February 16, 2012 - Amid an economic environment that challenged the entire
insurance industry, Equitable Life of Canada achieved earnings of
$8.5 million in 2011, down from record earnings of $32.0 million in
2010.
Low interest rates, volatile financial markets and poor lapse
experience in a segment of the Individual line of business
contributed to the earnings decline. Reflecting these
conditions resulted in a net strengthening of the reserves by $33.1
million. Offsetting the impact of the difficult environment were a
focus on expense management, excellent results in the Group line of
business and good returns on surplus.
Despite a decline in earnings, Equitable Life's participating
policyholders' equity, one of the key measures of a life insurer's
financial stability, increased 2.8% to $307.4 million in 2011. And
the Company's Minimum Continuing Capital and Surplus Requirement
(MCCSR) ratio finished the year at 190%, well above the minimum
level of 150% set out by the Office of the Superintendent of
Financial Institutions Canada (OSFI).
In a tough environment, all lines of business finished the year
with sales at or slightly below 2010 levels. Total premiums and
segregated funds deposits increased 5.1% to $580.4 million, and
total assets under administration climbed to $2.8 billion, up 7.4%
from the previous year. In addition, total dividend payments to
policyholders increased 12.3% to $11.0 million from $9.8 million in
2010.
Equitable Life has continued to maintain a sound investment
portfolio that has delivered consistent returns. With the debt
crisis continuing to unfold in Europe, the Company has no direct
exposure to sovereign debt issues and only limited exposure to
foreign debt. As well, Equitable Life took steps to ensure its
ongoing stability by strengthening the Company's risk
framework.
"The year 2011 was very challenging for all Canadian life
insurance companies," said Ronald Beettam, Equitable Life's
President and Chief Executive Officer. "While we were disappointed
with the results, we continue to be in a strong position during
these volatile times."
"Equitable Life's ability to remain strong in the midst of
difficult market conditions reflects the benefits of our commitment
to mutuality," added Beettam. "Our mutual status provides
continuity and stability, and allows us to focus on meeting the
long-term interests of our policyholders."
2011 Financial Highlights
- Net income decreased to $8.5 million, for a return on
policyholders' equity of 2.8%.
- Participating policyholders' equity increased 2.8% to $307.4
million.
- Capital strength, as measured by the MCCSR ratio, ended the
year at 190%.
- Premiums and deposits increased by 5.1% to $580.4
million.
- Assets under administration climbed by 7.4% to $2.8
billion.
About Equitable Life of Canada
As one of Canada's largest mutual life insurance companies,
Equitable Life is dedicated solely to its policyholders. The
Company is focused on providing them with high-quality service,
security and well-being.
Since 1920, Canadians have been depending on Equitable Life for
financial protection. The Company offers a wide selection of
competitive Individual Life and Health, Group Life and Health, and
Individual Savings and Retirement products to meet the needs of its
large and growing base of participating policyholders.
www.equitable.ca
Media relations contact
Don Bisch
Director, Corporate Communications
1.800.722.6615 ext. 8017
dbisch@equitable.ca
