Harel Insurance Investments & Financial Services (HARL) Q3 2024 earnings summary

Executive summary

• 9M.24 profit before tax rose to NIS 1,069M from NIS 277M and net income to NIS 736M from NIS 213M, supported by stronger investment results and actuarial updates.

• Comprehensive income attributable to shareholders was NIS 547M in Q3.24 and NIS 672M in 9M.24, versus NIS 271M and NIS 397M, respectively; ROE was 25% in Q3 and 10% in 9M.

• 9M.24 adjusted profit from insurance, asset management and credit rose to NIS 1,216M from NIS 1,021M; underwriting profit increased 30% to NIS 884M.

• Results reflected underwriting gains and positive real Nostro yield, despite NIS 46M of pre-tax Swords of Iron War effects.

Financial highlights

• 9M total income was NIS 20,872M versus NIS 18,431M; gross earned premiums were NIS 11,964M versus NIS 13,394M.

• Net investment and financing income rose to NIS 8,812M from NIS 5,275M; management-fee income increased to NIS 1,306M from NIS 1,133M.

• Gross earned premiums, benefit contributions and investment-contract receipts totaled NIS 31.231B in 9M, up 7.3%; Q3 totaled NIS 10.722B, up 5.7%.

• AUM reached NIS 489.7B at September 30, 2024, up 14% from year-end 2023 and 19% YoY.

Outlook and guidance

• 2026 targets include NIS 520B AUM, NIS 43.8B premiums and deposits, NIS 1.91B fee income, NIS 2,217M adjusted core-business profit and NIS 1,404M underwriting profit.

• 2026 targets assume a 3% real Nostro return, 3% CPI, strategic-plan execution and premium growth in line with industry while maintaining market share; actual results may vary with markets, regulation and macroeconomic conditions.

• IFRS 17 and IFRS 9 are scheduled to take effect in Israel Jan. 1, 2025, with Jan. 1, 2024 as transition date; preliminary implementation estimates remain subject to review and regulatory changes.

• Preliminary IFRS 17 estimates indicate equity could increase NIS 300M, with net-of-reinsurance CSM of NIS 16B and risk adjustment of NIS 3B, both pre-tax.