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

TORONTO, 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 Corporate			The Dominion		Empire Life			Total
Net operating income	$	23,247		$	15,965	$	48,358		$	87,570
Realized gain on available for sale investments including impairment write downs		4,310			24,297		15,690			44,297
Share of income of associates		72,823			-		-			72,823
Fair value change in fair value through profit or loss investments		125,810								125,810
Gain on the consolidation of United		142,241			-		-			142,241
Net income		368,431			40,262		64,048			472,741
Other comprehensive income (loss)		6,550			12,645		(10,162	)		9,033
Comprehensive income	$	374,981		$	52,907	$	53,886		$	481,774
	2011
(thousands of dollars)	E-L Corporate				The Dominion		Empire Life			Total
Net operating income	$	11,200		$	5,929	$	13,178		$	30,307
Realized gain on available for sale investments including impairment write downs		5,029			19,313		12,552			36,894
Share 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	)		25,242		25,730			(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.