E-L Financial Corporation Limited
TSX : ELF
TSX : ELF.PR.F
TSX : ELF.PR.G

E-L Financial Corporation Limited

March 08, 2011 14:32 ET

E-L Financial Corporation Limited Announces December 31, 2010 Year End Financial Results

TORONTO, ONTARIO--(Marketwire - March 8, 2011) - E-L Financial Corporation Limited ("E-L Financial") (TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G) reported for the year ended December 31, 2010, consolidated net operating income of $102.8 million or $28.01 per share, compared with $44.9 million or $10.51 per share in 2009. The increase in earnings is mainly a result of the improvement in The Dominion of Canada General Insurance Company's net operating income which reflected minimal impact from changes in claims discount rates in 2010 in contrast to a large expense from decreases in claims discount rates in 2009, lower claims expenses for weather-related property losses, earned rate increases and higher favourable prior year claims development in 2010 than in 2009. Net operating income for The Empire Life Insurance Company was lower in 2010 compared to the prior year, due to the low long-term interest rate environment and its impact on individual insurance business in 2010 and last year's favourable impact of a $17.7 million income tax adjustment resulting from amendments to the Income Tax Act (Canada) related to financial instruments.

Net income (loss)

E-L Financial earned a consolidated net income of $144.7 million or $40.66 per share in 2010 compared with a net loss of $184.9 million or $58.75 per share in 2009. The net loss in 2009 was largely due to a net realized loss on the sale of investments, including impairment write downs, of $242.3 million. In addition to higher operating income and realized gains in 2010, earnings from equity method investments improved in 2010 to $30.5 million compared to $12.5 million in 2009.

Comprehensive income

E-L Financial earned consolidated comprehensive income of $195.3 million or $55.94 per share in 2010 compared with $249.5 million or $72.16 per share for the comparable period in 2009. Consolidated other comprehensive income ("OCI") was $50.6 million or $15.28 per share compared with $434.4 million or $130.91 per share for the prior year. In 2009 OCI was significantly impacted by a $211.8 million reclassification adjustment resulting from the realized loss on the available for sale investments, the reversal of $57.6 million of unrealized losses relating to Algoma Central Corporation and Economic Investment Trust Limited on reclassification as equity method investments and unrealized gains from the positive impact of the stock markets recovery.

"We are very satisfied with 2010's solid results", said Duncan Jackman, Chairman, President and CEO of E-L Financial. "At Empire Life, historically low interest rates resulted in substantial strengthening of our policy liabilities. Despite this challenging environment, sales in all product lines were higher than the previous year. At The Dominion, a better than expected 2010 was largely the result of strong underwriting results in the latter half of the year, we look forward to improved profitability continuing in 2011."

CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME (LOSS)  
                 
  Year ended December 31, 2010  
(thousands of dollars)   E-L Corporate     The Dominion     Empire Life     Total  
Net operating income $ 23,343   $ 62,623   $ 16,826   $ 102,792  
Realized gain (loss) on available for sale investments including impairment write downs   (726 )   4,912     7,218     11,404  
Income from equity method investments   30,497     -     -     30,497  
Net income   53,114     67,535     24,044     144,693  
Other comprehensive income   9,520     20,951     20,129     50,600  
Comprehensive income $ 62,634   $ 88,486   $ 44,173   $ 195,293  
   
   
  Year ended December 31, 2009  
(thousands of dollars)   E-L Corporate     The Dominion     Empire Life     Total  
Net operating income (loss) $ 20,135   $ (37,800 ) $ 62,590   $ 44,925  
Realized loss on available for sale investments including impairment write downs   (108,371 )   (114,177 )   (19,740 )   (242,288 )
Income from equity method investments   12,455     -     -     12,455  
Net income (loss)   (75,781 )   (151,977 )   42,850     (184,908 )
Other comprehensive income   57,835     302,071     74,505     434,411  
Comprehensive income (loss) $ (17,946 ) $ 150,094   $ 117,355   $ 249,503  
 
1Use of non-GAAP measures:
"net operating income (loss)" is net income excluding realized gain (loss) on available for sale investments including impairment write downs and income (loss) from equity method investments, all net of tax. The term net operating income (loss) does not have any standardized meaning according to GAAP and therefore may not be comparable to similar measures presented by other companies.

Contact Information

  • E-L Financial Corporation Limited
    Mark M. Taylor
    Executive Vice-President and Chief Financial Officer
    (416) 947-2578
    (416) 362-2592 (FAX)