The Empire Life Insurance Company reported a drop in second-quarter earnings, with common shareholders’ net income totalling $32 million, down from $35 million in the same period last year.
The decline was attributed to lower investment and insurance finance results and reduced fees and other income.
The company saw a $10 million year-over-year decline in net investment and insurance finance results, largely due to the impact of rising interest rates. Investment income, excluding segregated fund balances, fell to a loss of $73 million from a gain of $70 million in the second quarter of 2024. Insurance finance income, however, improved to $91 million from a loss of $42 million.
The net insurance service result rose to $59 million, compared to $43 million in Q2 2024. Empire Life cited improved mortality outcomes in its Individual Insurance segment and stronger claims experience in Group Solutions as the main drivers.
Fee and other income decreased to $9 million from $15 million, while total other income and expenses widened to a loss of $29 million from $21 million. The difference was partially due to one-time gains in the prior-year quarter from the sale of property and equipment within the Capital and Surplus segment.
Despite the dip in earnings, the company’s capital position remained solid. Empire Life’s Life Insurance Capital Adequacy Test (LICAT) total ratio stood at 142% as of June 30, compared to 151% at the end of 2024. The figure remained above regulatory minimums and the firm’s internal targets.
“We remain focused on responsible capital and liquidity management to ensure the efficient use of resources and drive shareholder value,” said Mark Sylvia, president and chief executive officer of Empire Life. “Our focus on financial stability is reflected in our recent upgraded ratings from DBRS Morningstar to A (high) from A thanks in part to our diversified earnings power and access to distribution.”
Year-to-date, the company recorded $102 million in profit attributable to common shareholders, up from $87 million in the same period last year. Return on common shareholders’ equity for the second quarter was 17.6%, down slightly from 18.1% in the first quarter but ahead of the 12.7% reported in Q2 2024.
