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Press release from Marketwire

E-L Financial Corporation Limited Announces December 31, 2012 Year End Financial Results

Tuesday, March 05, 2013

E-L Financial Corporation Limited Announces December 31, 2012 Year End Financial Results12:56 EST Tuesday, March 05, 2013TORONTO, ONTARIO--(Marketwire - March 5, 2013) - E-L Financial Corporation Limited ("E-L Financial") (TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G)(TSX:ELF.PR.H) reported for the year ended December 31, 2012, consolidated net operating income1 of $87.6 million or $18.62 per share2 in 2012 compared with $30.3 million or $5.15 per share in 2011. The $57.3 million increase in net operating income in 2012 versus 2011 is principally attributable to a $35.2 million increase in net operating income at the life insurance operation (Empire Life) as a result of a less severe long-term interest rate drop, higher product prices, and favourable improvement in policy liability assumption updates in the Individual Insurance product line. The $10.0 million increase in the general insurance operation's (The Dominion) net operating income is mainly due to lower claims expense for weather-related property losses. Net income (loss) E-L Financial earned consolidated net income of $472.7 million or $116.66 per share compared with a net loss of $44.7 million or $13.93 per share in 2011. In addition to the increase in net operating income described previously, improved global equity markets during 2012 resulted in a $125.8 million increase in fair value through profit or loss ("FVTPL") investments and a $72.8 million increase in the Company's share of income from associates compared to decreases in 2011 of $88.0 million and $23.9 million, respectively. As a result of E-L Financial obtaining over 50% of the voting shares of United Corporations Limited ("United") by the end of the year, the Company commenced recording its investment in United using the consolidated method of accounting. The consolidation of United resulted in an after tax gain of $142.2 million, reflecting the excess of the fair value of United's assets and liabilities over the Company's carrying value of United. Comprehensive income (loss) E-L Financial earned consolidated comprehensive income of $481.8 million or $118.96 per share in 2012 compared with a loss of $57.8 million or $17.24 per share in 2011. Consolidated other comprehensive income ("OCI") was $9.1 million or $2.30 per share compared with other comprehensive loss ("OCL") of $13.1 million or $3.31 per share in 2011. The $22.2 million increase in OCI for the year is mainly due to an increase in unrealized gains on available for sale ("AFS") investments. Duncan Jackman, Chairman, President and CEO of E-L Financial stated, "Our results for 2012 reflected strong performance from our investment portfolio and improved results at our insurance subsidiaries. Despite the economic uncertainty, global equity markets rallied during the year and had a positive impact on our investment portfolio at the corporate level. The life insurance business was impacted to a lesser degree from interest rate declines compared to the prior year and benefited from higher product prices and favourable actuarial assumption updates. The general insurance business underwriting results were primarily impacted by reserve strengthening in the fourth quarter in personal auto in a year that otherwise showed significant improvement in personal property and commercial underwriting results."CONSOLIDATED SUMMARY OF COMPREHENSIVE INCOME (LOSS)2012(thousands of dollars)E-L CorporateThe DominionEmpire LifeTotalNet operating income$23,247$15,965$48,358$87,570Realized gain on available for sale investments including impairment write downs4,31024,29715,69044,297Share of income of associates72,823--72,823Fair value change in fair value through profit or loss investments125,810125,810Gain on the consolidation of United142,241--142,241Net income368,43140,26264,048472,741Other comprehensive income (loss)6,55012,645(10,162)9,033Comprehensive income$374,981$52,907$53,886$481,7742011(thousands of dollars)E-L CorporateThe DominionEmpire LifeTotalNet operating income$11,200$5,929$13,178$30,307Realized gain on available for sale investments including impairment write downs5,02919,31312,55236,894Share of loss of associates(23,886)--(23,886)Fair value change in fair value through profit or loss investments(88,038)(88,038)Net (loss) income(95,695)25,24225,730(44,723)Other comprehensive (loss) income(467)1,365(13,927)(13,029)Comprehensive (loss) income$(96,162)$26,607$11,803$(57,752)1 Use of non-GAAP measures:"Net operating income" is net income excluding realized gain (loss) on available for sale investments ("AFS") including impairment write downs, the Company's share of income (loss) from associates, the fair value change in fair value through profit or loss ("FVTPL") investments in the E-L Corporate portfolio and the gain on the excess of the fair value of United's assets and liabilities over the Company's carrying value of United, all net of tax. The term net operating income does not have any standardized meaning according to GAAP and therefore may not be comparable to similar measures presented by other companies.2 All earnings per share figures are net of dividends paid on First Preference shares.FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: E-L Financial Corporation LimitedMark M. TaylorExecutive Vice-President and Chief Financial Officer(416) 947-2578(416) 362-2592 (FAX)