Q4 2024 highlights (compared to Q4 2023)
- Common shareholders' net income of $16 million (compared to net income of $111 million)
- Earnings per share (basic and diluted) of $21.95 (compared to $112.15)
2024 highlights (compared to 2023)
- Common shareholders' net income of $281 million (compared to net income of $156 million)
- Earnings per share (basic and diluted) of $284.77 (compared to $158.70)
KINGSTON, ON, Feb. 27, 2025 /CNW/ - The Empire Life Insurance Company (Empire Life) reported fourth quarter Common shareholders' net income of $16 million, a $95 million decrease compared to the fourth quarter of 2023, driven by substantial investment income in the fourth quarter of 2023 that did not reoccur in the same period in 2024. Common shareholders' net income of $281 million for the full year of 2024 represents an increase of $125 million over the prior year. The increase was driven by favourable Net investment and insurance finance results due to more favourable interest rate movements and the impacts of insurance contract liability assumption updates.
"Our strong year-end results reflect an ongoing commitment to provide expertise and intelligent solutions to help Canadians navigate life with confidence," says Mark Sylvia, President and Chief Executive Officer. "We're pleased with the early success of our new suite of segregated fund portfolios and the launch of the First Home Savings Account. As global economies change and shift in 2025, we remain focused on prudent capital management, innovation and service excellence to drive our continued success."
Financial highlights
Fourth Quarter |
Year to date |
|||
(in millions of dollars except per share amounts) |
2024 |
2023 |
2024 |
2023 |
Common shareholders' net income (loss) |
$ 16 |
$ 111 |
$ 281 |
$ 156 |
Earnings per share - basic and diluted |
$ 21.95 |
$ 112.15 |
$ 284.77 |
$ 158.70 |
Dec 31 |
Sep 30 |
Jun 30 |
Mar 31 |
Dec 31 |
|
Other Financial Highlights |
2024 |
2024 |
2024 |
2024 |
2023 |
Return on common shareholders' equity(1) |
17.4 % |
24.0 % |
12.7 % |
10.4 % |
10.5 % |
LICAT total ratio |
151 % |
154 % |
152 % |
157 % |
155 % |
(1) See Non-IFRS measures section. |
The following table provides a summary of Empire Life results for the fourth quarter and year to date ended December 31, 2024 and 2023.
Fourth Quarter |
Year to date |
|||
(in millions of dollars) |
December 31, 2024 |
December 31, 2023 |
December 31, 2024 |
December 31, 2023 |
Insurance service result |
||||
Insurance revenue |
$ 358 |
$ 335 |
$ 1,405 |
$ 1,326 |
Insurance service expenses |
(335) |
(265) |
(1,187) |
(1,072) |
Insurance service result |
23 |
70 |
218 |
254 |
Net recovery (expense) from reinsurance contracts held |
10 |
(22) |
(42) |
(73) |
Net insurance service result |
33 |
48 |
176 |
181 |
Investment and insurance finance result |
||||
Investment income (loss), excluding segregated fund account balances |
||||
Investment income |
38 |
963 |
518 |
817 |
Change in investment contracts |
(4) |
(19) |
(29) |
(28) |
Net investment result, excluding segregated fund account balances |
34 |
944 |
489 |
789 |
Insurance finance income (expense), excluding segregated fund account balances |
||||
Insurance contracts |
(32) |
(752) |
(216) |
(613) |
Reinsurance contracts held |
2 |
(50) |
33 |
(40) |
Net insurance finance income (expense), excluding segregated fund account balances |
(30) |
(802) |
(183) |
(653) |
Segregated fund account balances net investment and insurance finance result |
||||
Investment income (loss) on investments for segregated fund account balances |
52 |
539 |
1,120 |
736 |
Insurance finance income (expenses) segregated fund account balances |
(52) |
(539) |
(1,120) |
(736) |
Segregated fund account balances net investment and insurance finance result |
— |
— |
— |
— |
Net investment and insurance finance result |
4 |
142 |
306 |
136 |
Other income and expenses |
||||
Fee and other income |
14 |
9 |
45 |
31 |
Non-insurance expenses |
(28) |
(28) |
(109) |
(95) |
Interest expenses |
(4) |
2 |
(15) |
(17) |
Total other income and expenses |
(18) |
(17) |
(79) |
(81) |
Net income (loss) before taxes |
19 |
173 |
403 |
236 |
Income taxes |
(3) |
(35) |
(103) |
(46) |
Net income (loss) after taxes |
16 |
138 |
300 |
190 |
Less: net income (loss) attributable to the participating account |
(3) |
20 |
7 |
22 |
Shareholders' net income (loss) |
19 |
118 |
293 |
168 |
Less: preferred share dividends declared and distributions on other equity instruments |
3 |
7 |
12 |
12 |
Common shareholders' net income (loss) |
$ 16 |
$ 111 |
$ 281 |
$ 156 |
Empire Life reported Common shareholders' net income (loss) of $16 million in the fourth quarter of 2024, a $95 million decrease compared to the fourth quarter of 2023. The period over period decrease was driven by large gains in the Company's Net investment and insurance finance results due to interest rate decreases in the fourth quarter of 2023 that did not reoccur in the same period in 2024.
