Harel Insurance Investments & Financial Services Ltd. · TASE:HARL
Harel Insurance Investments & Financial Services — H1 2025 Earnings Presentation
44 slides from Harel Insurance Investments & Financial Services's earnings presentation, Aug 28, 2025
Slide 1: Investor Presentation H1.2025
Investor Presentation H1.2025 28.8.2025
Slide 2: Agenda
Agenda Key messages Segments overview Strategy Appendix 2
Slide 3: Largest insurance and finance group in Israel
Harel Insurance Investments and Financial Services Largest insurance and finance group in Israel Comprehensive Income ROE Shareholders’ Equity S&P Maalot to shareholders, NIS M NIS B Q2.25 H1.25 Q2.25 H1.25 30.6.25 ilAA+/Stable Harel Insurance 789 1,332 29% 25% 11.1 Midroog 87% QoQ 94% HoH 18% Q2.24
Slide 4: H1.25 highlights
H1.25 highlights Increase in comprehensive income and in ROE • 87% increase in comprehensive income in Q2.25 to NIS 789 M, with ROE of 29%. 94% increase in comprehensive income in H1.25 to NIS 1.3 B, with ROE of 25% • Increase in comprehensive profit before tax in non-life insurance which amounted t
Slide 5: Increase in comprehensive income and ROE in Q2.25 and in H1.25
Increase in comprehensive income and ROE in Q2.25 and in H1.25 Comprehensive income attributed to shareholders ROE NIS M after tax 789 29% 423 18% 4-6.24 4-6.25 4-6.24 4-6.25 1,619 1,332 25% 17% 15% 600 687 7% (77) (1%) 2022 2023 2024 1-6.24 1-6.25 2022 2023 2024 1-6.24 1-6.25 IFRS 4 IFRS IFRS 17 17
Slide 6: New sales of growth products drive an increase in accumulated profit balance (CSM)
New sales of growth products in life and health drive an increase in accumulated profit balance (CSM) Increase of NIS 800 M in net CSM since transition Net CSM from growth products summed to NIS 11.6 B CSM net of reinsurance from life and health insurance as of 30.6.25 NIS B 16.7 16.5 16.5 16.7 2.1
Slide 7: New business continues to fuel long term value creation
New business continues to fuel long term value creation CSM roll forward during H1.25 NIS M About 34% of the CSM balance is expected to be released to profit in the next 5 years NIS B 267 100% 5.7 71 16,687 5.2 16,548 807 growth products )201( products in run off )199( 3.5 4.4 3.1 2.3 )606( 2.5 1.6
Slide 8: Comprehensive income by business lines H1.25 NIS M
Comprehensive income by business lines H1.25 NIS M NIS M H1.25 H1.24 CSM release 805 787 RA release 159 166 Other** (28) 56 Reinsurance (25) (117) Non-life, net 213 112 Underwriting profit (insurance service result) 1,124 1,004 Net investments and finance income (loss) 658 (89) Operating expenses )9
Slide 9: Increase in comprehensive income in H1.25
Increase in comprehensive income in H1.25 Total insurance profit H1.25 vs H1.24 NIS M H1.25 H1.24 change Health 553 623 )70( Change in comprehensive income before tax H1.25 vs H1.24 NIS M Life 548 (21) 569 Non-life 584 219 365 total 1,685 821 864 145 2,001 747 15 )3( )46( 120 1,023 864 \ Change in t
Slide 10: Under IFRS 17, a decrease in interest rates is expected to have a positive impact on the profit
Under IFRS 17, a decrease in interest rates is expected to have a positive impact on the profit Insurance contract groups under IFRS 17 include portfolios at asset Impact of interest rate curve on comprehensive position with positive Best Estimate (risk, medical expenses, critical income (loss) afte
Slide 11: Harel Insurance: Nostro portfolio breakdown and return
Harel Insurance: Nostro portfolio breakdown and return Breakdown of Nostro portfolio by asset classes (30.6.25) Real Nostro return Real estate (including own use) 2.5% 2.5% 2.1% Investments funds, 0.7% Infrastructure and PE 13.4% Credit and Corporate 9.0% bonds Tradable equities (0.6%) 4.4% 30.9% 39
Slide 12: Harel Insurance: Solid capitalization
Harel Insurance: Solid capitalization Solvency Capital Ratio at Harel Insurance • Solvency Capital Ratio of Harel Insurance at December 31, 2024 without transitional measures was 159%, considering Additional Tier 1 issuance after the report date and capital surplus was NIS 5.9 B With transitional me
Slide 13: Harel Investments: Transition to semi-annual dividend distribution
