Slide 1: Phoenix Holdings 2022 Annual Financial Review
2022 Phoenix Holdings Annual Financial Review
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an offer to purchase the Furthermore, the presentation includes data and assessments based Company’s securities or solicitation to receive such offers and is on external sources, the contents of which were not independently designed solely to offer in
Slide 3: Agenda
Agenda Highlights Strategy & Targets Financial Results Segment Breakdown Appendix Glossary |3
Slide 4: Phoenix Holdings – Overview
Phoenix Holdings – Overview Highlights Group Activities Leading Israeli TA-35 8.9 NISb P&C 19.7 NISb financials group Leading index Market cap 1 Insurance Health Premiums, Contracts Life & Contributions Proven and AA- / AA+ 70+ recognized Holding / Insurance Pension & Provident Years of activity exp
Slide 5: Economic Snapshot
Economic Snapshot GDP Growth 2 GDP per Capita 3 Long-Term Savings AUM 4 • Resilient economic Percent USD ‘000 NIS Trillion performance in 2022 8.6% 6.5% 9% CAGR despite volatile macro Sweden 56 conditions and capital 4.1 4.2% Israel 55 2.4 2.3 2.0 markets 1.6 1.9 Germany 48 • Relative resilience to
Slide 6: 2022 Performance Highlights
2022 Performance Highlights 11.4% 1.1NISb 371NISb 10.1NISb 202% 2022 ROE Comprehensive AUM Shareholders Solvency 1 Income Equity Announcing dividend of 177 337NISm NISm (0.70 NIS/share), in addition to dividend of 160 Dividends from NISm (0.64 NIS/share) 2022 Income distributed in September 2022 Q42
Slide 7: Growth in Core Business
Growth in Core Business Special Items: Insurance Special Items: Additional Core Business Comprehensive Income Investments & NIS millions, after tax 2,316 Interest Rates 141 Insurance Core Business 265 Additional Core Business 1,353 1,044 1,124 146 84 6 99 Comprehensive Income – Q4 NIS millions, afte
Slide 8: Investment Core Capabilities
Investment Core Capabilities Investment performance & track record Responsible allocation & risk management Returns - Insurance Nostro / Corporate Account Asset Allocation - Insurance Nostro / Corporate Account Percent (nominal) Percent (December 31, 2022) 10.6% Cash Alternatives & other 4% 13% 7.4%
Slide 9: Equity Generation and Dividend Distribution
Equity Generation and Dividend Distribution Shareholders' Equity NISm • Dividend announced of 177 NISm 10,145 9,653 • Represents 30% of 2022 comprehensive income 7,970 (sum of 337 NISm together with 160 NISm 6,636 6,446 distributed in September 2022), as part of dividend policy of at least 30% of an
Slide 10: Agenda
Agenda Highlights Strategy & Targets Financial Results Segment Breakdown Appendix Glossary | 10
Slide 11: Value Creation Strategy & Catalysts
Value Creation Strategy & Catalysts Value Drivers 1 2 3 4 Growth Engines Accelerated Growth Innovation & Active Management Capital Management Efficiency Insurance Accelerating growth Deepening client-focus Optimizing group Deploying capital while shifting mix to & sustainable portfolio, management,
Slide 12: Group Targets
Insurance Asset Management Group Targets Distribution Credit Comprehensive Income Income from Non-Insurance Core Businesses NISb 3% returns Without special items, after tax 2.3 NISm 650-700 1.4 1.3-1.5 1.1 390 Shifting group mix 314 toward 50% 271 stable, fee-based income 2020 2021 2022 mid-term tar
Slide 13: 1. Insurance: Continued Growth
Insurance Asset Management 1. Insurance: Continued Growth Distribution Credit Premiums, Contracts, & Contributions NISb 19.7 19.1 +12% CAGR* 7.3 Savings Policies 14.5 7.8 COVID-19 12.1 3.2 12.4 11.3 2.0 1.9 10.2 1.6 1.4 5.6 Life and Savings 5.2 5.4 4.8 5.1 5.1 4.5 3.1 Health 3.3 2.8 2.7 2.0 2.2 1.9
Slide 14: 1. Insurance: Targets
Insurance Asset Management 1. Insurance: Targets Distribution Credit P&C Expense Ratios2 Premiums Including growth of Smart direct NISb P&C Health Life 4.2-4.8 % of premiums % of AUM 3.7 3.2 2019 4.10% 5.57% 0.50% 2.9 2020 5.08% 5.82% 0.49% 2021 4.40% 5.50% 0.41% 2022 3.53% 5.00% 0.40% 2020 2021 202
Slide 15: 2. Asset Management: Full Range of Solutions
Insurance Asset Management 2. Asset Management: Full Range of Solutions Distribution Credit ETFs & Active Mutual Discretionary Brokerage Alternative Pension Provident Executive Private Savings Passive Funds Funds Portfolios Accounts Investments Funds Funds Insurance Policies Market Broad set of Prop
Slide 16: 2. Asset Management: AUM Growth
