Empire Life earnings tumbleBy The IJ Staff | May 01 2020 10:04AM
The Empire Life Insurance Company announced April 30 that the impact of COVID-19 has resulted in a net loss for the company in the first quarter of 2020.
The company reported a net loss of $32-million for common shareholders in the first quarter, compared to net income of $43-million earned in the first quarter of 2019.
“Market turmoil from interest rate declines, widened credit spreads and a dramatic drop in equity markets impacted our balance sheet,” says president and CEO, Mark Sylvia. “We have strengthened our policy liability reserves to support segregated fund guarantees and other lines of business,” a move which the company says was partially offset by improved asset liability management trading gains and improved gains from increased yields on inforce assets and liabilities backing the company’s life insurance and annuity lines. Profit on in-force business increased eight per cent in the first quarter, driven by modest increases across all product lines over the last 12 months.
Empire Life’s Life Insurance Capital Adequacy Test (LICAT) total ratio came in at 132 per cent at March 31, 2020, compared to 155 per cent reported in December 2019.
“The company continues to monitor developments in equity and fixed income markets generally, and in connection with the company’s investment portfolios in particular. While it is too early to predict the impact of COVID-19 related factors,” the company said in a statement, “we expect that these events will have an impact on the company’s performance in the near term.”
April 30 the company also declared cash dividends of $0.36 and $0.31 on its preferred series shares, payable July 17, 2020 to shareholders of record June 17.