Summary of financial results for the period 1-9/2016 Harel Insurance - - PowerPoint PPT Presentation

November 2016 Harel Insurance Investments & Financial Services Ltd.

Summary of financial results for the period 1-9/2016

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Harel Insurance Investments & Financial Services Ltd

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 expressed or implied and there should be no reliance on the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the Company nor any of its employees or representatives shall bear any liability whatsoever (whether due to negligence or otherwise) for any loss howsoever resulting from using this document or its content or otherwise arising in connection with this document. This document is provided solely for your information and may not be reproduced, distributed or forwarded, directly

• r indirectly, in any form to any other person, nor published, wholly or partially, for any purpose. This document

contains information that under Israel’s Securities Law, 5728-1968, may be deemed or considered Inside Information

• f Harel Insurance Investments & Financial Services Ltd. Any use of Inside Information is illegal. Distribution of this

document may be restricted by law and persons receiving this document should be aware of such restrictions and

• bserve them accordingly. In receiving this report you agree to be bound by the foregoing instructions.

Statements concerning the Company’s future business, financial position and results of operations are subject to risks and uncertainties, which may cause actual results to differ materially from those forecast. Such forward-looking information includes, but is not limited to, product demand, pricing, changing economic conditions, product and technology development risks, the effect of the Company's accounting policies as well as certain other risk factors which are specified from time to time in the Company's reports to the Securities Authority.

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Harel Insurance Investments & Financial Services Ltd

Comprehensive income after tax and ROE in NIS million (in annual terms)

Comprehensive income after tax Return on Equity

* Including a revision of the outstanding claims in the liabilities sectors in respect of the Winograd recommendations, in the amount of NIS 112 million after tax for the period 1-9/2016. Including an increase in the insurance liabilities for the effect of LAT and interest in the amount of NIS 96 million after tax for the period 1-9/2016.

686 533 381 150 205 (130) 163

2013 2014 2015 1-9/2015 1-9/2016 7-9/2015 7-9/2016

*

16% 11%

8% 4% 6% (11%) 13%

2013 2014 2015 1-9/2015 1-9/2016 7-9/2015 7-9/2016

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Harel Insurance Investments & Financial Services Ltd

1,048 992

3,086 3,186 4,243 3,797 3,810

1,085 1,030

3,104 2,956 3,964 3,571 3,192

741 766

2,189 2,282 3,066 3,198 3,103

81 65

211 194 258 215 177

1,581 1,434

4,592 3,992 5,516 4,875 4,121

589 447

1,692 1,314 1,931 1,754 1,593

• Earned premiums and benefit contributions, gross (NIS million)

* Including a single premium in the amount of NIS 230 million. 7-9/2016 7-9/2015 increase % 1-9/2016 1-9/2015 increase % 2015 2014 % לודיג2013 1,048 992 6%3,086 3,186 (3%)4,243 3,797 12%3,810 Life assurance 1,085 1,030 5% 3,104 2,956 5% 3,964 3,571 11% 3,192 Health insurance 741 766 (3%) 2,189 2,282 (4%) 3,066 3,198 (4%) 3,103 Non-life insurance 81 65 25% 211 194 9% 258 215 20% 177 Insurance companies overseas 2,955 2,853 4% 8,590 8,618 (0%) 11,531 10,781 7% 10,282 Total 1,581 1,434 10% 4,592 3,992 15% 5,516 4,875 13% 4,121 Pension contributions 589 447 32% 1,692 1,314 29% 1,931 1,754 10% 1,593 Provident contributions 5,125 4,734 8% 14,874 13,924 7% 18,978 17,410 9% 15,996 Total

*

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Harel Insurance Investments & Financial Services Ltd

Assets under management (AUM) and nostro assets (NIS billion)

Pension funds Provident funds Mutual funds ETNs Portfolio management Insurance * Including the offsetting of inter-company balances.

*

34.8 39 41.3 47.1 54.9 61.0 64.2 67.7

8.9 11.7 13.8 19.4 25.4 31.4 37.1 42.2 21.5 23.4 22.2 24.2 27.2 29.0 29.6 31.0 15 20.8 17.0 19.5 32.9 33.7 24.7 19.3

1.2 3.1 3.6 6.0 12.1 15.3 14.1 13.2 1.8 2.3 3.6 2.9 8.5 8.9 8.7 8.5

20 40 60 80 100 120 140 160 180 200 . . 83.2 100.3 101.5 119.1 161 179.3 181.9 178.4

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Harel Insurance Investments & Financial Services Ltd

Comprehensive income before tax from operating segments (NIS million)

* Including an increase in the insurance liabilities for the effect of LAT and interest in the amount of NIS 149 million before tax for the period 1-9/2016. ** Including a revision of the outstanding claims in the liabilities sectors in respect of the Winograd recommendations, in the amount of NIS 175 million before tax for the period 1-9/2016.

