Empire Life reported a common shareholders’ net loss of $23 million in the third quarter, compared with net income of $93 million a year earlier, as interest rate movements hit its investment results.
The loss amounted to $23.37 per share, compared with earnings of $94.60 per share in the third quarter of 2025. Over nine months, common shareholders’ net income fell to $66 million from $195 million.
“Although broader market volatility remains an industry concern, our operations remain stable as confirmed by our recent DBRS assessment which reflects our diversified earnings sources,” said Mark Sylvia, president and CEO.
The net investment and insurance finance result fell by $158 million to a loss of $44 million. Empire said the decline was mainly due to unfavourable interest rate movements and weaker performance in non-fixed income assets, compared with favourable impacts a year earlier.
The core insurance business improved. The net insurance service result rose $13 million to $56 million, mainly because of assumption updates in the individual insurance segment. Insurance revenue rose to $399 million from $386 million.
Spending also increased. Total other expenses rose to $33 million from $25 million, which Empire attributed to higher investment in technology and other strategic initiatives. Non-insurance expenses rose to $46 million from $31 million, although fee and other income nearly doubled to $19 million.
Sylvia said segregated fund sales had been exceptionally strong in 2026, following new product launches over the past year.
Empire’s LICAT total ratio was 150% at the end of September, down from 159% at the end of June but up from 145% a year earlier. The company said the ratio was well above OSFI requirements and its own internal targets. Return on common shareholders’ equity fell to 4.1% from 12.3%.
Morningstar DBRS confirmed Empire’s financial strength rating at A (high) with a stable trend in April, citing its diversified earnings sources and well-capitalized position. The agency said it would consider a downgrade only if Empire reported sustained losses that significantly reduced its capital buffers.
Empire isn’t alone in feeling the effect of rate movements. Sunlife’s reported net income fell 29% in the third quarter, partly because of unfavourable interest rate impacts, while Manulife’s net income was weighed down by market experience charges.
For advisors, Empire’s loss reflects accounting volatility from market movements rather than a weakening of its insurance business, which improved in the quarter. Its strong capital position and stable DBRS rating suggest no near-term concern for policyholders. The strength of its segregated fund sales shows that Empire’s recent product launches are gaining traction with advisors.
