Harel Insurance Investments & Financial Services Ltd. · TASE:HARL
Harel Insurance Investments & Financial Services — H1 2024 Earnings Presentation
32 slides from Harel Insurance Investments & Financial Services's earnings presentation, Aug 29, 2024
Slide 1: Summary of Financial Results H1.2024
Summary of Financial Results H1.2024 August 29, 2024
Slide 2: Agenda
Agenda Key messages Strategy Financial overview Appendix 2
Slide 3: Largest insurance and finance group in Israel
Harel Insurance Investments and Financial Services Largest insurance and finance group in Israel S&P Maalot Premiums and Deposits* Shareholders’ Equity AUM NIS B NIS B NIS B ilAA+/Stable 10.6 20.5 8.6 463 Harel Insurance Q2.24 H1.24 Midroog 30.06.24 30.06.24 Aa1.il stable Harel Insurance Comprehensi
Slide 4: Key Messages H1.24
H2.24 comprehensive H1.24 comprehensive income is NIS 125 M, similar to the income despite Q2.24 loss corresponding period last year, despite a loss of NIS 108 M in Q2.24 due to a real negative Nostro yield in the quarter Underwriting profit from insurance activity increased by Growth in underwritin
Slide 5: H1.24: Growth in AUM
H1.24: Growth in AUM AUM NIS B 59% 462.6 427.7 44.9 45.0 362.3 363.1 61.9 39.6 61.3 4.4 40.5 291.2 3.9 94.4 62.2 58.5 35.8 82.6 2.1 3.2 20.5 54.6 58.9 58.2 19.3 1.4 19.3 19.3 52.1 166.7 16.4 150.6 126.4 128.2 86.6 52.9 56.1 65.0 69.8 44.3 2020 2021 2022 2023 30.6.24 Provident Pension Investment Cont
Slide 6: H1.24: Leading in premiums and deposits
H1.24: Leading in premiums and deposits Premiums and deposits* NIS B 39.4 37.5 2.9 33.0 3.9 29.9 3.9 2.5 18.7 8.2% 16.5 13.8 20.5 12.4 19.0 2.2 1.4 7.8% 4.7 5.0 3.9 4 8.7 10.3 10.6 9.8 5.9 6.5 0.7 1.1 5 5.4 2.4 2.6 4.4 5.3 3.1 2.4 6.5 1.2 1.3 6.1 5.9 6.3 1.6 3.4 3.0 1.2 1.9 1.7 2020 2021 2022 2023 H
Slide 7: Agenda
Agenda Key messages Strategy Financial overview Appendix 7
Slide 8: Strategic Focus
Strategic Focus Improving Diversifying Profitability and Revenues Leveraging scale for material and permanent improvement of insurance profitability and revenue diversification 8
Slide 9: Harel 2026
Harel 2026 Our targets: Another quarter of improvement in adjusted profit from core business inline with strategic focus Increase in insurance underwriting profit Increase in total adjusted profit from core business NIS M NIS M Total adjusted profit 2,217 AM, credit and other Underwriting profit 813
Slide 10: Harel 2026 targets: AUM, premiums, fee income
Harel 2026 הראל 2026 Our targets: AUM NIS B Premiums and Deposits* NIS B Fee Income NIS B 520 43.8 1.91 463 37.5 39.4 428 1.47 1.53 363 20.5 0.85 2022 2023 30.6.24 2026 2022 2023 H1.24 2026 2022 2023 H1.24 2026 See Appendix for key forecast assumptions *Gross premiums earned and contributions to p
Slide 11: Agenda
Agenda Key messages Strategy Financial overview Appendix 11
Slide 12: Composition of comprehensive income Q2.2024
Composition of comprehensive income Q2.2024 NIS M 335 70 29 Underwriting profit Asset management Credit (Insurance) 438 (642) (104) (108) (204) (7) (122) (722) Life Health Non-life Investment Provident Pension Finance Credit Equity and Adjusted Investment Interest Special Comprehensive Tax Minority
Slide 13: Composition of comprehensive income H1.2024
Composition of comprehensive income H1.2024 NIS M 606 132 59 Underwriting profit Asset management Credit (Insurance) 829 (667) (157) 162 (30) (7) (731) 132 125 Life Health Non-life Investment Provident Pension Finance Credit Equity and Adjusted Investment Interest Special Comprehensive Tax Minority
Slide 14: H1.24: Growth in adjusted profit vs H1.23
H1.24: Growth in adjusted profit vs H1.23 Underwriting Improvement H1.24 vs H1.23 Change in adjusted profit in H1.24 vs H1.23 NIS M before tax NIS M 1-6/24 1-6/23 change Health 353 132 221 Life 124 221 (97) Non-life 129 57 72 Total 606 410 196 196 (40) 829 644 1-6/23 Adjusted profit Underwriting Ass
Slide 15: Health: Significant underwriting improvement
Health: Comp. Income before tax Significant underwriting improvement Change in Comprehensive Income before tax: Health: Change in comprehensive income H1.24 vs H1.23 NIS M before tax • Growth in underwriting profit mainly in long-term care and long-term health led to an improvement in +122 comprehen
Slide 16: Improvement in LT Health and in Long-Term Care
Health: Underwriting Improvement in LT Health and in Long-Term Care NIS 221 M underwriting improvement: Health: Breakdown of underwriting profit NIS M Long-term health: underwriting improvement in cover for transplants, ambulatory care and personal accidents, due to fewer claims and a decrease in cl
Slide 17: Life: Negative impact of investment income and War
Life: Comp. Income before tax Negative impact of investment income and War Life: Change in comprehensive income H1.24 vs H1.23 NIS M before tax Change in Comprehensive Income before tax: • Lower underwriting profit mainly in Q2.24 due to (199) increase in the number and amounts of claims in cover fo
