Slide 1: 2023 Q2 Phoenix Holdings Financial Review
2023 Q2 Phoenix Holdings Financial Review
Slide 2: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer |2
Slide 3: Phoenix Holdings - Overview
Phoenix Holdings - Overview Group Activities Highlights Insurance Asset Distribution Credit Leading Israeli TA-35 9.6 NISb Management financials group Leading index Market cap 1 P&C Pensions Agencies SME (Gama) Health Mutual Funds Brokers Real Estate Life ETFs Brokerage Distinctive 20% 15% Portfolio
Slide 4: Economic Snapshot
Economic Snapshot Continued capital market GDP Growth 2 GDP per Capita 3 Long-Term Savings AUM 4 volatility, with Israeli Percent USD ‘000 NIS Trillion market under- 8.6% performance in H1 6.5% Sweden 57 9% CAGR 4.1% 4.2% Israel 55 3.3% 3.0% 2.4 2.3 Relative resilience to 1.9 2.0 Germany 49 1.6 infl
Slide 5: H1 2023 Highlights
H1 2023 Highlights 298 6.0 417 Strong performance in asset management, H1/23 NISm % NISb agencies, & P&C Growth to 417 NISb managed assets ahead Comprehensive Income ROE AUM of expectations, including completed acquisitions (Epsilon, Psagot) 10.1 208 However, negative impact from Non- Operating Inco
Slide 6: Growth in Core Business
Insurance Services Non Growth in Core Business Core Core operating Income Income income Comprehensive Income NISm, after tax 2,316 1,450 1,353 1,124 Core Income - continued growth 752 390 Services Core Income 664 537 growth in fees from asset 314 298 44 management, distribution, credit 266 193 215 2
Slide 7: Investment Core Capabilities
Investment Core Capabilities Returns - Insurance Nostro / Corporate Account Asset Allocation - Corporate Account (Nostro) Percent (nominal) Percent (June 30, 2023) 10.6% Cash Alternatives & other 2% 11% 7.4% 6.2% Real estate 5.6% 13% 4.8% Fixed income (Govt) 35% 3.2% ~70% fixed 1.9% Equities 5% inco
Slide 8: Equity Generation and Dividend Distribution
Equity Generation and Dividend Distribution Building Track-Record Shareholders' Equity NISm Before 120 NISm semi-annual dividend announced* 10,145 10,055 announced representing a total of 297 NISm dividends 9,653 dividends year-to-date (together with 177 NISm dividend 7,970 distributed April 2023) 6
Slide 9: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer |9
Slide 10: Value Creation Strategy & Catalysts
Value Creation Strategy & Catalysts Value Drivers Growth Engines 1 2 3 4 Insurance Accelerated Innovation & Active Capital Growth Efficiency Management Management Accelerating growth Deepening client-focus Optimizing group Deploying capital Asset Management while shifting mix to & sustainable portfo
Slide 11: Group Targets
Group Targets Insurance Asset Management Distribution Credit Comprehensive Income Services Core Income NISb Without special items, after tax, NISm 2.3 670 1.4 1.3-1.5 1.1 390 Shifting group mix to 271 314 50% stable, fee- 215 based income 0.3 2020 2021 2022 H1/23 mid- 2020 2021 2022 H1/23 mid- term
Slide 12: 1. Insurance | Continued Growth
1. Insurance | Continued Growth Insurance Asset Management Distribution Credit Premiums & Contributions NISb 19.7 19.1 +12% CAGR Growth in strategic priority P&C, 7.3 with lower savings inflows due to 14.5 7.8 market conditions 12.1 3.2 12.4 11.3 10.9 2.0 1.9 1.6 5.6 8.8 5.2 5.4 4.5 4.8 5.1 5.1 2.5
Slide 13: 1. Insurance | Targets
1. Insurance | Targets Insurance Asset Management Distribution Credit P&C Expense Ratios2 Premiums, including Smart direct, NISb P&C Health Life % of premiums % of AUM 4.5 2019 4.10% 5.57% 0.50% 3.7 3.2 2020 5.08% 5.82% 0.49% 2.9 2.4 2021 4.40% 5.50% 0.41% 2.0 2022 3.53% 5.00% 0.40% H1/22 3.85% 5.39
Slide 14: 2. Asset Management | AUM Growth
2. Asset Management | AUM Growth Insurance Asset Management Distribution Credit Assets Under Management NISb 417 369 371 80 Pension 53 67 Asset Management 115 Provident (off balance 234 117 111 sheet) 215 37 178 31 35 88 Investment Services 24 34 70 66 30 56 52 45 Insurance 97 95 99 Insurance and Sa
Slide 15: 2. Asset Management | Targets