Net insurance service result decreased by $15 million in the fourth quarter, compared to the same period in 2023. Contributing factors include adverse mortality experience in the Individual Insurance product line relative to the prior period, and unfavourable long-term disability (LTD) claims experience in the Group Solutions product line.
Net investment and insurance finance result decreased by $138 million in the fourth quarter compared to the same period in 2023. This was mainly due to modest interest rate movements in the fourth quarter of 2024 relative to the more significant interest rate decrease in the fourth quarter in 2023. In addition there were favourable net investment gains from non-fixed income assets in the fourth quarter in 2023.
Total other income and expenses was a net expense of $18 million in the fourth quarter, a $1 million increase compared to the same period in 2023. The change is due to higher Non-insurance operating expenses related to investments in information systems and process efficiency which were offset by gains in Fee and other income due to strategic acquisitions during the quarter.
Full year Common shareholders' net income (loss) of $281 million was a $125 million increase compared to 2023. The increase over prior year was primarily due to higher Net investment and insurance finance result driven by increases in Net insurance finance income, related to impacts from insurance contract liability assumption updates, and interest rate movements in 2024.
Net insurance service result decreased by $5 million in 2024 compared to the prior year, primarily due to adverse claims experience in our Individual Insurance and Group Solutions product lines, partially offset by improved expense experience in our Wealth Management product line.
Net investment and insurance finance result increased by $170 million in 2024 compared to 2023. This was mainly due to more favourable impacts from interest rate movements and updates to the discount rate assumption applied in the measurement of insurance contract liabilities.
Total other income and expenses was a net expense of $79 million in 2024 a $2 million favourable decrease compared with the net expense of $81 million in 2023. Gains in Fee and other income in the Capital and Surplus segment related to disposal of Property and equipment were offset by increased Non-insurance operating expenses across the Company during the year.
The company's Life Insurance Capital Adequacy Test Total ratio was 151% at December 31, 2024, well above the requirements set by the Office of the Superintendent of Financial Institutions, Canada 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 financial measures as defined in IFRS Accounting Standards. Empire Life also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Empire Life's management also uses non-IFRS measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and to determine components of management compensation. Empire Life believes that these measures provide information useful to its shareholders and policyholders in evaluating the Company's underlying financial results. Further information on these non-IFRS measures can be found in Empire Life's latest Management's Discussion & Analysis (MD&A), filed on Empire Life's profile available at www.sedarplus.ca.
Additional information
All amounts are in Canadian dollars and are based on the consolidated financial results of Empire Life for the period ended December 31, 2024. 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 provide expertise and intelligent solutions to help Canadians navigate life with confidence. As of December 31, 2024, Empire Life had total assets under management of $19.7 billion. Follow us on social media @EmpireLife or visit www.empire.ca for more information.
SOURCE The Empire Life Insurance Company
Karen Smith, Director, Corporate Communications, 613 548-1890, ext. 3387, [email protected], www.empire.ca
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