TORONTO, Aug. 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
$1,626.33 as at June 30, 2022,
compared to $1,884.08 as at
December 31, 2021.
For the second quarter ended June 30, 2022, E-L Financial
reported consolidated shareholder's net loss of $439 million or $123.75 per common share compared to net income
of $241 million or $65.47 per common share in 2021. For the six
months ended June 30, 2022, E-L Financial reported a
consolidated net loss of $675 million
or $190.07 per common share compared
to net income of $707 million or
$193.37 per common share in 2021.
Consolidated comprehensive loss was $524
million in the second quarter of 2022 or $147.44 per common share compared to
comprehensive income of $262 million
or $71.30 per common share for the
second quarter of 2021. Other comprehensive loss ("OCL") was
$85 million for the second quarter of
2022 compared to other comprehensive income ("OCI") of $21 million in 2021. OCL increased in the second
quarter of 2022 primarily due to higher unrealized fair value
losses on Empire's available for sale investments, partially offset
by a gain on the remeasurement of the post-employment defined
benefit plans. The loss on these components of OCL was primarily
due to increases in interest rates and credit spreads during the
second quarter of 2022.
Consolidated comprehensive loss for the first six months of 2022
was $846 million or $237.76 per common share compared to
comprehensive income of $678 million
or $185.35 per common share for 2021.
OCL was $171 million in 2022 compared
$29 million in 2021.
Today the Board of Directors of E-L Financial declared a
quarterly dividend of $2.50 per
common share payable on October 17,
2022.
E-L Corporate
E-L Corporate reported a net loss of $473
million for the second quarter of 2022 compared to net
income of $210 million for the
comparable period in 2021. The decrease in net income for the
second quarter of 2022 is primarily due to a net loss on
investments of $697 million compared
to a net gain of $264 million in
2021. E-L Corporate's global investment portfolio had pre-tax total
return, including dividend income of negative 12% for the second
quarter of 2022 compared to a pre-tax total return of positive 5%
in the second quarter of 2021. Global equity markets have been
negatively impacted by concerns around higher levels of inflation
and rising interest rates.
E-L Corporate reported a net loss of $747
million for the first six months of 2022 compared to net
income of $519 million for the
comparable period in 2021. The decrease in earnings was primarily
due to a net loss on investments of $1,159
million in 2022 compared to a net gain of $494 million in 2021. E-L Corporate's global
investment portfolio had a pre-tax total return, including dividend
income, of negative 19% in the first six months of 2022 compared to
a pre-tax total return of 9% in 2021.
Empire Life
The Empire Life segment reported net income of $34 million in the second quarter of 2022
compared to $31 million for the
second quarter of 2021. The increase in second quarter earnings was
primarily due to the favourable market impact of a positive yield
curve offset by poor equity market performance.
The Empire Life segment reported net income of $72 million for the first six months of 2022
compared to $188 million for the
comparable period in 2021. The decrease in year to date earnings
was primarily due to the non-recurring 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 139% at June 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 (LOSS) INCOME
(UNAUDITED)
E-L Financial
Consolidated
|
Second
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
Contribution to net
(loss) income
|
|
|
|
|
|
E-L
Corporate1
|
$
(473)
|
$
210
|
|
$
(747)
|
$
519
|
Empire
Life2
|
34
|
31
|
|
72
|
188
|
Net (loss)
income
|
(439)
|
241
|
|
(675)
|
707
|
Other comprehensive
(loss) income(2)
|
(85)
|
21
|
|
(171)
|
(29)
|
Comprehensive (loss)
income
|
$
(524)
|
$
262
|
|
$
(846)
|
$
678
|
E-L
Corporate
|
Second
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Net (loss) gain on
investments3
|
$
(697)
|
$
264
|
|
$
(1,159)
|
$
494
|
Investment and other
income
|
34
|
33
|
|
60
|
73
|
Share of associates
income
|
2
|
14
|
|
5
|
119
|
|
(661)
|
311
|
|
(1,094)
|
686
|
|
|
|
|
|
|
Operating
expenses
|
9
|
14
|
|
19
|
25
|
Income taxes
|
(86)
|
41
|
|
(145)
|
84
|
Non-controlling
interests
|
(111)
|
46
|
|
(221)
|
58
|
|
(188)
|
101
|
|
(347)
|
167
|
Net (loss)
income
|
(473)
|
210
|
|
(747)
|
519
|
Other comprehensive
income (loss)(2)
|
2
|
(3)
|
|
2
|
1
|
Comprehensive (loss)
income
|
$
(471)
|
$
207
|
|
$
(745)
|
$
520
|
Empire
Life
|
Second
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2022
|
2021
|
|
2022
|
2021
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Net premiums
|
$
244
|
$
223
|
|
$
487
|
$
448
|
Net (loss) gain on
investments3
|
(814)
|
243
|
|
(1,603)
|
(392)
|
Investment
income
|
84
|
85
|
|
167
|
164
|
Fee income
|
72
|
67
|
|
140
|
133
|
|
(414)
|
618
|
|
(809)
|
353
|
|
|
|
|
|
|
Benefits and
expenses
|
(462)
|
569
|
|
(913)
|
82
|
Income and other
taxes
|
13
|
13
|
|
29
|
72
|
Non-controlling and
participating policyholders' interests
|
1
|
5
|
|
3
|
11
|
|
(448)
|
587
|
|
(881)
|
165
|
Net
income
|
34
|
31
|
|
72
|
188
|
Other comprehensive
(loss) income, net of taxes(2)
|
(87)
|
24
|
|
(173)
|
(30)
|
Comprehensive (loss)
income
|
$
(53)
|
$
55
|
|
$
(101)
|
$
158
|
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)
|
Second
quarter
|
|
Year to
date
|
(millions of
dollars)
|
2022
|
2021
|
|
2022
|
2021
|
Expected profit on
in-force business
|
$
53
|
$
49
|
|
$
108
|
$
98
|
Impact of new
business
|
(1)
|
(6)
|
|
(4)
|
(7)
|
Experience (losses)
gains
|
(36)
|
(4)
|
|
(38)
|
146
|
Management actions and
changes in assumptions
|
17
|
5
|
|
18
|
15
|
Earnings on operations
before income taxes
|
33
|
43
|
|
84
|
252
|
Earnings (loss) on
surplus
|
11
|
(3)
|
|
11
|
3
|
Income taxes
|
(9)
|
(7)
|
|
(21)
|
(62)
|
Non-controlling
interests(1)
|
(1)
|
(2)
|
|
(2)
|
(5)
|
Net
income
|
$
34
|
$
31
|
|
$
72
|
$
188
|
(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 June 30, 2022
Empire Life had total assets under management of $17 billion.
SOURCE E-L Financial Corporation Limited