Insurance Asset Management 2. Asset Management: AUM Growth Distribution Credit Assets Under Management NISb 369 371 117 111 Provident Asset 234 Management 215 53 67 Pension 35 (off balance sheet) 178 34 37 30 31 70 66 Investment Services 24 56 52 45 97 95 Insurance and Savings Policies Insurance 71
Slide 17: 2. Asset Management: Targets
Insurance Asset Management 2. Asset Management: Targets Distribution Credit Group AUMs Pension & Provident Contributions Investment Services Revenues Expense Ratio: Pension & Provident NISb NISb NISm % of AUM 450-550 18-20 700-800 44 2019 0.24% 369 371 296 571 13.1 502 2020 0.16% 252 463 234 10.8 20
Slide 18: 3. Distribution (Agencies): Stand-Alone Value
Insurance Asset Management 3. Distribution (Agencies): Stand-Alone Value Distribution Credit Phoenix Holdings 79.4% 20.6% Management Agency Revenues NISm 900-1000 Phoenix Agencies 769 635 Agam Shekel Oren Mizrach Quality Others 100% 100% 70% 50.5% >50% 480 Restructuring in December 2022 to accelerat
Slide 19: 4. Credit: Building Group Activities
Insurance Asset Management 4. Credit: Building Group Activities Distribution Credit Phoenix Holdings has several credit activities - publicly traded Gama is the primary platform and is included in Group Credit Activities the Credit Segment, but in addition several other NISb activities provide credi
Slide 20: Positioned for 2023 Resilience, Growth & Value Creation
Positioned for 2023 Resilience, • Ongoing value creation from strategic execution and unlocking of value • Well positioned for continued volatility in 2023, with strong balance Growth & sheet & liquidity; assessing strategic opportunities; dynamic investment management for risk-adjusted returns (e.g
Slide 21: Agenda
Agenda Highlights Strategy & Targets Financial Results Segment Breakdown Appendix Glossary | 21
Slide 22: Q4 2022 Income by Segment
Q4 2022 Income by Segment Comprehensive income before tax Q4 2022, NISm 25 1 69 53 (221) 16 113 526 (30) 115 172 Positive contribution from all segments 213 P&C Health Life Other Equity Pension and Investment Agencies Credit Other Tax Miniority Q4/22 Returns Provident Services +69 Asset Management +
Slide 23: Q4 2022 Income by Source
P&C Q4 2022 Income by Source Health Life Other Equity Returns Pension and provident AM Comprehensive income before tax Agencies Q4 2022, NISm Credit Other 256 777 60 126 (43) 106 70 71 63 526 25 1 (14)(15) 71 286 58 17 168 221 Tax 69 Miniority (1) 50 30 Insurance Pension Investment Agencies Credit O
Slide 24: 2022 Income by Segment
2022 Income by Segment Comprehensive income before tax 2022, NISm 73 6 611 300 (401) (845) (93) 1,124 235 89 1,120 29 P&C Health Life Other Equity Pension and Investment Agencies Credit Other Tax Miniority 1-12/22 Returns Provident Services +324 Asset Management +915 +703 Insurance Additional core b
Slide 25: 2022 Income by Source
P&C Health 2022 Income by Source Life Other Equity Returns Pension and provident AM Comprehensive income before tax Agencies 2022, NISm Credit Other 73 6 4 181 1,618 278 (522) 1,645 71 14 14 18 64 171 264 1,172 96 (68) (178) 1,124 287 296 821 Growth in pre-tax profit from operations 215 (1,219) 401
Slide 26: Strong Balance Sheet
Financial Liabilities (NISm) Strong Balance Sheet Bonds and Loans CPI Floating Fixed linked interest interest Total Difference Phoenix Holdings NISm 31/12/2021 31/12/2022 12/21-12/22 Holdings Solo* 837 397 297 1,531 Cash 2,154 3,440 1,286 Insurance Tier 1 capital 211 211 Intangible Assets 2,775 2,99
Slide 27: Agenda
Agenda Highlights Strategy & Targets Financial Results Segment Breakdown Appendix Glossary | 27
Slide 28: P&C
P&C P&C Health Life Other Pension Investment Agencies Credit Equity Provident Services Other Comprehensive Income Before Tax NISm • 16% growth in premiums overall, driven by agencies Underwriting Q1-Q3 Q4 2022 and Smart direct business Profit 287 • Improved underwriting Compulsory Motor 70 91 161 pr
Slide 29: Health
Health P&C Health Life Other Pension Investment Agencies Credit Equity Provident Services Other Comprehensive Income Before Tax NISm • Improvement in underwriting profit, which includes primarily 71 medical & travel insurance as well as long-term care runoff • Income from release of LAT reserves due
Slide 30: Life and Savings
