Empire Life has reported net income of $33.4 million for Q2 2017, compared to $24.8 million for 2016. Year to date net income was $83.6 million, an increase from $62.1 million in 2016.
Return on equity was 10.1 per cent for the second quarter of 2017, an improvement from 8.7 per cent for the same quarter of 2016.
Lower hedging costs
The increase in earnings is “a result of lower hedging costs and improved operating performance in the Employee Benefits product line, partially offset by lower gains in the Individual Insurance product lines,” stated the insurer in an announcement issued July 27.
Year to date earnings also benefited from improved operating performance in the Wealth Management product line, says Empire Life.
Encouraged by interest rate hike
“We continued to make progress in increasing our earnings while maintaining a strong capital position and high quality mix of assets. Empire Life’s Wealth Management product line sales benefited from fairly stable capital markets and our focus on investing in technology to improve the customer experience and maintaining a diversified distribution strategy. These factors and continued attention on expense management contributed to Empire Life’s earnings in the second quarter,” said Mark Sylvia, President and Chief Executive Officer of Empire Life. “We are also encouraged by the Bank of Canada raising its overnight rate to 0.75 per cent. A stable economy and a positive trend in long-term interest rates help our individual insurance business and our ability to offer competitive insurance products to our customers.”