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

Executive summary

• Q1 net loss was NIS 45m versus net income of NIS 621m; investment and financing income swung to NIS 1,529m from a NIS 433m loss.

• Reported comprehensive income was NIS 36m versus NIS 327m; excluding special effects, comprehensive loss narrowed to NIS 53m from NIS 280m.

• Assets under management reached NIS 377bn at March 31, 2023, with shareholder equity of NIS 8.4bn.

Financial highlights

• Total income rose to NIS 5,646m from NIS 4,013m; gross earned premiums declined to NIS 4,217m from NIS 4,511m.

• Earned premiums, gross benefit contributions and investment-contract receipts totaled NIS 9.2bn versus NIS 9.8bn in Q1.22.

• Premiums earned on retention were NIS 3,608m versus NIS 3,987m; management fee income was NIS 363m versus NIS 357m, and commission income was NIS 125m versus NIS 95m.

• Loss before tax was NIS 68m versus profit before tax of NIS 912m; basic and diluted EPS was a loss of NIS 0.52 versus earnings of NIS 2.89.

Segment performance

• Life assurance and long-term savings reported comprehensive loss of NIS 18m versus NIS 193m; life assurance management fees fell to NIS 124m from NIS 131m.

• Health insurance reported comprehensive loss of NIS 54m versus income of NIS 592m; prior-year results included a NIS 764m pre-tax LTC reserve reduction from interest-rate changes.

• Non-life comprehensive income was NIS 161m versus NIS 54m; compulsory motor and CASCO underwriting improved.

• Overseas insurers reported a NIS 9m loss versus NIS 30m; Turk Nippon results included hyperinflation adjustments amid 51% Turkish inflation and continued lira erosion.

• Financial services reported comprehensive income of NIS 14m versus NIS 12m; revenue was NIS 72m versus NIS 58m, with continued money-market fund inflows.