Phoenix Financial Ltd · TASE:PHOE
Phoenix Financial — The Phoenix Holdings — Q1 2021 Earnings Presentation
36 slides from Phoenix Financial's earnings presentation, May 2021
Slide 1: 2021 Q1 Phoenix Holdings Quarterly Financial Review
2021 Q1 Phoenix Holdings Quarterly 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 i
Slide 3: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary |3
Slide 4: Phoenix Holdings at a Glance
Phoenix Holdings at a Glance Leading Israeli insurance, asset management & TA35 index 8.1 NISb financial group Since 2018 Market cap(1) A long history of proven and recognized 70+ AA- / AA+ experience Years of activity Holding / Insurance Rating >3m Top Ranked Trusted by millions of customers Client
Slide 5: 2021 Q1 Highlights: Continued Strength
2021 Q1 Highlights: Continued Strength 19.1% 356NISm 264NISb 8.0NISb 192% Comprehensive ROE AUM 1 Equity Solvency II 2 Profit Strong performance and momentum for 2021 (1) Including acquisition of Haldman-Aldubi, non including Halman’s corporate fund of 46 NISb (2) Audited, as of December 31, 2020 wi
Slide 6: Strong Performance from Broad Activities
Strong Performance from Broad Activities Comprehensive Profit NIS millions 1,353 Investments & interest rates Insurance* » Strong underwriting and investment (P&C, LTS, Health, Ad-120) 569 performance during quarter Core Fee Businesses (Agencies, Excellence, Gama) » Diverse sources of profit 664 224
Slide 7: Long-Term Equity Generation
Long-Term Equity Generation Shareholders Equity 1 NISb 9.0 » Robust dividend paid in +12.4% p.a. March based on 2020 8.0 8.0 0.4 performance, in line with 6.4 6.6 7.6 dividend policy 5.7 4.8 » Growth in shareholder 4.1 equity, returning to 8.0 NISb 3.8 » Post report date, resumed implementation of s
Slide 8: On Track or Above Mid-term Targets
On Track or Above Mid-term Targets AUM Equity NISb NISb 9.0 1 2 310 300 8.0 8.0 234 46 6.6 214 7.6 264 252 Dividend 30% of profits 2019 2020 Q1/2021 Mid-term Target 2019 2020 Q1/2020 Mid-term target 4 480 3 406 - 300 Dividend with buyback (NISm) Comprehensive Profit ROE NISm 1,353 1,000 19.1% 829 18
Slide 9: Continued Strategy Implementation: Value Drivers
EXAMPLES Continued Strategy Implementation: Value Drivers 1 Accelerated growth in high-ROE activities 2 Innovation and efficiency P&C: growth in premium rate despite decrease in industry Digitization: completion of digital production project; digital average; increase in Phoenix SMART direct sales m
Slide 10: Acquisition of Halman-Aldubi Completed
3 Acquisition of Halman-Aldubi Completed Value Driver: Active Portfolio Management Halman-Aldubi mid-sized Israeli investment house Description Key activity is asset management with 23 NISb AUM, primarily in long-term savings Positions the Phoenix as a leader in the growing long-term savings industr
Slide 11: Looking Ahead
Looking Ahead Manage next Covid-19 phase carefully and proactively Priorities Continue strategic plan implementation for next Accelerated growth quarters Innovation & efficiency Active portfolio management, including Gama IPO and Ad-120 divestment Optimized capital deployment ongoing volatility redu
Slide 12: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 12
Slide 13: Q1 2021 Comprehensive Income – Breakdown
Q1 2021 Comprehensive Income – Breakdown Strong quarterly performance Comprehensive Income Drivers (NISm) across activities 52 -25 -181 P&C and LTS/Life businesses 30 continued to drive group income, 290 with strong operating and investment results -11 356 Strong capital market 178 23 performance co
Slide 14: Significant Improvement From Q1 2020
Significant Improvement From Q1 2020 Q1/20 vs Q1/21 Comprehensive Income Drivers (NISm) Strong quarterly performance across most activities +933 507 490- Overall improvement from (577) 356 24- 18 2 NISm loss to 356 NISm profit, driven by significant 546 improvement in P&C and LTS/Life primarily due
Slide 15: PBT (Profit Before Tax) Improvement from 2020
PBT (Profit Before Tax) Improvement from 2020 P&C LTS Agencies Q1/20 vs Q1/21 (NISm) Health CO +39 195 +136 548 Improvement in investments, 73+ 31+ 24- 18+ underwriting stable 1,231 +133 205- 11- (30) Q1/21 profit before tax totaled 373+ 548 NISm compared to Q1/20 loss of 873 NISm, driven primarily
Slide 16: Growth in Premiums & Benefit Contributions
Growth in Premiums & Benefit Contributions Premiums, Benefit Contributions, & Investment Contracts* (NISb) Growth driven by P&C and LTS 21.4 Continued strategic focus on risk- 2.8 19.2 18.1 adjusted returns and growth of high-ROE 17.5 2.3 businesses 2.5 15.4 4.1 2.9 P&C: strong growth compared to fi
Slide 17: Insurance Expense KPIs
