E-L Financial Corporation Limited announces September 30, 2017 financial results

TORONTO, Nov. 7, 2017 /CNW/ - E-L Financial Corporation Limited ("E-L Financial") (TSX: ELF) (TSX: ELF.PR.F) (TSX: ELF.PR.G) (TSX: ELF.PR.H) today reported for the quarter ended September 30, 2017, consolidated shareholders' net income of $49.4 million or $11.60 per share compared with $191.3 million or $47.72 per share in 2016. For the nine months ended September 30, 2017, E-L Financial earned consolidated shareholders' net income of $411.0 million or $101.70 per share compared with $233.1 million or $56.38 per share in 2016.

E-L Financial's net equity value per Common Share was $1,242.85 at September 30, 2017, an increase of 7.2% from $1,159.26 as at December 31, 2016.

E-L Corporate

For the quarter ended September 30, E-L Corporate earned net income of $10.6 million in 2017 compared to $153.5 million in 2016. The decrease in net income is primarily due to E-L Corporate's net fair value losses on the global investment portfolio of $25.0 million compared to a net gain of $177.4 million in 2016. E-L Corporate's global investment portfolio for the third quarter of 2017 yielded a pre-tax total return of nil compared to 4% in the prior period. The nil return for the third quarter of 2017 is primarily attributable to the impact of the strengthening of the Canadian dollar on the global investment portfolio which offset total investment returns.

For the nine months ended September 30, E-L Corporate earned net income of $289.3 million in 2017 compared to $133.8 million in 2016. The increase in net income is due to E-L Corporate's net gain on investments of $287.1 million compared to $89.9 million in 2016. E-L Corporate's global investment portfolio was positively impacted by the performance of foreign equity markets with a year to date total return on the global investment portfolio of 8% compared to 3% in the prior year.

Empire Life

The Empire Life Insurance Company ("Empire Life") reported net income attributable to E-L Financial of $38.8 million in the third quarter of 2017 compared to $37.8 million for the comparable period in 2016. The increase in earnings for the third quarter of 2017 compared to 2016 is primarily as a result of improved operating results in the Employee Benefits product line and lower hedge costs, partially offset by lower gains in the Individual Insurance product line.

For the nine months ended September 30, 2017, Empire Life's net income attributable to E-L Financial was $121.7 million compared to $99.3 million for the comparable period in 2016. The increase in net income was primarily due to the above mentioned items and improved operating results in the Wealth Management product line.

Empire Life's assets under management (including segregated fund and mutual fund assets) increased 6% over September 30, 2016 levels to reach $16.8 billion.

Empire Life's Minimum Continuing Capital and Surplus Requirements ratio increased to 274.2% at September 30, 2017 compared to 248.3% at December 31, 2016. Growth in retained earnings and a $200 million debenture issue on September 15, 2017 strengthened the ratio for 2017.

CONSOLIDATED SUMMARY OF NET INCOME (UNAUDITED)

E-L Financial Consolidated	Third quarter					Year to date
(millions of dollars)	2017		2016			2017		2016
Contribution to net income
E-L Corporate^1	$	10.6	$	153.5		$	289.3	$	133.8
Empire Life^2	38.8		37.8			121.7		99.3
Net income	$	49.4	$	191.3		$	411.0	$	233.1

E-L Corporate	Third quarter					Year to date
(millions of dollars)	2017		2016			2017		2016
Revenue
Net (loss) gain on investments^3	$	(25.0)	$	177.4		$	287.1	$	89.9
Investment and other income	25.4		22.1			91.5		84.6
Share of associates income	9.4		16.9			22.3		19.2
	9.8		216.4			400.9		193.7
Expenses
Operating	6.4		6.0			20.0		18.1
Income taxes	1.2		28.3			54.7		23.9
Non-controlling interests	(8.4)		28.6			36.9		17.9
	(0.8)		62.9			111.6		59.9
Net income	$	10.6	$	153.5		$	289.3	$	133.8

Empire Life	Third quarter					Year to date
(millions of dollars)	2017		2016			2017		2016
Revenue
Net premiums	$	217.4	$	218.7		$	624.2	$	659.0
Net (loss) gain on investments^3	(214.9)		115.1			32.9		418.1
Investment and other income	69.8		60.0			204.0		186.2
Fee income	62.2		59.1			186.7		170.1
	134.5		452.9			1,047.8		1,433.4
Expenses
Benefits and expenses	78.0		392.2			875.6		1,280.8
Income and other taxes	17.0		18.4			50.0		47.3
Non-controlling and participating policyholders' interests	0.7		4.5			0.5		6.0
	95.7		415.1			926.1		1,334.1
Net income	$	38.8	$	37.8		$	121.7	$	99.3
^1 Net of non-controlling interests
^2 Net of non-controlling interests and participating policyholders' income (loss)
^3 Includes fair value change on FVTPL investments and realized gains on AFS investments

Non-GAAP Measures

The Company uses non-GAAP measures including net equity value per Common Share to provide investors with supplemental 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 assets under management to provide investors with a supplemental measure of Empire Life's 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 income from its investments.

Empire Life is a subsidiary of E-L Financial. Since 1923, Empire Life has provided competitive 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 investment, insurance and group benefits coverage they need to build wealth, generate income, and achieve financial security.

SOURCE E-L Financial Corporation Limited

Scott F. Ewert, Vice President and Chief Financial Officer, E-L Financial Corporation Limited, Telephone: [phone], Fax: [phone]