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

E-L Financial Corporation Limited

August 01, 2006 14:51 ET

E-L Financial Corporation Limited Announces June 30, 2006 Interim Financial Results

TORONTO, ONTARIO--(CCNMatthews - Aug. 1, 2006) - E-L Financial Corporation Limited ("E-L Financial") (TSX:ELF)(TSX:ELF.PR.F) today reported that for the quarter ended June 30, 2006, it earned net operating income of $40.8 million or $11.85 per share compared with $23.9 million or $6.79 per share for the comparable period last year. On a year to date basis, E-L Financial earned net operating income of $73.0 or $21.16 per share compared with $56.8 million or $16.27 per share in 2005. Net operating income is before investment gains and income from the equity method investment.

Total net income, including investment gains and income from the equity method investment, for the quarter was $20.9 million or $5.87 per share compared with $67.4 million or $19.88 per share for the comparable period last year. On a year to date basis, E-L Financial earned net income of $109.2 million or $32.02 per share compared with $126.8 million or $37.31 per share in 2005.

The Company owns an investment portfolio ("Corporate investments") and has two operating insurance subsidiaries, The Dominion of Canada General Insurance Company ("Dominion") and The Empire Life Insurance Company ("Empire"). The results of the Corporate investments in the second quarter of fiscal 2006 reflected the poor performance of equity markets on a global basis as Change in unrealized appreciation of portfolio investments decreased by $32.8 million (2005 -- increase of $33.6 million) and the Loss from the equity method investment, United Corporations Limited, was $10.0 million (2005 -- Income of $18.6 million). On a year to date basis, Change in unrealized appreciation increased by $14.7 million (2005 - $53.9 million) and the Income from the equity method investment was $6.4 million (2005 - $28.4 million). The year to date results reflect the positive performance of the equity markets in the first quarter of 2006.

Dominion's net income for the second quarter of 2006 was $36.2 million (2005 - $22.2 million) and for the first six months of 2006 was $68.6 million (2005 - $50.1 million). These results reflect a combined ratio for the second quarter of 89.2% (2005 - 96.4%) and for the first six months of 2006 of 91.3% (2005 - 94.3%) . Despite a decline in revenue reflecting a decrease in premiums, net income was higher for the quarter and year to date due to improved underwriting income, higher investment income and higher realized gains. The improved second quarter and current year underwriting income mainly reflects a lower level of storm losses and improved loss experience from Facility Association business.

Empire's net contribution to E-L Financial's earnings for the second quarter was $8.4 million (2005 - $8.4 million) and for the first half was $18.4 million (2005 - $15.2 million). The quarterly contribution was unchanged from last year despite a net reduction of $2.8 million resulting from the substantive enactment of Bill C-13, which introduced lower future federal income tax rates. Quarterly and year-to-date combined net income from Empire's three major product lines (Wealth Management, Employee Benefits and Individual Insurance) increased relative to the corresponding periods last year. The improvements in earnings were primarily a consequence of the higher profits that resulted from the larger in force base in all three product lines as well as improved claims experience in the Individual Insurance line of business.



E-L FINANCIAL CORPORATION LIMITED

CONSOLIDATED SUMMARY OF REVENUE AND NET INCOME
For the six months ended June 30
(thousands of dollars)

2006
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Corporate General Life
investments insurance insurance Total
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Revenue $ 32,390 $ 569,956 $ 425,750 $ 1,028,096
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Net income:
Income excluding
the undernoted $ 7,570 $ 58,190 $ 7,289 $ 73,049
Amortization of
investment gains - - 11,143 11,143
Gain on sale of
investments 1,993 10,403 - 12,396
Income from equity
investment 6,409 - - 6,409
Change in
unrealized
appreciation of
portfolio
investments 6,239 - - 6,239
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$ 22,211 $ 68,593 $ 18,432 $ 109,236
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2005
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Corporate General Life
investments insurance insurance Total
----------------------------------------------------------------------
Revenue $ 96,332 $ 584,474 $ 400,588 $ 1,081,394
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Net income:
Income excluding
the undernoted $ 6,932 $ 46,096 $ 3,749 $ 56,777
Amortization of
investment gains - - 11,402 11,402
Gain on sale of
investments 701 3,970 - 4,671
Income from equity
investment 23,554 - - 23,554
Change in
unrealized
appreciation
of portfolio
investments 30,365 - - 30,365
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$ 61,552 $ 50,066 $ 15,151 $ 126,769
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E-L FINANCIAL CORPORATION LIMITED

CONSOLIDATED STATEMENT OF INCOME
For the six months ended June 30
(thousands of dollars except per share amounts)

2006 2005
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REVENUE
Insurance premiums $ 744,193 $ 752,105
Annuity premiums 50,986 61,107
Investment and other income 167,886 155,548
Amortization of realized investment gains 17,194 15,802
Amortization of unrealized investment gains 11,768 7,950
Income from equity method investment 6,382 28,364
Change in unrealized appreciation of
portfolio investments 14,673 53,854
Gain on sale of investments 15,014 6,664
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1,028,096 1,081,394
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EXPENSES
Claims and policy benefits 570,417 614,298
Commissions 164,361 161,804
Operating 95,000 87,514
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829,778 863,616
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Income before the undernoted items 198,318 217,778
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Taxes
Income 42,418 45,939
Premium 22,405 22,944
Investment and capital 1,600 1,769
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66,423 70,652
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Income before policyholders' and
minority shareholders' interest 131,895 147,126

Policyholders' and minority shareholders'
portion of income 22,659 20,357
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NET INCOME $ 109,236 $ 126,769
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NET INCOME PER SHARE $ 32.02 $ 37.31

TOTAL ASSETS (including segregated funds) $ 10,067,278 $ 9,078,298

CAPITAL AND SURPLUS $ 2,041,967 $ 1,752,207


Contact Information

  • E-L Financial Corporation Limited
    Mark M. Taylor
    Executive Vice President and Chief Financial Officer
    (416) 947-2578
    (416) 362-0792 (FAX)