Harel Insurance Investments & Financial Services (HARL) Q3 2023 earnings summary

Executive summary

• Shareholders’ comprehensive income after tax was NIS 271m in Q3.23 versus a NIS 249m loss in Q3.22; 9M.23 income was NIS 397m versus a NIS 359m loss in 9M.22.

• Net profit was NIS 304m in Q3.23 versus NIS 87m; 9M.23 net profit was NIS 213m versus NIS 527m.

• Improved underwriting and interest-rate effects supported results; AUM reached NIS 411.6bn at September 30, up 13% from year-end 2022.

Financial highlights

• 9M.23 premiums, benefit contributions and investment-contract receipts totaled NIS 29.1bn, up 3.3% YoY; Q3.23 rose 7% YoY.

• 9M total income was NIS 18,431m versus NIS 7,119m; net investment and financing income was NIS 5,275m versus a NIS 5,535m loss.

• 9M comprehensive income before tax was NIS 562m; profit excluding special items was NIS 406m, versus a NIS 1,246m loss in 9M.22.

• Shareholders’ equity was NIS 8.7bn at September 30, 2023.

Outlook and guidance

• The October 2023 health reform provides for automatic transfers of eligible full surgery policyholders to supplemental coverage from June 2024 unless they opt to remain.

• The reform is expected to reduce supplemental surgery premiums and claims and support retention; fixed discounts apply for 10 years in health and critical illness.

• Isracard acquisition closing remained subject to regulatory approvals and other conditions; the amended agreement extended the deadline to December 31, 2023, with extension options.

• Harel 2030 targets stronger insurance execution and distribution, alongside diversification of profit sources.