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Q3 2020 highlights (compared to Q3 2019)

  • Common shareholders’ net income of $51 million compared to $35 million
  • Earnings per share (basic and diluted) of $51.91 compared to $35.29 
  • Return on common shareholders’ equity1 (“ROE”) of 16.9% compared to 8.7% 

Q3 2020 year-to-date highlights (compared to YTD 2019)

  • Common shareholders’ net income of $67 million compared to $98 million
  • Earnings per share (basic and diluted) of $68.28 compared to $99.33 
  • Return on common shareholders’ equity1 (“ROE”) 5.8% compared to 8.4% 

(Kingston, ON – October 29, 2020) – The Empire Life Insurance Company (“Empire Life”) (TSX: EML.PR.A) today reported common shareholders’ net income of $51 million for the third quarter of 2020, compared to $35 million in 2019. Year-to-date common shareholders’ net income was $67 million compared to $98 million in 2019.

The increase in third quarter earnings was primarily a result of the favourable impact from changes in the investments supporting the Individual Insurance line, partially offset by increases in policy liabilities for segregated fund guarantees. 

“During the past six months we have focused on ensuring the continuity of service to our customers and protecting the safety of our employees. We are pleased that we have been able to maintain the earnings momentum that we experienced in the second quarter of this year. We continue to manage our assets prudently in a challenging low interest rate environment”, says Mark Sylvia, President and Chief Executive Officer. "Our investments in technology enable us to provide superior service to our customers while working remotely, and we continue to invest in the development of our digital platforms in order to make it simple, fast, and easy for our customers to access our products and services."

Financial highlights 

  Third quarter Year to date
(millions of dollars except per share amounts) 2020 2019 2020 2019
Common Shareholders' net income  $51 $35 $67 $98
Earnings per share - basic and diluted $51.91 $35.29 $68.28 $99.33
Return on shareholders' equity (quarterly annualized)1 16.9% 8.7% 5.8% 8.4%


Sources of Earnings1
  Third quarter Year to date

(millions of dollars)

2020 2019 2020 2019
Expected profit on in-force business $53 $46 $159 $143
Impact of new business (3) (13) (14) (21)
Experience gains (losses) (15) (1) (148) (11)
Management actions and changes in assumptions 16 (1) 40 (11)
Earnings on operations before income taxes 50 30 37 100
Earnings on surplus 23 18 62 38
Income before income tax $73 $49 $99 $138
Income taxes 19 11 21 30
Shareholders’ net income $55 $38 $77 $108
Dividends on preferred shares (3) (3) (10) (10)
Common shareholders' net income $51 $35 $67 $98

The expected profit on in-force business increased by 15% for the third quarter and by 12% on a year-to-date basis.

The impact of new business was lower in the third quarter of 2020 due to lower new business strain across all lines. Strain from the Individual Insurance line was positive in the third quarter compared to negative strain in the comparative period in 2019, and positive on a year-to-date basis compared to a positive amount in the comparative periods in 2019 primarily due to lower sales in 2020. The impact of new business on the Individual Insurance line is positive when the present value of future profits from the new business exceeds the sum of the margins in the initial policy liabilities for that business plus the expenses incurred at the point of sale. 

Experience losses increased for the third quarter and increased for the year to date in 2020 compared to the same periods in 2019, primarily due to significant strengthening of policy liabilities supporting segregated fund benefit guarantees. This was partially offset by improved asset liability trading gains, improved gains from increased yields on inforce assets backing the life insurance and annuity products and favourable claims experience in the Employee Benefits line.

Management actions and changes in assumptions were higher in the third quarter and year to date in 2020 relative to the same periods in 2019 primarily due to management’s ongoing activities to improve the matching of assets and liabilities in the Individual Insurance line. 

Earnings on surplus increased for the third quarter and year to date 2020 relative to 2019, primarily due to higher realized fair value gains on Available for Sale (AFS) bond assets in this segment.

Empire Life’s Life Insurance Capital Adequacy Test (LICAT) Total Ratio was 132% at September 30, 2020 compared to 155% at December 31, 2019, well above the requirements set by the Office of the Superintendent of Financial Institutions Canada (OSFI) as well as Empire Life’s minimum internal targets. 

Non-IFRS measures
Empire Life uses non-IFRS measures including return on common shareholders’ equity, source of earnings, assets under management, annualized premium sales, gross and net sales for mutual funds, segregated funds and fixed annuities 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. Empire Life also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers.

Additional information
All amounts are in Canadian dollars and are based on the unaudited consolidated financial results of Empire Life for the period ended September 30, 2020. Additional information about Empire Life can be found in Empire Life’s latest Management’s Discussion & Analysis and Annual Information Form. These documents are filed on Empire Life’s profile available at Empire Life’s Series 1 preferred shares are listed on the Toronto Stock Exchange as EML.PR.A (TSX: EML.PR.A). 

About Empire Life
Established in 1923, Empire Life is a subsidiary of E-L Financial Corporation Limited. The Company’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 September 30, 2020, Empire Life had total assets under management of $18.2 billion. Follow on Twitter @EmpireLife or visit for more information.  

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Contact:    Julie Tompkins                        
Vice-President, Corporate Services & Chief Communications Officer
613 548-1890, ext. 3301


1 See non-IFRS measures