Empire Life is reporting third quarter shareholders' net income that is 7.9% lower than it posted in the same quarter last year. Year to date, however, the insurer's results are still 14.8% higher than they were in 2014.
The Kingston-based insurer recorded shareholders’ net income of $22.2 million in Q3, compared to $24.1 million last year. Empire says that these lower results were due in part to reduced profits in its individual insurance line. "The decreased profit from this product line primarily resulted from experience losses, including a $5.7 million loss from strengthening asset default reserves due to a ratings agency downgrade of Province of Ontario issued debt," it says.
The company's wealth management's results improved, however, thanks mostly to growth in segregated fund management fees as well as increased income from guarantee fees that are related to guaranteed minimum withdrawal benefit (GMWB) products.
"Despite the recent drop in stock markets, many of Empire Life's segregated funds have performed well. The improvement in fee income relative to the first nine months of 2014 was primarily due to positive segregated fund net sales in the last 12 months, product price increases and the positive impact of the above mentioned segregated fund performance. Earnings on surplus improved primarily due to increased gains on the sale of bonds," says Empire.