Empire Life Releases 2014 Year-End Financial Results

KINGSTON, ONTARIO--(Marketwired - March 17, 2015) - The Empire Life Insurance Company (Empire Life) today released its 2014 year-end financial results. Empire Life achieved strong earnings with an overall shareholders' net income of $98.7 million compared to $113.3 million in 2013. Results in the Individual Insurance business line were down significantly from 2013, but this was partially offset by strong growth in Wealth Management net income.

The Individual Insurance product line results were $27.5 million, a decrease of $38.9 million from the very strong earnings achieved in 2013. The decrease in long-term interest rates in 2014 versus the increase experienced in 2013 was the main cause of these lower results.

The Wealth Management product line results were very strong at $41.7 million, an increase of $23.1 million from 2013. The increase was due mainly to growth in segregated fund management fees and growth in segregated fund guarantee fees related to guaranteed minimum withdrawal benefit (GMWB) products. This improvement in fee income was primarily due to the positive impact of favourable stock market conditions, strong segregated fund product sales in 2014 and GMWB price increases.

The Employee Benefits product line had stronger results than last year, achieving $9.0 million in net income, compared to last year's $8.6 million, primarily due to a reserve release from the annual assumption update, partly offset by unfavourable health claims and long-term disability results.

"Given the unfavourable interest rate environment, the weaker Individual Insurance results are not surprising," said Mark Sylvia, President and Chief Executive Officer. "I am very pleased with the strength of our Wealth Management results and the balanced approach taken to update our segregated fund product line in 2014, recognizing the regulatory and economic environment while still providing Canadians with affordable guaranteed products."

Other results

• Assets under management (including segregated fund and mutual fund assets) increased 14.2% over 2013 levels to reach $13.7 billion.
• Total premium revenue and fee income increased by 8.5% to reach $1.06 billion.
• Wealth Management sales increased 32% and Individual Insurance sales increased 7% over 2013 levels. However, Employee Benefit sales weakened by 19% from 2013 levels.
• Shareholders' Capital and Surplus earnings of $22.4 million were up from $13.8 million in 2013, due mostly to gains on the sale of bonds.
• Participating policyholder net gain (after the payment of dividends) was $8.7 million compared to a $3.2 million loss in 2013. The improved result primarily relates to a reserve release from the annual assumption update.
• Empire's Minimum Continuing Capital and Surplus Requirements (MCCSR) ratio declined to 197% (December 31, 2014) from 231% (September 30, 2014) mainly due to low long-term interest rates and a comprehensive update of the methods and assumptions used in our stochastic model for determining MCCSR required capital for segregated fund product guarantees.

The Empire Life Annual General Meeting will take place on Wednesday April 29, 2015 in Toronto, Ontario. The management proxy information circular and annual report are being mailed in April to shareholders and participating policyholders who request notice of the meeting. Empire Life's 2014 Annual Report is now available for viewing and download at www.empire.ca.

About Empire Life

A subsidiary of E-L Financial Corporation Limited and in business since 1923, Empire Life helps Canadians build wealth and protect their financial security with competitive individual and group life and health insurance, investment and retirement products. The company's vision is to be known for simplicity, being easy to do business with, and having a personal touch.

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