7-9/2016 7-9/2015 1-9/2016 1-9/2015 2015 2014 2013 89 (106) (20) 117 298 164 432

Long-term savings

33 (37) 128 (38) 2 140 202

Health

38 (40) 35 56 124 287 219

Non-life insurance

2 (4) 7 (6) (7) 5 (12)

Insurance companies overseas

17 (7) 35 36 8 64 27

Finance

59 (27) 76 54 150 160 221

Other capital

238 (222) 260 220 574 819 1,089

Total

** *

432 164 298 117

• 20
• 106

89 202 140 2

• 38

128

• 37

33 219 287 124 56

35

• 40

38

• 12

5

• 7
• 6

7

• 4

2 27 64 8 36

35

• 7

17 221 160 150 54 76

• 27

59

• 250
• 50

150 350 550 750 950 1,150

• 220

1,089 819 574 260 (222) 238

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Harel Insurance Investments & Financial Services Ltd

Non-life insurance segment – comprehensive income before tax (NIS million)

* Including a revision of the outstanding claims in the liabilities sectors in respect of the Winograd recommendations, in the amount of NIS 175 million before tax, for the period 1-9/2016.

112 129 88 43

• 27
• 22

2 24 34

• 12
• 4

8

• 8

2 25 47 59 44 53 14 21 4 13

• 65
• 63
• 43
• 24
• 1

54 64 53 36 45 1 15

• 100

100 200 300 400

• 56

219 287 124 35 (40) 38

7-9/2016 7-9/2015 1-9/2016 1-9/2015 2015 2014 2013 2 (22) (27) 43 88 129 112

Compulsory motor

2 (8) 8 (4) (12) 34 24

Motor property

21 14 53 44 59 47 25

Property and other branches

(1) (24) (43) (63) (65) 13 4

Liabilities and other branches

15 1 45 36 53 64 54

Mortgage insurance

38 (40) 35 56 124 287 219

Total

*

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Harel Insurance Investments & Financial Services Ltd

Life assurance and long-term savings segment - comprehensive income before tax (NIS million)

* Including an increase in the insurance liabilities for the effect of LAT and interest in the amount of NIS 149 million before tax for the period 1-9/2016.

7-9/2016 7-9/2015 1-9/2016 1-9/2015 2015 2014 2013 66 (130) (72) 31 185 40 346

Life assurance

14 15 39 53 69 69 57

Pension

9 8 13 33 44 55 29

Provident

89 (106) (20) 117 298 164 432

Total

*

346 40 185 31

• 72
• 130

66 57 69 69 53 39 15 14 29 55 44 33 13 8 9

• 200
• 100

100 200 300 400 500

• 117

432 164 298 (20) (106) 89

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Harel Insurance Investments & Financial Services Ltd

Financial services segment (NIS million)

* Including reduced value of the mutual fund activity by NIS 68 million before tax. ** Including reduced value of the mutual fund activity by NIS 25 million before tax for the period 1-9/2016 and NIS 22 million before tax for the period 1-9/2015. *** Including reduced value of the mutual fund activity by NIS 22 million before tax for the period 7-9/2015.

254 304 300 231 196 71 62 27 64 8 36 35 (7) 17 50 83 91 71 67 20 20

2013 2014 2015 1-9/2015 1-9/2016 7-9/2015 7-9/2016

Revenus Comprehensive income before taxes EBIDTA 7-9/2016 7-9/2015 1-9/2016 1-9/2015 2015 2014 2013 62 71 196 231 300 304 254

Revenus

17 (7) 35 36 8 64 27

Comprehensive income (loss) before taxes

20 20 67 71 91 83 50

EBIDTA

* ** ** ***

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Harel Insurance Investments & Financial Services Ltd

Equity – Harel Investments (NIS million)

Dividend (NIS million) Dividend yield (%)

308 7.6% 320 7.5% 235 6.3% 171 5.7% 4,512 4,724 4,912 4,950

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Harel Insurance Investments & Financial Services Ltd

Capital surpluses – Harel Insurance (NIS million)

5,241 5,538 5,566 1,085 1,230 1,339 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 . .

Surplus capital Required capital

6,768 6,326 6,905

*

* As a result of the merger of Dikla’s insurance activity, the capital surplus of Harel Insurance increased by NIS 180 million. This increase is due to the transfer of a capital note from Dikla to Harel and also to relief in the method of calculating the aggregate capital requirement for outstanding claims.

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Harel Insurance Investments & Financial Services Ltd

Solvency

• On April 21, 2016, the Commissioner’s office published an instruction to perform an IQIS exercise for 2015 (IQIS5), which is

based on the revised directives from Europe, with adjustments for the local market.

• Based on the results of the IQIS5 exercise and taking into account the aforementioned transition provisions, Harel

Insurance, ICIC and EMI have significant capital surpluses.

• It is emphasized that the model in its current format is extremely sensitive to changes in market and other variables, so that

the capital requirements and capital surpluses arising from the model may be different on the actual date of application.

• At December 31, 2015, Harel’s capital surplus on a consolidated basis, and taking into account the transition provisions, is

similar to the results submitted in the previous exercise and amounts to more than one billion shekels.

• The IQIS exercise reflects a solvency ratio of 122% for Harel Insurance at December 31, 2015, as calculated including

transition provisions. Excluding the transition provisions, the solvency ratio is 113%.