Harel Investments: Transition to semi- annual dividend distribution Dividend in Harel Investments Shareholders’ Equity NIS B including share repurchase NIS M 11.1 Dividend of NIS 400 M 9.9 share repurchase 926 for H1.25 8.9 8.3 8.9 dividend 7.8 474 464 397 800 357 400 67 400 2021 2022 2023 2024 30.6
Slide 14: Agenda
Agenda Key messages Segments overview Strategy Appendix 14
Slide 15: Stable underwriting profit and negative impact of interest rate curve in Q2.25 and H1.25
Health and Long-term care (LTC) Stable underwriting profit and negative impact of changes of the interest rate curve in Q2.25 and in H1.25 Health and LTC: Comprehensive income Health and LTC: Comprehensive income sources H1.25 NIS M sources Q2.25 NIS M 78 553 483 )8( 267 246 )16( )5( Underwriting Ne
Slide 16: Underwriting profit drivers in health: personal medical expenses and other
Health and Long-term care (LTC) Underwriting profit drivers in health: personal medical expenses and other- a year after the Reform Health and LTC: Breakdown of underwriting profit NIS M Personal lines medical expenses: Results in the current H1.24 H1.25 491 483 period were positively impacted by th
Slide 17: Increase in comprehensive income, material effect of investments and finance income
Life Increase in comprehensive income, material effect of investments and finance income in Q2.25 and in H1.25 Life: Comprehensive income sources H1.25 NIS M Life: Comprehensive income sources Q2.25 NIS M 180 548 )60( 428 224 364 )30( 170 Underwriting Net Operating Comprehensive Underwriting Net Ope
Slide 18: Underwriting improvement of risk products in H1.25
Life Underwriting improvement of risk products in H1.25, which are the main component of underwriting profit in life Life: Breakdown of underwriting profit NIS M 401 428 333 H1.24 H1.25 278 • Results in current period were positively affected by increase in activity of risk products (policies with n
Slide 19: Increase in underwriting profit and in comprehensive income
Non-life Increase in underwriting profit and in comprehensive income Non-life: Comprehensive income H1.25 NIS M Non-Life: comprehensive income Q2.25 NIS M 400 584 )29( 288 395 )21( 213 128 Underwriting Net Operating Comprehensive Underwriting Net Operating Comprehensive profit investments expenses i
Slide 20: Improvement in underwriting profit in non-life in Q2.25 and H1.25, mostly in motor
Non-life Improvement in underwriting profit in non-life in Q2.25 and in H1.25, mostly in motor Compulsory motor: Results in parallel period were Non-life: Breakdown of underwriting profit NIS M negatively impacted by a negative development in respect of H1.24 H1.25 prior years 213 158 161 Motor prop
Slide 21: AUM growth continues, increase in comprehensive income
Asset Management AUM growth continues, increase in comprehensive income AM: Breakdown of comprehensive income NIS M before tax H1.24 H1.25 138 123 Pension and provident: Results were affected by an increase in management fees driven by AUM growth, partially offset by an increase in marketing 46 53 4
Slide 22: Continue to scale the credit activity
Credit Continue to scale the credit activity Comprehensive income NIS M before tax H1.24 H1.25 Profitability in the quarter was affected by continuous growth 150 in the credit portfolio 117 104 Additionally, the profit in the period was affected by changes in the fair value of the financial assets i
Slide 23: Agenda
Agenda Key messages Segments overview Strategy Appendix 23
Slide 24: Continuous strategy execution
Continuous strategy execution Improving Diversifying Profitability and Revenues Leveraging scale for material and permanent improvement of insurance profitability and revenue diversification 24
Slide 25: Growth in premiums and deposits
Growth in premiums and deposits Premiums and deposits* NIS B Pension and Provident fund contributions- substantial growth engine CAGR 2018-2024: 5.4% 42.5 39.4 37.5 4.2 2.9 33.0 3.9 5.4% 29.9 3.9 2.5 18.7 22.4 16.5 20.5 21.6 12.4 13.8 1.5 2.2 4.7 5.0 4 5.5 10.3 11.9 3.9 5 5.4 5.9 6.5 5.4 2.7 2.7 6.1
Slide 26: Continuous growth in AUM
Continuous growth in AUM AUM NIS B CAGR 2018-2024: 13.8% 543.4 513.0 56.5 53.9 427.7 67.4 65.1 6.8 44.9 362.3 363.1 6.4 61.3 112.7 40.5 39.6 105.9 291.2 4 62.2 58.5 21.9 35.8 82.6 21.4 2.1 3.2 54.6 58.9 58.2 19.3 1.4 19.3 19.3 52.1 184.9 199.3 16.4 150.6 126.4 128.2 86.6 56.1 65.0 75.4 78.8 44.3 52.
