Harel Insurance Investments & Financial Services Ltd. · TASE:HARL
Harel Insurance Investments & Financial Services — 9M 2023 Earnings Presentation
29 slides from Harel Insurance Investments & Financial Services's earnings presentation, Nov 28, 2023
Slide 1: Summary of Financial Results 9M.23
SUMMARY OF FINANCIAL RESULTS For the Period 9M.23 | November 28, 2023
Slide 2: Disclaimer
This document has been prepared by Harel Insurance Investments and Financial Services Ltd. (hereinafter: the Company) solely for the purpose of presenting the Company's business. The information contained in this document has not been independently verified. No representation or warranty has been ex
Slide 3: Iron Swords: Message from the Chairman
IRON SWORDS Message from the Chairman Israel is currently facing one of the most difficult, if not the most difficult, periods in the nation’s history The horrific terror attack launched on October 7, the festival of Simchat Torah, shocked the entire country and Israeli society, and the aftereffects
Slide 4: The Big Picture
THE BIG PICTURE Data at September 30, 2023 29.1 412 NIS bn, 9M.23 NIS bn 167% At June 30, 2023 Aa2.il GROSS PREMIUMS ASSETS UNDER SOLVENCY RATIO HAREL INVESTMENTS EARNED, MANAGEMENT Including the transitional Midroog Benefit Contributions and provisions amounts received for Aa2 RATING Over HAREL INV
Slide 5: Key Highlights for the Period
KEY HIGHLIGHTS FOR THE PERIOD CONTINUOUS In Q3.23 shareholders’ comprehensive income was NIS 271 million, reflecting ROE of 13%, PROFITABILITY compared with a loss of NIS 249 million in Q3.22. In 9M.23 shareholders’ comprehensive income GROWTH was NIS 397 million compared with a loss of NIS 359 mill
Slide 6: Profit Also Given Zero Real Yield
PROFIT ALSO GIVEN ZERO REAL YIELD Total Profit (Loss) Excluding Special Items* (NIS m) Nostro Yields For The Periods 274 406 197 77 Q3.22 Q3.23 9M.22 9M.23 5-Y Average (247) 2018-2022 (425) (355) Nominal Nostro Yield (0.1%) 0.8% (0.1%) 3.2% 4.7% Real Nostro Yield (1.4%) 0.0% (4.5%) 0.0% 3.0% (1,246)
Slide 7: Continuous Activity Growth
CONTINIUOUS ACTIVITY GROWTH Gross Premiums Earned, Benefit Contributions And Amounts Received For Investment Contracts (NIS bn) +14% 33 37.5 3.9 +3% 9M.23 vs. 9M.22: Pension and 3.9 4.7 28.2 29.1 Provident Deposits +13% +9% 2.2 3.8 3.3 Health Insurance +7% 3.5 11.8 3.4 10 10.0 Non Life Insurance +7%
Slide 8: NIS 412 Billion AUM
NIS 412 BILLION AUM 412 15 362 363 63 16 15 Continuous Growth in AUM 75% 43 43 283 291 62 15 13 53 56 235 44 39 13 44 34 45 126 128 144 since 2018 39 87 76 62 124 121 128 103 108 87 2018 20199 2020 2021 2022 YTD9.23 30.9.23 INSURANCE PENSION FUNDS PROVIDENT FUNDS MUTUAL FUNDS PORTFOLIO MANAGEMENT AN
Slide 9: Another Quarter of Profitability Growth
ANOTHER QUARTER OF PROFITABILITY GROWTH Comprehensive Income (Loss) After Tax Attributed To The Shareholders (NIS m) 282 271 33 93 (249) Q3.22 Q4.22 Q1.23 Q2.23 Q3.23 Return on Equity (In Annual Terms) 14% 13% 2% 4% (12%) Q3.22 Q4.22 Q1.23 Q2.23 Q3.23 9
Slide 10: Key Drivers of Q3.23 Profit
KEY DRIVERS OF Q3.23 PROFIT Composition Of Comprehensive Income Before Tax (NIS m) Improved real yields in Nostro portfolio compared with corresponding period in 2022: zero yield in Q3.23 compared with negative yield in Q3.22 Underwriting improvement in the following: Compulsory motor and motor prop
Slide 11: Key Drivers of 9M.23 Profit
KEY DRIVERS OF 9M.23 PROFIT Composition Of Comprehensive Income Before Tax (NIS m) Improved real yields in Nostro portfolio compared with corresponding period in 2022: zero yield in 9M.23 compared with negative yield in 9M.22 Underwriting improvement in the following: Compulsory motor and motor prop
Slide 12: Life Assurance: Improved Yields Led to Improved Profitability
LIFE ASSURANCE | IMPROVED YIELDS LED TO IMPROVED PROFITABILITY In 9M.23 premiums amounted to NIS 4.9 billion, down 2.9% compared with the Life Assurance: Profit (Loss) Before Tax (NIS m) corresponding period last year, due to a decrease of lump sum deposits The improved profitability in Q3.23 and 9M
Slide 13: Pension and Provident: Continuous Growth in AUM
PENSION AND PROVIDENT| CONTINOUS GROWTH IN AUM Pension: Profit Before Tax(NIS m) Pension: 91 Continuous growth in AUM. 57 45 56 144 NIS bn In 9M.23 benefit contributions increased by 16.7% compared AUM with 9M.22 and amounted to 14 18 +13% from YE22 NIS 10 bn 2021 2022 9M.22 9M.23 Q3.22 Q3.23 Provid
Slide 14: Health: Underwriting Improvement in Group Policies and Medication Cover