Life and Savings P&C Health Life Other Pension Investment Agencies Credit Equity Provident Services Other Comprehensive Income Before Tax NISm • Higher underwriting profit mainly due to increased fees & updated 14 annuity factors; underwriting profit includes primarily life risk policies, savings po
Slide 31: Other Equity Returns (Insurance)
Other Equity Returns (Insurance) P&C Health Life Other Pension Investment Agencies Credit Other EquityProvident Services Comprehensive Income Before Tax NISm 374 • Negative impact of financial markets (1,219) • Financial margin increase (845) due to CPI index changes compared to 2021 Financial Inves
Slide 32: Asset Management: Pension & Provident
Asset Management: Pension & Provident P&C Health Life Other Pension Investment Agencies Credit Equity Provident Services Other Comprehensive Income Before Tax NISm • Continued organic growth (21) 14 • Improvement in profit from operations due to synergies from Halman- Aldubi acquisition and 96 89 ec
Slide 33: Asset Management: Investment Services
Asset Management: Investment Services P&C Health Life Other PensionInvestment Agencies Credit Equity Provident Se rvic e s Other Comprehensive Income Before Tax • Phoenix Investment House (formerly Excellence) NISm • Performance improvement from strategic execution & improved margins 64 • Includes p
Slide 34: Agencies
Agencies P&C Health Life Other Pension InvestmentAgencies Credit Equity Provident Services Other Comprehensive Income Before Tax NISm • Increased profit from operations driven by continued strategic execution, 4 18 with strong organic growth and scale economies; profit from operations includes multi
Slide 35: Credit (Gama only)
Credit (Gama only) P&C Health Life Other Pension Investment Agencies Credit Other Equity Provident Services Credit Portfolio Comprehensive Income Before Tax NISm, without credit cards NISm • Publicly traded Gama includes SME +132% credit as well as SME credit card clearing & financing solutions and
Slide 36: Other
Other P&C Health Life Other Pension Investment Agencies Credit Other Equity Provident Services Comprehensive Income Before Tax NISm • Segment includes Phoenix Holdings solo profits (including RT1 (25) holding) as well as other 31 items • Financial margin increase mainly due to 6 CPI index changes Fi
Slide 37: Agenda
Agenda Highlights Strategy & Targets Financial Results Segment Breakdown Appendix Glossary | 37
Slide 38: Active Solvency & Capital Management
Active Solvency & Capital Management Economic Capital / Solvency (Insurance Company) Solvency II implementation Cashflow and Liquidity • Solvency II implemented in Israel in line with international (Holding Company) Solvency ratio1 standards, with strong regulatory oversight • Phoenix Insurance divi
Slide 39: Strategy Execution – Examples 2020-22
Strategy Execution – Examples 2020-22 Value Drivers 1 2 3 4 Accelerated Growth Innovation & Active Management Capital Management Efficiency Growth Engines • P&C • Data & machine learning • Divest control Ad-120 • Solvency & capital Insurance • Travel • Products / apps • Option plan optimization • Sa
Slide 40: Phoenix Holdings – Highlights
Phoenix Holdings – Highlights Unique opportunity in a growing, underpenetrated market with barriers to entry 1 Strong demographic & wealth trends with high compulsory savings rates & potential for greater penetration, macro resilience during 2020-22 Strong market position with distinctive growth & p
Slide 41: Reclassification – Explanation
Reclassification – Explanation Below is an explanation of reclassifications effecting the Health and P&C segments: • Health: As of 2022 Q1 financials, the Health segment reclassified earnings within the segment’s internal breakdown, primarily between underwriting and investment income due to the use
Slide 42: Agenda
Agenda Highlights Strategy & Targets Financial Results Segment Breakdown Appendix Glossary | 42
Slide 43: Glossary
Glossary AM Asset Management; i.e. Excellence Nessuah AUM Assets Under Management; the total market value of all the investments that are managed by the Group Bps Basis Points; 1 basis points is .01% CGU Cost Generating Unit CI Comprehensive Income CLR Combined Loss Ratio CO Corporate, Other and Con
Slide 44: Glossary
Glossary MF Management Fees; wages charged by a financial manager Moody’s A credit risk rating agency MSCI Morgan Stanley Capital International Emerging Markets Index; measures the performance in equity markets, specifically in global emerging markets Mutual Fund Open end, non-tradable basket of sec