Harel Insurance Investments & Financial Services (HARL) Q1 2023 earnings summary

Executive summary

• Net loss was NIS 45m versus net profit of NIS 621m; total comprehensive income was NIS 36m versus NIS 327m in Q1 2022. Investment and financing income recovered to NIS 1.529b from a NIS 433m loss.

• AUM reached NIS 376.8b at March 31, 2023, up from NIS 363.1b at year-end 2022; equity was NIS 8.4b.

Financial highlights

• Total gross earned premiums, benefit contributions and investment-contract receipts were NIS 9.153b, down 6.1% YoY; gross earned premiums were NIS 4.217b, down 6.5%.

• Pension benefit contributions rose 18.3% to NIS 3.148b; investment-contract receipts fell 52.6% to NIS 656m and other benefit contributions declined 5.6% to NIS 1.132b.

• Total income was NIS 5.646b versus NIS 4.013b; operating expenses were NIS 5.730b versus NIS 3.159b, and pretax loss was NIS 68m versus profit of NIS 912m.

• Management-fee income was NIS 363m versus NIS 357m; commission income was NIS 125m versus NIS 95m. EPS was a loss of NIS 0.52 versus earnings of NIS 2.89.

Segment performance

• Non-life comprehensive income rose to NIS 161m from NIS 54m, supported by improved motor underwriting, higher market yields and a rate-related liability decrease.

• Health insurance recorded a NIS 54m comprehensive loss versus NIS 592m income; Q1 2022 benefited from a NIS 764m pretax reduction in the personal-lines LTC LAT reserve.

• Life assurance and long-term savings posted a NIS 18m comprehensive loss versus NIS 193m; life assurance loss narrowed to NIS 40m from NIS 218m.

• Pension and provident profit was NIS 22m versus NIS 25m; AUM was NIS 133.2b and NIS 57.9b, respectively, at March 31, 2023.

• Financial services comprehensive income was NIS 14m versus NIS 12m; segment revenue was NIS 72m versus NIS 58m, and segment AUM reached NIS 64b.