life had total assets under management of $17 billion.
SOURCE E-L Financial Corporation Limited