Empire's quarterly ROE up 3% over last yearpar Andrew Rickard | May 03 2016 09:45AM
Mark Sylvia | Photo: Réjean Meloche
Empire Life has reported an annualized return on common shareholders' equity (ROE) of 13.4% for the first quarter of 2016, up from the 10.0% recorded in the same period last year.
Empire released its quarterly financial results last week and revealed that its net premium revenue came to $230 million during the first three months of the year; this is 6% higher than it was in the same period in 2015, thanks mostly to increased demand for fixed interest annuity products. While the insurer's gross segregated fund sales decreased 14% due to lower demand for its 75% maturity guarantee products, Empire’s overall assets under management were still up by 2% for a total of $14.9 billion. The company's fee income came to $55 million in Q1, a 5% gain due primarily to higher seg fund guarantee fees.
Universal life insurance sales decline
Individual insurance annualized premium sales dropped by 35% during the first quarter of 2016; Empire says this decline was due to poor sales of its universal life insurance product. However, profits in individual insurance were still up because of better investment experience and due to management's efforts to improve the company's asset/liability matching. In particular, Empire says it increased investments in real estate limited partnership units and made changes to its bond investments.
“I am very pleased with the progress made on improving our asset/liability matching in 2016 and the resulting improvement in Individual Insurance net income.” said Empire Life’s president and CEO Mark Sylvia. “This is an area of continuing focus given the volatility of market interest rates.”