Insurance Expense KPIs Initial implementation of strategy, including 2021 Q1 2020 Q1 2020 expense reduction, efficiency, and growth P&C Expenses / Gross Earned Premiums 4.5% 4.7% 5.1% Additional efficiency Health Expenses / Gross Earned Premiums 5.7% 5.9% 5.9% planned with ongoing implementation Lif
Slide 18: Solvency II
Solvency II Solvency II Ratio With Transitional Measures (December 31, 2020) Solvency results, NISm 2019 2020 Change Target SCR (1) 7,456 6,662 -794 Tier 1 Capital 8,767 9,440 673 Tier 2 Capital 3,540 3,331 -209 Total Capital (2) 12,307 12,771 464 Excess Capital 4,851 6,109 1,258 Solvency II Ratio (
Slide 19: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 19
Slide 20: P&C Comprehensive Income Drivers (Pre-tax, NISm)
P&C Compulsory motor Motor property P&C Health LTS AM Agencies CO Property and others Liability Comprehensive Income Drivers (Pre-tax, NISm) Improvement due to underwriting +401 as well as investments 178 -11 0 Increase of 373 NISm in investment income in Q1/21 compared to the corresponding +373 per
Slide 21: Health
Health P&C Health LTS AM Agencies CO Comprehensive Income Drivers (Pre-tax, NISm) Decrease in comprehensive profit -27 due to LAT reserve changes 50 9 -48 23 105 Decline in underwriting profit due to one- time changes in 2020 -166 73 Improved investment performance due to losses and uncertainty duri
Slide 22: LTS (Life & Long-Term Savings AM)
LTS (Life & Long-Term Savings AM) P&C Health LTS AM Agencies CO Comprehensive Income Drivers (Pre-tax, NISm) Performance improvement driven by investments +546 290 5+ 5+ Life Strong results in Life compared to previous period due to stronger investment performance 536+ Variable management fees were
Slide 23: LTS - Life
LTS - Life P&C Health LTS AM Agencies CO Life Profit Drivers (NISm) Strong performance in quarter +536 Total profit increase in Q1/21 of NIS 276 94 M compared to a NIS 260 M loss in Q1/20 39 276 Investment in the reporting period 264 compared to last period increased mainly due to the increase of NI
Slide 24: LTS - Pension and Provident
LTS - Pension and Provident P&C Health LTS AM Agencies CO Comprehensive Income (Pre-tax, NISm) +10 Growth in comprehensive 14 income mainly from investments and Gmula +7 (runoff product) profit 2- +6 Increase in benefit contributions 4 7- and collection of management +6 fees Stable expenditure rate,
Slide 25: AM (Excellence Investment House)
AM (Excellence Investment House) P&C Health LTS AM Agencies CO Operating Profit Drivers (NISm) -24 Lower profit due to 54 lower trading volumes 9- 1- 8- 7- 30 Investment management: 1+ lower investment management profit compared to high 15 NISm earnings in 2020 Q1 from high volume market making 1-3/
Slide 26: Agencies
Agencies P&C Health LTS AM Agencies CO Comprehensive Income Drivers (Pre-tax, NISm) +18 High comprehensive profit (17) mainly due to growth in sales 52 38 (3) Comprehensive income increase to 34 52 NISm in Q1/21 compared to 34 NISm income in Q1/20 Most of the increase in profit stems from growth, a
Slide 27: CO
CO P&C Health LTS AM Agencies CO Operating profit by source (Pre-tax, NISm) Increase in profit driven by capital market +507 Investments 5- 2+ -25 The increase in investment income in the reporting period compared to Q1/20 stems primarily from capital market 511+ returns, which were lower Q1/20 comp
Slide 28: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 28
Slide 29: Market Indices Compared to 2020 Q1
Market Indices Compared to 2020 Q1 Main Market Indices CPI / FX Stocks Bonds 7.8% 7.0% 6.1% 5.8% Israeli and 3.2% 3.7% 3.6% 2.2% international market 0.1% 0.5% volatility Q1/20 and (0.5%) Q1/21 (2.1%) (3.3%) (5.0%) Market performance drove improvement in income (9.1%) from investments Improvement ac
Slide 30: Strong Yields Across Phoenix Investments
Strong Yields Across Phoenix Investments Nostro OPM 4.7% 4.3% 4.1% 2.6% 1.9% 1.6% Q1/21 financial 0.2% market recovery and (0.8%) low global interest (1.8%) rates generated improved returns (4.6%) Nostro acceleration in income from investments (7.8%) OPM profitability increase (11.2%) (11.1%) in pol
Slide 31: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 31
Slide 32: 2021 Q1 Balance Sheet Highlights
2021 Q1 Balance Sheet Highlights Assets Liabilities & Equity NISb NISb Tax & 125.2 125.2 other Cash 2.2 Accounts 8.1 Total equity1 Other 11% payable Other assets2 13.2 financial 24% Diversified Investments 11.9 Other liabilities liabilities 15% 11.9 Other Alternatives & Financial NISb 27.5 insurance
Slide 33: Agenda
Agenda Highlights Financial Results Segment Breakdown Investments Appendix Glossary | 33
Slide 34: 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 35: 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
Slide 36: 2021Q1 Phoenix Holdings
2021Q1 Phoenix Holdings Quarterly Financial Review Please contact us at: IR@fnx.co.il