Slide 27: Accelerating delivery of 2026 strategic targets
Accelerating delivery of 2026 strategic targets Comprehensive income target ROE target NIS M/B after tax 25% 1.9-2.1 1,619 18%-19% 17% 1,332 600 7% (77) (1%) 2022 2023 2024 H1.25 2026 2022 2023 2024 H1.25 2026 IFRS 4 IFRS 17 IFRS 4 IFRS 17 27
Slide 28: Strategic focus
Strategic focus The impact on targets is driven by IFRS17 Comprehensive Income after tax 2026 NIS M/B implementation and continuous execution of the strategic plan: 267 2.9-3.2 301 Operating Improving insurance profitability Excellence 2.0-2.3 327 1.9-2.1 Leveraging ROE Continue growing existing in
Slide 29: Agenda
Agenda Key messages Segments overview Strategy Appendix 29
Slide 30: Adjusted profit by business lines H1.25 NIS M
Adjusted* profit by business lines H1.25 NIS M 220 2,001 230 1,808 )27( 146 108 782 264 1,324 563 497 Life Health Non-life Total insurance AM Credit Equity and Adjusted Investment Special Comp. income profit other profit spread items before tax reported • Investment spread – the gap between the repo
Slide 31: Increase in adjusted profit in H1.25
Increase in adjusted* profit in H1.25 Adjusted comprehensive income after tax by business lines H1.25 vs H1.24 NIS M Adjusted comprehensive income after tax and adjusted ROE H1.25 H1.24 H1.25 vs H1.24 NIS M 1,808 1,633 1,300 1,205 30% 1,324 1,200 1,108 1,205 25% 1,198 1,108 25% 1,100 20% 1,000 15% 9
Slide 32: Insurance contract assets and liabilities in the IFRS17 balance sheet
Insurance contract assets and liabilities in the IFRS17 balance sheet Assets 30.6.2025 Liabilities 30.6.2025 Other cash and cash equivalents 3,332 Borrowing and credit 19,832 Other financial investments measured at fair value 42,759 Liabilities for derivatives instruments 8,594 Other financial inves
Slide 33: Composition of financial debt – consolidated and solo
Composition of financial debt –consolidated and solo Financial Liabilities Harel Investments Consolidated 31.12.2024 30.6.2025 Financial Liabilities Harel Investments Solo 31.12.2024 30.6.2025 Harel Investments Solo 1,163 1,116 Financial liabilities (1,116) (1,163) Harel Insurance Tier 2 5,475 5,492
Slide 34: Analysis of total insurance profit Q2.25 and H1.25 NIS M
Analysis of total insurance profit Q2.25 and H1.25 NIS M Comprehensive income by business line H1.25 NIS M Comprehensive income by business line Q2.25 NIS M Total insurance profit H1.25 breakdown NIS M Total insurance profit Q2.25 breakdown NIS M 658 1,685 )97( 496 1,005 )56( 1,124 565 1 2 1 2 Under
Slide 35: Increase of NIS 44 M in underwriting profit in Q2.25
Increase of NIS 44 M in underwriting profit in Q2.25 Total insurance profit breakdown Q2.25 NIS M 496 1,005 565 )56( 1 2 •1 Underwriting profit – insurance service result: • Run-off products: Yield guaranteed and profit- participating life insurance and LTC Composition of underwriting profit (insura
Slide 36: Increase of NIS 120 M in underwriting profit in H1.25
Increase of NIS 120 M in underwriting profit in H1.25 Total insurance profit breakdown H1.25 NIS M 1,124 658 1,685 )97( 1 2 •1 Underwriting profit – insurance service result: Run-off products: Yield guaranteed and profit- • participating life insurance and LTC Composition of underwriting profit (ins
Slide 37: Positive impact of investment income partially offset by interest rate curve decrease in Q2.25
Positive impact of investment income was partially offset by the impact of decrease of the interest rate curve in Q2.25 Total insurance profit breakdown Q2.25 NIS M 496 1,005 565 )56( 2 Net investments and finance income (loss) 1 2 • Investment income from nostro portfolio • Nostro returns during th
Slide 38: Similar trend in H1.25, increase in net investments and finance income
Similar trend in H1.25, increase in net investments and finance income compared with H1.24 Total insurance profit breakdown H1.25 NIS M 1,124 658 1,685 )97( 2 Net investments and finance income (loss) 1 2 • Investment income from nostro portfolio • Nostro returns during the reporting period were pos
Slide 39: P&L structure in IFRS 17 H1.25
P&L structure in IFRS 17 H1.25 1,124 Insurance service result Underwriting profit Net + Profit (loss) from Investment income from the nostro portfolio, saving policies + investment contracts, which presented separately. investments 1,469 investments Investment income from AM and credit is also prese
Slide 40: Insurance service result composition H1.25
Insurance service result composition H1.25 CSM release (new and For insurance service under the contract in life and health 805 existing business) insurance provided in the period Reflects the compensation for assuming the insurance risk – released 159 RA release when the insurance service is provid
Slide 41: Composition of net investments and finance income (loss) – insurance H1.25
Composition of net investments and finance income (loss) – insurance H1.25 Investment income from Nostro Investment income from nostro portfolio (assets backing life, health and non-life Investment liabilities and equity) portfolio income 1,469 (loss) Investment gains attributed to the saving polici
Slide 42: Our Global Partners
Our Global Partners @ Swiss Re CHUBB ®& CHINA RE Allianz @) STAR INSURANCE COMPANIES & QBE GERLING AYA + ~~) ol all p. 2 DUBAI INSURANC & TOKIO MARINE Zarich Insurance Company wd HARTFORD @ | Berkley INSURANCE beazley uaReL
Slide 43: Legal disclaimer and forward looking statement
Legal disclaimer and forward looking statement 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
Slide 44: Thank You
Thank You For more information: https://pr.harel-group.co.il/
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