HEALTH | UNDERWRITING IMPROVEMENT IN GROUP POLICIES AND IN MEDICATION COVER Health Insurance : Profit (Loss) Before Tax (NIS m) In 9M.23 premiums grew by 9.4% to NIS 4.8 billion, compared with 9M.22 798 Results in 9M.23 were affected, among others, by improved underwriting 535 in group policies and
Slide 15: Non-Life: Underwriting Improvement in Motor Continues
NON-LIFE | UNDERWRITING IMPROVEMENT IN MOTOR CONTINUES Non-Life Insurance: 9M.23 Profit (Loss) Before Tax (NIS m) 9M.22 34 NIS m 9M.23 227 NIS m In 9M.23 premiums grew by 7.4% to NIS 3.7 billion compared 172 140 with 9M.22 94 74 23 9 17 Underwriting improvement in 9M.23: (19) (39) In compulsory moto
Slide 16: Financial Services: Growth in AUM, Revenues and Profitability
FINANCIAL SERVICES | GROWTH IN AUM, REVENUES AND PROFITABILITY Financial Services: Revenues and Profit Before Tax (NIS m) 63NIS bn Mutual Funds +45% from YE22 254 264 253 78 NIS bn AUM +33% from YE22 15 NIS bn 186 Portfolio Management and Other* -2.7% from YE22 96 78 73 58 65 48 Growth in Mutual Fun
Slide 17: Equity and Dividends
EQUITY AND DIVIDENDS Dividend Policy 35% From annual 30% From annual profit in Harel profit in Harel Insurance Investments 8.9 8.4 8.8 Equity 7.8 (NIS billions) 6.9 5.8 6.2 4.8 5.1 5.4 4.2 4.5 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD9.23 30.9.23 2. 9 2 Dividend (incl. shares 64 308
Slide 18: Capital Surplus: Harel Insurance
CAPITAL SURPLUS| HAREL INSURANCE Including the transitional Without the transitional provisions provisions The Solvency Capital Ratio of Harel Insurance at June 30, 2023, without the transitional provisions is 126% and capital surplus is 169% 167% NIS 2.7 billion, compared with December 31, 2022, wh
Slide 19: Health Insurance Reform
Health Insurance Reform Overview of the Reform Impact on Harel 19
Slide 20: Key Reforms
2 Key Reforms: The Goal: To reduce personal expense on health services and encourage use of public health system and HMOs Applies on surgeries coverage only and prescribes it to be sold as “Surgeries Full Coverage” The under different terms and “Surgeries Supplemental Coverage” under similar to exis
Slide 21: Key Changes
Key changes: New product line Fixed Terms “Medical – Surgeries discounts for Unity Catastrophe” Supplemental 10 years coverage Coverage And mandatory In health and Of key coverages As basic transfer of critical illness mandatory policyholders from product 2016 The Arrangements Capital Market Capital
Slide 22: Premiums and Risk
Premiums and Risk Starting at October 2023 Surgeries Full Coverage: The Implication: : ראשוןprice Surgeries Full Coverage policies’ שקלwill ניתוחים פוליסות increase, which Insurance company will indemnify the HMOs explains the automatic conversion for the Surgeries Full for their share in pa
Slide 23: Health Policy Structure
Health Policy Structure Optional Layer Conditional Layer Acquired unrelated to other policies Acquired only on top of Basic Mandatory Layer existing basic layer 3 Unified Policy 2 Critical Illness Personal Accidents “Medical Catastrophe” Compensation Compensation Surgeries in Policy Policy Add ons t
Slide 24: Policies to be Affected by the Reform
Policies to be affected by the Reform Capital Market Authority Reform The Arrangements Law Reform Terms of health Policies sold between policies sold before February 2016 and February 2016 September 2023 Starting from October remain unchanged February September 2023 2016 In the next renewal date at
Slide 25: Harel: Health Premiums
Harel: Health Premiums Total Total Personal Lines Direct Impact of the Reform: Health Premiums Health Premiums Premiums for Surgeries Full NIS 5.9 bn NIS 2.1 bn Coverage from 2016 31.12.2022 31.12.2022 NIS 149 million 31.12.2022 According to the Arrangements Law Group Health Reform, in June 2024, Su
Slide 26: Harel's Competitive Advantages
Harel’s competitive advantages Professionalism Innovation Commitment Harel is active for about 20 years in Surgeries Supplemental Coverage policies Sales of Surgeries Supplemental Coverage comprised about 60% of new sales of Health policies in 2022-2023 As a result, Harel has obtained extensive expe
Slide 27: The Israeli Spirit Is Our Insurance
The Israeli spirit is our insurance ▪ Supporting dozens ventures, initiatives and associations since October 7th, 2023 ▪ Adopting Kibbutz Kefar Aza ▪ Encouraging and increasing employees’ volunteering ▪ Donating NIS millions so far 27
Slide 28: Our Global Partners
OUR GLOBAL PARTNERS @ Swiss Re CHUBB ®& CHINARE Allianz @) STAR INSURANCE COMPANIES 28 & QBE GERLING NY TOKIO MARINE @ ZURICH Zarich Insurance Company wd HARTFORD @
Slide 29: Thank You
Thank You
Harel Insurance Investments & Financial Services — 9M 2023 Earnings Presentation on 6ix