2. Asset Management | Targets Insurance Asset Management Distribution Credit Group AUMs Pension & Provident Contributions Investment Services Revenues Expense Ratio: Pension & Provident NISb NISb NISm % of AUM 450-550 2019 0.24% 19.0 750 417 44 666 369 371 2020 0.16% 296 13.1 463 502 2021 0.13% 252
Slide 16: 3. Distribution (Agencies) | Stand-Alone Value
3. Distribution (Agencies) | Insurance Asset Management Distribution Credit Stand-Alone Value Agency Revenues 79.4% 20.6% Phoenix Holdings Management Assessing NISm preliminary interest 950 from international Phoenix Agencies investors to unlock 770 & create value 635 Agam Shekel Oren Mizrach Qualit
Slide 17: 4. Credit | Building Group Activities
4. Credit | Building Group Activities Insurance Asset Management Distribution Credit Group Credit Activities Reporting Segments NISb 5.3 5.1 > Private client brokerage margin & shareholder loans Investment 0.6 Investment House 0.6 Services > Under Phoenix Investment House 0.2 0.3 Mortgages > Real es
Slide 18: Sustainability | 2022 Report Highlights & Examples
Sustainability | 2022 Report Highlights & Examples Group Products & Services Investments Environnent 20% #1 EV insurer 6.5 NISb Define climate change decrease in carbon footprint (2019 preferred insurer for Tesla of green investments strategy base) Social 0.5% #1 in service >0.5m Enhance commitment
Slide 19: Resilience, Growth & Value
Looking Ahead Resilience, Well positioned for continued volatility and uncertainty, with Ongoing strategic execution & unlocking of Assessing strategic strong balance sheet & liquidity value opportunities Growth & Value Creation Investment in capabilities, including digital transformation / Efficien
Slide 20: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer | 20
Slide 21: Q2 2023 Income by Source
Q2 2023 Income by Source PBT Breakdown Q2 2023, NISm Q2/2023 Q2/2022 Difference P&C 106 73 33 Comprehensive income Health 59 89 (30) Q2 2023, NISm Life & Savings 33 61 (28) Other Equity Returns 95 140 (45) Core Insurance 293 363 (70) Primarily negative Pension & Provident 23 31 (8) impact of investm
Slide 22: H1 2023 Income by Source
H1 2023 Income by Source PBT Breakdown H1 2023, NISm Comprehensive income H1 2023, NISm H1/2023 H1/2022 Difference P&C 218 77 141 Health 95 156 (61) Life & Savings 66 106 (40) Primarily negative Other Equity Returns 204 233 (29) impact of investments 348 Core Insurance 583 572 11 and rates (illiquid
Slide 23: Q2 2023 Income by Segment
Q2 2023 Income by Segment Comprehensive income before tax Q2 2023, NISm Income contribution from services 9 12 (29) 217 27 82 60 97 (77) 40 )6( 2 P&C Health Life Other Equity Pension and Investment Agencies Credit Other Tax Miniority Q2/23 Returns Provident Services 16 100 118 Insurance Asset Manage
Slide 24: H1 2023 Income by Segment
H1 2023 Income by Segment Comprehensive income before tax Income contribution from services 3 H1 2023, NISm )15( 55 (53) 298 155 73 )83( 173 111 (181) 60 P&C Health Life Other Equity Pension and Investment Agencies Credit Other Tax Miniority 1-6/23 Returns Provident Services -18 171 213 Insurance As
Slide 25: Strong Balance Sheet
Strong Balance Sheet Phoenix Holdings NISm 31/12/2022 30/06/2022 30/06/2023 Difference Financial Liabilities (NISm) Cash 3,282 2,459 2,713 -569 Bonds and Loans Intangible Assets 2,992 2,919 3,326 334 30/06/2023 31/12/2022 CPI Floating Fixed Deferred acquisition costs 2,453 2,281 2,655 202 linked int
Slide 26: Active Solvency & Capital Management
Active Solvency & Capital Management Economic Capital / Solvency (Insurance Company) Solvency II implementation Cashflow and Liquidity (Holding Company) > Solvency II implemented in Israel in line with international Solvency ratio1 > Phoenix Insurance dividend standards, with strong regulatory overs
Slide 27: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer | 27
Slide 28: P&C
P&C P&C Health Life Other Pension Investment Agencies Credit Equity Provident Services Other 21% growth in premiums Comprehensive Income Before Tax NISm Improved performance overall and in motor (compulsory + property) in H1, despite challenging environment including high (40) rates of vehicle theft
