WATERLOO, ON, Feb. 16, 2012 /CNW/ - 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
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
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
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
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.
SOURCE Equitable Life of Canada
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