Empire Life Announces December 31, 2015 Year-End Financial Results
(firmenpresse) - KINGSTON, ONTARIO -- (Marketwired) -- 02/25/16 -- The Empire Life Insurance Company ("Empire Life") (TSX: EML.PR.A) today reported fourth quarter shareholders' net income of $16.2 million for 2015, compared to $18.2 million for 2014. Full year shareholders' net income was $108.6 million compared to $98.7 million in 2014.
The following table provides a breakdown of the sources of earnings1 for the fourth quarter and year to date.
Fourth quarter shareholders' net income and ROE were lower relative to 2014 primarily due to lower profit from the Employee Benefits product line. The decreased profit from this product line primarily resulted from the 2014 favourable update of group life policy liability assumptions, which did not recur in 2015.
Full year shareholders' net income was higher relative to 2014 primarily due to growing profit on in- force Wealth Management business and increased earnings on surplus. Despite the higher net income, full year ROE was slightly lower in 2015 than 2014 due to a higher level of shareholders' equity in 2015.
The Wealth Management product line's improved result was due to the growth in segregated fund management fees and growth in segregated fund guarantee fees related to guaranteed minimum withdrawal benefit ("GMWB") products. Despite the recent drop in stock markets in 2015, many of Empire Life's segregated funds have performed well. The improvement in fee income relative to full year 2014 was due to positive segregated fund net sales (gross sales net of withdrawals) in the last 12 months, product price increases and the positive impact of the above mentioned segregated fund performance. Earnings on surplus improved primarily due to increased gains on the sale of bonds.
The impact of new business improved relative to 2014 primarily due to lower fourth quarter and full year segregated fund sales and lower Wealth Management expenses. Experience losses occurred in the full year 2015 primarily related to unfavourable surrender, lapse and mortality experience, which adversely affected the Individual Insurance product line. In 2014 full year experience gains were primarily due to the Wealth Management product line's favourable investment experience which resulted from market interest rate movements and the availability of assets at attractive yields for matching fixed interest annuity contract liabilities.
The loss from management actions in 2015 primarily resulted from an unfavourable update of policy liability assumptions for the Individual Insurance product line. This unfavourable update primarily related to lapse assumptions based on updated industry and company experience data. The full year gain from management actions in 2014 resulted from a favourable settlement on a lawsuit.
In addition, 2014 included a decrease in earnings resulting from other items due to increased premium tax rates in the province of Quebec on both in-force policies and new policies sold. Some in-force policies allow for an adjustment to prices or charges to cover the cost of the additional tax. However, some in-force policies are fully guaranteed and cannot be adjusted, which resulted in a strengthening of insurance contract liabilities of $7.3 million in 2014.
"I am very pleased with the strength of our 2015 Wealth Management net income, particularly given the economic environment." said Mark Sylvia, President and Chief Executive Officer of Empire Life.
"This more than offsets weaker Individual Insurance net income in 2015 resulting from policy liability assumption updates."
Other Results (compared to fourth quarter 2014 unless indicated otherwise)
Non-GAAP Measures
The Company uses non-GAAP measures including source of earnings, annualized premium sales, assets under management, mutual fund gross and net sales and segregated fund gross and net sales to provide investors with supplemental measures of its operating performance and to highlight trends in its core business that may not otherwise be apparent when relying solely on International Financial Reporting Standards financial measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers.
Additional Information
The information contained in this document concerning the fourth quarter of 2015 is based on the audited financial results of Empire Life for the period ended December 31, 2015. Additional information about Empire Life can be found in our long-form non-offering prospectus dated August 5, 2015, our short-form prospectus dated February 5, 2016 and our financial filings for the second and third quarter of 2015. These documents are filed with the Ontario Securities Commission and are available at .
About Empire Life
Empire Life is a subsidiary of E-L Financial Corporation Limited. Since 1923, Empire Life has provided individual and group life and health insurance, investment and retirement products to Canadians. The company's mission is to make it simple, fast and easy for Canadians to build wealth, generate income and get the insurance and group benefits coverage they need. As of December 31, 2015 Empire Life had total assets under management of $14.5 billion. Follow Empire Life on Twitter (at)EmpireLife or visit for more information.
(1 ) See non-GAAP Measures
Contacts:
Laurie Swinton
Director, Communication Services
613 548-1890, ext. 3374
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Datum: 25.02.2016 - 21:06 Uhr
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News-ID 453426
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