EFH Holdings Inc. Reports Fourth Quarter and Full Year 2020 Results

TORONTO, March 4, 2021 /CNW/ - EFH Holdings Inc. ("EFH" or the "Company") (TSXV: EFH) which operates in the property and casualty insurance industry in Canada, today reported net income from continuing operations of $4.9 million for the year and $0.5 million for the three months ended December 31, 2020.

Highlights

• Net income from continued operations of $4.9 million for 2020 compared to a loss of $0.3 million for 2019 and $0.5 million in Q4 2020 compared to a loss of $0.03 million in Q4 2019.
  
  
• Net income per share on continued operations of $0.35 per share for 2020 compared to a net loss of $0.01 per share for 2019. Net income per share on continued operations of $0.02 per share for Q4 2020 compared to $0.01 per share for Q4 2019.
  
  
• Combined ratio improved from 104.8% in 2019 to 93.2% in 2020 and from 109.5% in Q4 2019 to 94.9% in Q4 2020 largely due to growth in premium and lower frequency of claims.
  
  
• A 17% increase in Direct Written Premiums in 2020 over 2019 and 35% increase in Q4 2020 over the same period in 2019 as a result of growth in both the Personal and Commercial Lines. Company also started writing business in Quebec in Q4 2020.
  
  
• Closing book value per share of $1.59 compared to $1.55 at the end of the third quarter. The increase from the third quarter is the results of $0.02 from earnings per share in the fourth quarter and $0.02 from increase in accumulated other comprehensive income.
  
  
• The financial information below compares three and twelve months ended December 31, 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 December 31, 2020 was 312%, which comfortably exceeds the supervisory target of 150%.

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 EFH Holdings Inc.

Founded in 1998, EFH 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. The Company's name was changed from Echelon Financial Holdings Inc. to EFH Holdings Inc. after receiving approval from shareholders on December 11, 2020. It trades on the TSX Venture Exchange under the symbol EFH and prior to December 23, 2020 it traded on the Toronto Stock Exchange.  

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For more information, please visit www.efh.ca

SOURCE EFH Holdings Inc.