E-L Financial 2-Q Boosted by General Insurance

The first half 2004 financial return for Toronto-based E-L Financial Corp. (TSX: ELF) shows significant improvement over the result for the same period in 2003, with the first six months of this year mostly showing gains made in the general insurance segment. E-L is the parent of the Dominion of Canada General Insurance Co.

For the first half of this year, E-L pulled in overall net income of $54.7 million ($13.60 a share) compared with the $18.1 million ($4.51 a share) reported for the same period in 2003. The company’s revenue for the latest reporting period rose to $924.1 million from the $770.1 million reported a year go. Investment income also grew to $142.3 million from the $130.7 million shown for the same period last year.

In the general insurance segment, E-L’s net income blossomed to $34.9 million for the first half of 2004 from the $3.8 million disclosed a year ago. Revenue also climbed to $571.2 million from the $430.1 million declared a year ago. The company’s general insurance segment posted a gain from sale of investments of $5 million compared to a loss of $18.0 million which was reported for the same period the year prior.

E-L chairman Duncan Jackman highlights the difficult environment faced by the company’s operating subsidiaries, with Dominion recently having announced its intention to withdraw from Newfoundland as a result of negative auto insurance reforms (several insurers to decide to leave the province as a result). “There is an unusually high degree of uncertainty around both the capital markets and the regulatory environment in which our operating subsidiaries do business,” he notes. However, Jackman observes, “we feel we are more than adequately capitalized to serve our clients”.