TORONTO, Nov. 12, 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 net income attributable to shareholders on continued operations of $2.9 million, or $0.24 per share, for the three months ended September 30, 2020.

Third Quarter Highlights

• Net income per share on continued operations of $0.24 per share compared to a net loss of $0.04 per share in the third quarter of 2019.
  
  
• A combined ratio of 95.4% compared to 115.4% in the third quarter of 2019.
  
  
• A 14% increase in Direct Written Premiums over the same period in 2019 to $11.7 million as a result of growth in both the Personal and Commercial Lines. The COVID-19 pandemic did not have a significant impact on direct premiums written for the third quarter of 2020 when compared to the same period in prior year.
  
  
• Investment income was $2.2 million higher in the third quarter compared to same period in 2019, largely due to the sale of the majority of Common Shares portfolio.
  
  
• The Company settled the claim from New Nordic Odin Denmark arising from the sale of its European operations for $7 million, the result is included in discontinued operations. The Board concluded that it is in the best interests of EFH and the shareholders to settle the claim for a reasonable amount in order to avoid the expenses and risks of a lengthy litigation. "This will allow management and the Company to move on with its next phase of growth and expansion and focus on the Insurance Company of Prince Edward Island" said Serge Lavoie, the Company's CEO.
  
  
• Closing book value per share of $1.55 after the Company paid a dividend of $5.60 per share and results of discontinued operations of $0.49 per share during the quarter. The Company's book value per share increased by 8% over that at the end of second quarter on a comparable basis after adjusting for the dividend paid and the results of discontinued operations.

The financial information below compares three and nine months ended September 30, 2020 results with the same periods in 2019.

Underwriting Results:

Capital Management

The Minimum Capital Test ("MCT") ratio of EFH's subsidiary, Insurance Company of Prince Edward Island (ICPEI) as at September 30, 2020 was 332%, which comfortably exceeds the supervisory target.

COVID-19 Pandemic Update

Since June 2020, ICPEI has resumed full operations in its office in Charlottetown while employees in the Mississauga office are still working from home.

ICPEI continued to provide a number of accommodations to its policyholders if they experienced hardship because of COVID-19 and adjusted their auto premiums due to reduction of use. ICPEI has only experienced a minor increase in the number of customer defaults and very few requests to lower monthly premiums based on lower usage of vehicles. These did not have a significant impact on the results of the Company.

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 and underwriting ratios such as combined, expense and loss ratios, which are non-IFRS measures. Underwriting income is defined as net earned premiums less net claims incurred, net acquisition costs, operating expenses, and excludes any impact of change in discount rate on claims and corporate expenses. Loss ratio is net claims incurred divided by net earned premiums. Expense ratio is net acquisition costs plus operating expenses divided by net earned premiums. Combined ratio is the sum of loss ratio and expense ratio. 

Forward-looking Information 

This news release contains forward-looking information based on current expectations. This information includes, but is not limited to, statements about the operations, business, financial condition, priorities, targets, ongoing objectives, strategies, litigation outcomes and outlook of EFH. These statements, which appear in this press release generally can be identified by the use of forward-looking words such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "would", "should", "could", "trend", "predict", "likely", "potential" or "continue" or the negative thereof and similar variations.

This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a projection as reflected in the forward-looking information. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific. A variety of material factors, many of which are beyond EFH's control, affect the operations, performance and results of its business and could cause actual results to differ materially from the expectations expressed in any of this forward-looking information.

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 www.efh.ca

SOURCE Echelon Financial Holdings Inc.

View original content: http://www.newswire.ca/en/releases/archive/November2020/12/c3416.html