Slide 29: Health
Health P&C Health Life Other Pension Investment Agencies Credit Equity Provident Services Other Lower underwriting profit, Comprehensive Income Before Tax mainly due to increase in claims NISm 3 Income decrease from LAT reserves due primarily to interest rates (illiquidity premium); 358 NISm LAT res
Slide 30: Life and Savings
Life and Savings P&C Health Life Other Pension Investment Agencies Credit Equity Provident Services Other Lower underwriting profit Comprehensive Income Before Tax mainly due to expenses & NISm take-up rates in 2022 Negative capital market impact including variable 66 management fee deficit of 529 N
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 204 (372) (181) (13) Financial Investments Special Items H1/23 Margin above 3% H1/22 233 (989) - (756) Difference (29) 617 (13) 575 Q2/23 95 (
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 16 Focus on efficiency including closing of direct sales activity and focusing on higher margin / efficient 60
Slide 33: Asset Management | Investment Services
Asset Management | Investment Services P&C Health Life Other PensionInvestment Agencies Credit Equity Provident Services Other Performance improvement from Comprehensive Income Before Tax strategic execution NISm Higher brokerage contribution due 5 (9) to growth & margin credit rates 4 8 Completed a
Slide 34: Agencies
Agencies P&C Health Life Other Pension InvestmentAgencies Credit Equity Provident Services Other Stable income with organic Comprehensive Income Before Tax growth in business, however NISm growth rate impacted by slower pace of hiring in the market 13 Increase in EBITDA to 167 NISm in H1 compared to
Slide 35: Credit (Gama only)
Credit (Gama only) P&C Health Life Other Pension Investment Agencies Credit Other Equity Provident Services Continued growth in most credit Credit Portfolio Comprehensive Income Before Tax categories, including business loans and NISm, without credit card activity NISm real estate financing, while p
Slide 36: Other
Other P&C Health Life Other Pension Investment Agencies Credit Other Equity Provident Services Segment includes Comprehensive Income Before Tax Phoenix Holdings NISm solo profits (including RT1 holding) as well as other items (40) 48 (1) 3 (20) 16 Financial Interest Subsidiaries Other Special Items
Slide 37: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer | 37
Slide 38: 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, and macro resilience Strong market position with distinctive growth & performance t
Slide 39: Competitive Landscape
Competitive Landscape Comprehensive Income AUM P&C Market Share NISm, attributed to shareholders NISb, 2022 %GWP, all sub-segments, 2022 ROE Phoenix 371 Others Harel Phoenix 1,124 11.0% Migdal 368 Wesure 9.8% 16.5% 7.2% 5.5% Menora 410 Harel 363 Shlomo 6.6% 2022 Harel -77 (0.9%) Clal 295 13.9% Yashi
Slide 40: Investment Returns – Explanation
Investment Returns – Explanation Reconciliation of investment returns above / below 3% real returns with financial statements NISm H1/23 H1/22 2022 P&L Items from Financial Statements Investment income 5,289 (5,435) (5,555) Share in profits of equity-accouted investees 43 30 62 Total components of n
Slide 41: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer | 41
Slide 42: Glossary
Glossary AM Asset Management 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 Consolidation Core Income In
Slide 43: Glossary
Glossary 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 securities that tracks the performance of an undelaying index, sector, or security type Net Infl
Slide 44: Agenda
1. Highlights 2. Strategy & Targets 3. Financial Results Agenda 4. Segment Breakdown Appendix Glossary Disclaimer | 44
Slide 45: Disclaimer
Disclaimer This presentation does not constitute an offer to purchase the Company’s securities or solicitation to receive such offers and is designed solely to offer information as part of the Company’s explanations regarding its Financial Statements. This presentation includes information regarding