Slide 18: War impact on risk profitability and increase in PHI claims
Life: Underwriting War impact on risk profitability and increase in PHI claims Life: Breakdown of underwriting profit NIS M NIS 97 M decrease in underwriting profit: +205 • Increase in number of risk claims personal and 221 group, due to the War. The effect of the War was (97) NIS 39 M in H1.24 (abo
Slide 19: Non-life: Growth in underwriting profit, lower interest rate impact
Non-life: Comp. Income before tax Growth in underwriting profit, lower interest rate impact Change in Comprehensive Income before tax Non-life: Change in comprehensive income H1.24 vs H1.23 NIS M before tax • Underwriting improvement across most sectors +100 • Positive real nostro yield in H1.24 com
Slide 20: Underwriting improvement, mainly in motor property
Non-life: Underwriting Underwriting improvement, mainly in motor property Non-life: Breakdown of underwriting profit NIS M NIS 72 M underwriting improvement: Compulsory motor: decline in underwriting profitability due to negative developments in +72 previous years, mainly for groups whose contracts
Slide 21: Continuous growth in AUM and profitability
AM: Adjusted profit Continuous growth in AUM and profitability Change in adjusted profit*: AM: Breakdown of adjusted profit NIS M before tax 132 114 Pension and Provident: increase in management 105 fees driven by increase in AUM AUM NIS B 30.6.24 31.12.23 % change 39 46 43 46 23 20 31 30 37 Pension
Slide 22: Diverse and growing credit activity
Credit: Comp. income before tax Diverse and growing credit activity Change in Comprehensive Income: Comprehensive income NIS M before tax 59 • The increase in comprehensive income in H1.24 48 compared with H1.23 is due to activity growth and higher financial margin 21 24 13 16 The credit segment con
Slide 23: Harel Insurance: Increase in Solvency Capital Ratio
Harel Insurance: Increase in Solvency Capital Ratio Solvency Capital Ratio at Harel Insurance With transitional measures Without transitional measures The Solvency Capital Ratio of Harel Insurance at December 31, 2023 without transitional measures increased to 138% and capital surplus is NIS 3.8 B,
Slide 24: Harel Investments: Financial stability and consistent dividend policy
Harel Investments: Financial stability and consistent dividend policy Shareholders’ Equity NIS B Dividend in Harel Investments including share repurchase NIS M share repurchase 644 8.9 8.9 8.6 dividend Dividend 8.4 7.8 474 200 6.9 397 6.2 NIS M 29.8.24 221 236 550 COVID 357 400 19 214 236 67 2018 20
Slide 25: To Summarize
Comprehensive NIS 125 M profit despite a loss of NIS 108 M in Q2.24, mainly due to income in H1.24 the negative effect of the capital market We continue to pursue a material and permanent improvement in Strategy underwriting profitability, mainly in accuracy and controls in the implementation To cla
Slide 26: Thank You
Thank You For further information: https://pr.harel-group.co.il/
Slide 27: Agenda
Agenda Key messages Strategy Financial overview Appendix 27
Slide 28: Health reform: Summary of key points
Health reform: Summary of key points June 2024 Surgeries Between the insurance companies Surgeries Prevention of Change of policy Supplemental and HMOs Full coverage double coverage terms and coverage policyholders transfer Providing a fixed 10 years discount compared with current 3 years 1. Basic L
Slide 29: Health reform: What has actually happened
Health reform: What has actually happened About 78% Full coverage premium Surgeries premiums unchanged Of full coverage customers Increased based on the Overall no material change moved to supplemental policyholders’ age compared with pre- reform coverage Decline in cancellations 5 years Continued l
Slide 30: Calculation Principles
Calculation Principles Insurance Asset Management Credit and Other Hamazpen Life Insurance Pension Funds Development Property Financing Health Insurance Provident Funds Harel 60+ Non-life Insurance Finance Financial Guarantees Investment Contracts Agencies Equity Underwriting Profit: profit from the
Slide 31: Our Global Partners
Our Global Partners @ swissRe & Ww cS ‘Berkley QBE TOKIOMARINE SOMPO JAPAN CHUBB B HDI ZURICH 0 fy SUKOON. GERLING Ss RSA 3 INSURANCE ®& CHINA RE Allianz @) aA wu eahis ee SS STARR @é @ INSURANCE COMPANIES
Slide 32: Disclaimer
This presentation was prepared solely for the purpose of convenience and brevity and it contains partial information in relation to the Company’s results in the periods specified therein. This presentation should not be construed as an offer to purchase the Company’s securities or an invitation to a
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