E-L Financial Corporation Limited, Empire Life’s parent company, released its earnings late Nov. 9, reporting net income for the third quarter of 2020, but a net loss, year-to-date for the nine months ended Sept. 30, 2020.
Consolidated shareholder’s net income reached $201-million or $52.88 per common share in the third quarter of 2020, compared to the $101-million or $24.61 per common share earned in the third quarter of 2019. For the nine months ended Sept. 30, the company reported a consolidated shareholder’s net loss of $10-million or $5.70 per common share compared to net income of $451-million or $111.99 per common share earned year-to-date as of Sept. 30, 2019.
The company’s net equity value per common share was $1,508.40 at Sept. 30, an increase of one per cent from $1,486.19 at Dec. 31, 2019.
Higher Q3 profits for Empire Life
The Empire Life segment, meanwhile, reported net income of $51-million in the third quarter of 2020, compared to $35-million for the third quarter of 2019, primarily thanks to changes in the investment supporting the individual insurance line. This was partially offset by increases in policy liabilities for segregated fund guarantees.
Empire Life’s net income for the first nine months of 2020 was $67-million, compared to $97-million for the first nine months of the year in 2019. The decrease was primarily a result of the company’s effort to strengthen policy liabilities supporting segregated fund guarantees. Empire Life’s Life Insurance Adequacy Test (LICAT) total ratio was 132 per cent at Sept. 30, compared to 155 per cent at Dec. 31, 2019.
Declared a cash dividend
In addition, the company declared a cash dividend of $1.25 per common share, payable January 15, 2021 to shareholders of record on Dec. 31, 2020. Preferred share dividends, payable at the same time, range between $0.125 and $0.34375.
Finally, the company also announced it intends to commence a substantial issuer bid, under which the company will offer to purchase up to $100-million in value of its outstanding common shares. The offer would be for approximately four per cent of the total number of issued and outstanding shares if the purchase price is determined to be $650.00, the minimum price per share under the offer, or 3.5 per cent of the total number of outstanding shares if the purchase price is determined to be $750.00, the maximum price per share under the offer. The offer will commence on Nov. 11, 2020, expiring at the end of Dec. 16, 2020. The company says the offer will not be conditional upon any minimum number of shares being tendered.