Q4 2023 highlights (compared to restated Q4 2022)
- Common shareholders’ net income of $111 million (compared to restated net income of $5 million)
- Earnings per share (basic and diluted) of $112.15 (compared to restated $5.32)
2023 highlights (compared to restated 2022)
- Common shareholders' net income of $156 million (compared to restated net income of $55 million)
- Earnings per share (basic and diluted) of $158.70 (compared to restated $55.72)
(Kingston, ON – February 28, 2024) – The Empire Life Insurance Company (Empire Life) reported fourth quarter common shareholders’ net income of $111 million for 2023, compared to a restated net income of $5 million for the fourth quarter of 2022. Full year common shareholders’ net income was $156 million compared to a restated net income of $55 million in 2022. The increase in both the fourth quarter and full year compared to the prior year was primarily due to higher net investment and insurance finance results driven by a more favourable economic environment from interest rate movements and positive equity returns.
"During 2023, we focused on expanding our suite of investment solutions to provide our clients with choice and diversification opportunities. This included two growth-focused segregated funds to help Canadians achieve their financial goals,” said Mark Sylvia, President and Chief Executive Officer. “Additionally, the current market environment has resulted in sales trending toward our short-term investment products and has yielded positive investment results for the year.”
Financial highlights
|
Fourth quarter |
Year |
|||
|
(in millions of dollars except per share amounts) |
2023 |
2022 restated |
2023 |
2022 restated |
|
Common shareholders' net income (loss) |
$ 111 |
$5 |
$ 156 |
$55 |
|
Earnings per share - basic and diluted |
$ 112.15 |
$5.32 |
$ 158.70 |
$55.72 |
|
Dec 31 |
Sep 30 |
Jun 30 |
Mar 31 |
Dec 31 |
|
|
Other Financial Highlights |
2023 |
2023 |
2023 |
2023 |
2022 |
|
Return on common shareholders' equity(1) |
10.5 % |
3.9% |
6.6% |
4.4% |
4.0% |
|
LICAT total ratio(2) |
155 % |
152% |
151% |
152% |
138% |
(1) See Non-IFRS Measures section.
(2) Amounts prior to 2023 have not been adjusted for the impacts from the adoption of IFRS 17 and IFRS 9. For additional details on the 2022 amounts, please refer to Note 2.4 New and amended standards and interpretations in our Consolidated Financial Statements.
The following table provides a summary of Empire Life results for the three months and the year ended December 31, 2023 and 2022.
|
For the three months ended |
For the year ended |
|||
|
(in millions of dollars) |
Dec 31, 2023 |
Dec 31, 2022 Restated |
Dec 31, 2023 |
Dec 31, 2022 Restated |
|
Insurance service result |
||||
|
Insurance revenue |
$ 335 |
$323 |
$ 1,326 |
$1,255 |
|
Insurance service expenses |
(265) |
(247) |
(1,072) |
(1,018) |
|
Insurance service result |
70 |
76 |
254 |
237 |
|
Net recovery (expense) from reinsurance contracts held |
(22) |
(18) |
(73) |
(44) |
|
Net insurance service result |
48 |
58 |
181 |
193 |
|
Investment and insurance finance result |
||||
|
Investment income (loss), excluding segregated funds |
||||
|
Investment income |
963 |
— |
817 |
(1,664) |
|
Change in investment contracts |
(19) |
(4) |
(28) |
10 |
|
Net investment result, excluding segregated funds |
944 |
(4) |
789 |
(1,654) |
|
Insurance finance income (expense), excluding segregated fund account balances |
||||
|
Insurance contracts |
(752) |
(49) |
(613) |
1,485 |
|
Reinsurance contracts held |
(50) |
9 |
(40) |
83 |
|
Net insurance finance income (expense), excluding segregated funds |
(802) |
(40) |
(653) |
1,568 |
|
Segregated funds net investment and insurance finance result |
||||
|
Investment income (loss) on investments for segregated fund account balances |
539 |
518 |
736 |
(354) |
|
Insurance finance income (expenses) segregated fund account balances |
(539) |
(518) |
(736) |
354 |
|
Segregated funds net investment and insurance finance result |
— |
— |
— |
— |
|
Net investment and insurance finance result |
142 |
(44) |
136 |
(86) |
|
Other income and expenses |
||||
|
Fee and other income |
9 |
8 |
31 |
24 |
|
Non-insurance expenses |
(28) |
(19) |
(95) |
(62) |
|
Interest expenses |
2 |
3 |
(17) |
(12) |
|
Total other income and expenses |
(17) |
(8) |
(81) |
(50) |
|
Net income (loss) before taxes |
173 |
6 |
236 |
57 |
|
Income taxes |
(35) |
7 |
(46) |
2 |
|
Net income (loss) after taxes |
138 |
13 |
190 |
59 |
|
Less: net income (loss) attributable to the participating account |
20 |
1 |
22 |
(6) |
|
Shareholders' net income (loss) |
118 |
12 |
168 |
65 |
|
Less: preferred share dividends declared and distributions on other equity instruments |
(7) |
(7) |
(12) |
(10) |
|
Common shareholders' net income (loss) |
$ 111 |
$5 |
$ 156 |
$55 |
Empire Life reported fourth quarter common shareholders’ net income of $111 million for 2023, compared to net income of $5 million for the fourth quarter of 2022. The increase in fourth quarter compared to the prior year was primarily due to higher net investment and insurance finance results driven by a more favourable economic environment from interest rate movements and positive equity returns.
Net insurance service result decreased $10 million in the fourth quarter compared to the same period in 2022, primarily due to higher expenses in our Wealth Management product line.
Net investment and insurance finance result increased $186 million in the fourth quarter compared to the same period in 2022. This was mainly due to gains from equity market movements and favourable yield curve movements relative to the fourth quarter in 2022.
Total other income and expenses changed by $9 million in the fourth quarter compared to the same period in 2022 due to increased employee expenses and initiatives.
Full year common shareholders’ net income was $156 million compared to $55 million in 2022. The increase over prior year is primarily due to higher net investment and insurance finance results driven by a more favourable economic environment driven by interest rate movements and equity market returns.
Net insurance service result decreased $12 million in 2023 compared to the same period in 2022, primarily due to higher expenses in our Wealth Management product line, which was partially offset by favourable claims experience and insurance contract liability assumption updates in our Group Solutions product line.
Net investment and insurance finance result increased $222 million in 2023 compared to the same period in 2022. This was mainly due to gains from equity market movements relative to 2022. Net losses experienced in 2022 were driven by the impact from rising interest rates and credit spreads on our investments.
The year-over-year change in total other income and expenses of $31 million in 2023 compared to the same period in 2022 relates to higher employee expenses and project spend.
The company’s Life Insurance Capital Adequacy Test (LICAT) Total Ratio was 155% at December 31, 2023, 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, assets under management, annualized premium sales, gross and net sales for 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 consolidated financial results of Empire Life for the year ended December 31, 2023. 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 www.sedarplus.ca.
About Empire Life
Established in 1923 and a subsidiary of E-L Financial Corporation Limited, Empire Life provides individual and group life and health insurance, investment and retirement products. The company’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 December 31, 2023, Empire Life had total assets under management of $18.7 billion. Follow us on social media @EmpireLife or visit empire.ca for more information.
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Contact: Karen Smith
Director, Communication Services
613 548-1890, ext. 3387
karen.smith@empire.ca