In the fourth quarter of 2023, Empire Life Insurance Company reported common shareholders’ net income of $111 million.
This compares with net income of $5 million in the same quarter of 2022, restated for IFRS 17.
For the full year, Empire posted common shareholders’ net income of $156 million in 2023, compared with restated net income of $55 million in 2022.
According to the company's press release issued on February 28, this result "was primarily due to higher net investment and insurance finance results driven by a more favourable economic environment from interest rate movements and positive equity returns.”
Empire Life’s President and CEO, Mark Sylvia, underlined the insurer’s focus in 2023 on expanding its investment product suite, including the addition of two growth-focused segregated funds. "Additionally, the current market environment has resulted in sales trending toward our short-term investment products and has yielded positive investment results for the year."
The company no longer discloses the amount of total net premiums nor their distribution among the various business segments.
Investment income
The insurer’s net investment result, excluding segregated funds, generated net income of $944 million in the fourth quarter of 2023, compared with a loss of $4 million in the same quarter of 2022. The latter amount has also been adjusted to comply with IFRS.
For the full year, the net investment result, excluding segregated funds resulted in net income of $789 million, compared with a net loss of $1.7 billion in 2022, on a restated basis.
Insurance income
The net insurance service result totaled $48 million in the fourth quarter of 2023, compared with $58 million for the same period in 2022.
In more detail, for the fourth quarter of 2023, Empire Life reported net insurance income of $20 million in wealth management, $9 million in group insurance and $19 million in individual insurance.
For the full year 2023, the net insurance service result totaled $181 million, compared with $193 million in 2022.
By business segment in 2023, net insurance income reached $88 million in wealth management, down $23 million on the previous year. In individual insurance, net income reached $69 million, down $7 million compared to 2022. In group insurance, insurance income amounted to $24 million, compared with $6 million in 2022.
On December 31, 2023, Empire Life had $18.7 billion in assets under management. According to the fourth-quarter MD&A, assets under management were $17.6 billion on December 31, 2022.
IFRS 17: a learning experience
While adding up figures from previous financial statements, Insurance Portal observed that the total did not add up to the total posted by the insurer for the full fiscal year. Empire Life’s Rebecca Rycroft, Senior Vice-President and Chief Financial Officer, explained why adjustments were made. “In Q3 2023 Empire Life re-classed amounts that were being presented in ‘Other Fee Income and Expenses’ to ‘changes in investment contracts’ relating to deposits and withdrawals on deferred annuities and term certain products. Due to this change in presentation in Q3, adding up each quarter in 2023 and 2022 will not equal the YTD total.”
Rycroft added that the first year of IFRS 17 “has been a learning experience for us and the whole industry. We have had some accounting reclass activity within the period, and we have seen similar adjustments in other companies as 2023 unfolded.”
