Echelon Financial Holdings Inc. Reports Fourth Quarter 2019 Results

TORONTO, Feb. 21, 2020 /CNW/ - Echelon Financial Holdings Inc. ( "EFH" or the "Company") (TSX:EFH), which operates in the property and casualty insurance industry in Canada, today reported direct written premium of $8.6 million in the fourth quarter of 2019, which represents a $1.2 million increase over the same period in 2018. For the financial year ended December 31, 2019, direct written premium increased by $2.9 million over the financial year ended December 31, 2018, from $33.9 million to $36.8 million. These increases were largely due to increased rates in 2019 over 2018. The Company's investment income increased by $0.8 million in the fourth quarter of 2019 over the same period in 2018 and increased by $1.5 million in the financial year ended December 31, 2019 over the financial year ended December 31, 2018. The increases were mostly due to interest earned on its increased cash position over last year as a result of the sale of Echelon Insurance and improvement in the performance of preferred shares.

In the fourth quarter of 2019, the Company had an underwriting loss of $0.8 million compared to an underwriting income of $1.8 million for the same period in 2018. For the financial year ended December 31, 2019, the Company had an underwriting loss of $1.6 million compared to an underwriting loss of $1.1 million in the financial year ended December 31, 2018. The underwriting loss in the financial year ended December 31, 2019 was largely due to Hurricane Dorian ($0.9 million) and unfavorable developments in prior years' unpaid claims ($2.4 million). Without these events, the Company would have an underwriting income of $1.7 million.

The Company is pleased with The Insurance Company of Prince Edward Island's successful transition to become fully operational on its own after the sale of Echelon Insurance and with its implemented rate increases and support from brokers.

Fourth Quarter 2019 Highlights

• Net loss of $0.5 million in fourth quarter 2019 compared to net loss of $7.4 million in the fourth quarter of 2018.
• Net income of $0.01 per diluted share on continued operations compared to net income of $0.06 per diluted share on continued operations in the fourth quarter of 2018.
• Closing book value per share of $7.45 is comparable to $7.46 at end of third quarter of 2019.

Financial Summary

Non-IFRS Financial Measures

EFH uses both IFRS and certain non-IFRS measures to assess performance. Securities regulators require that companies caution readers about non-IFRS measures that do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures used by other companies. EFH analyzes performance based on underwriting income, which is non-IFRS measure. Underwriting income is defined as net earned premiums less net claims incurred, net acquisition expenses, general expenses, and excludes any impact of change in discount rate on claims and corporate expenses.  Underwriting income is commonly used in the insurance industry. 

About Echelon Financial Holdings Inc.

Founded in 1998, Echelon Financial Holdings Inc. operates in the property and casualty insurance industry in Canada, providing personal and commercial lines insurance exclusively through the broker channel. The Company distributes insurance products through The Insurance Company of Prince Edward Island. It trades on the Toronto Stock Exchange under the symbol EFH. For more information, please visit efh.ca

SOURCE Echelon Financial Holdings Inc.