(May 2 – 12:30 ET) – Canada Life Financial Corp. is reporting improved earnings for the first quarter ending March 31.

The life insurance company said shareholders’ net income increased 23% to $87 million for the first quarter of 2001, up $16 million over the same quarter last year. Earnings per share for the first quarter were 54¢, compared with 44¢ reported in the same period a year ago.

Return on shareholders’ equity for the 12 months ended March 31, was 13.2%, up from the 13% reported for the 12 months ended Dec. 31, 2000 and ahead of the 11.9% reported in the first quarter of 2000.

At its meeting today, the company’s board of directors approved a quarterly dividend of 13¢ per common share, payable June 29, 2001 to shareholders of record at the close of business on May 25, 2001.

According to the company, the $16 million increase in shareholders’ net income over the same period last year was primarily due to better mortality and morbidity experience, the continuing impact of improved net investment spread of assets over liabilities, and expense efficiencies. These benefits were partially offset by the negative effects of global stock market reductions. The 13.2% return on shareholders’ equity for the 12 months ended March 31 is within the 13-14% target for 2001 set at the time of demutualization.

Total premiums, ASO premium equivalents and deposits grew across all divisions to reach $2,812 million, a $536 million or 24% increase compared with the same period last year.

Assets under administration were $62,551 million as at March 31, an increase of $5,870 million or 10% over the same period last year, primarily as a result of acquiring $5,240 million in new group savings business in Canada on December 31, 2000.

The company’s Minimum Continuing Capital and Surplus Requirements ratio, was 198%, up from 192% at the same date last year and well ahead of minimum requirements.