Empire Life posted net income of $76 million for Q4 2019, up sharply from $6 million in 2018. For the full year, net income amounted to $174 million in 2019, compared to $137 million in 2018.
In a Feb. 26 statement announcing the results, Empire Life stated that in Q4 2019, it “enacted significant changes to its reinsurance program, which included a significant increase in the Company's individual life insurance retention level, along with a recapture of a significant amount of reinsured business.” The insurer says the net income impact of this reinsurance recapture initiative was $78 million.
The increase in earnings for the full year 2019 compared to 2018 “was primarily a result of the recapture initiative, partly offset by unfavourable assumption updates in the Wealth Management and Individual Insurance lines and a deterioration of long term disability (LTD) experience in the Employee Benefits line,” stated the insurer.
"We are very pleased with the results we have delivered to those who place their trust in us – our customers, our business partners and our shareholders," said Mark Sylvia, President and Chief Executive Officer. "The volatility of the capital markets over the past decade or so continues to reinforce our commitment to diversification across three lines of business. As we enter a new decade, every member of our team understands that what we do makes a difference in the lives of our customers. We remain focused on helping them build wealth and protect their financial security, and on being there when they need us most."
Empire Life's Life Insurance Capital Adequacy Test (LICAT) total ratio was 155% at December 31, 2019.
