Migdal Insurance and Financial Holdings (MGDL) Q2 2023 earnings summary

Executive summary

• H1 comprehensive profit was ₪99m versus a ₪712m loss, while net income was ₪752m versus a ₪662m loss; Q2 recorded a ₪41m comprehensive loss and a ₪171m net loss.

• H1 underwriting profit was ₪289m before tax versus ₪330m; Q2 underwriting profit was ₪184m versus ₪266m.

• Recurring premiums and contributions grew 7% to ₪11.8bn; assets under management were ₪389bn at June 30, 2023.

Financial highlights

• H1 gross premiums and contributions totaled ₪12.7bn; gross earned premiums were ₪6.224bn versus ₪6.192bn in H1 2022.

• Proprietary-portfolio investment gains, including designated bonds, were ₪1.758bn in H1 versus losses of ₪152m; Q2 gains were ₪1.013bn versus ₪115m.

• Interest-rate increases lifted H1 pretax profit by ₪224m through lower reserves, versus ₪1.188bn in H1 2022; Q2 rate declines reduced pretax profit by ₪135m.

• Q2 comprehensive loss included a ₪30m after-tax impact from the policy-factor class-action settlement framework; estimated pretax impact was ₪50m.

• Total equity was ₪8.164bn at June 30, 2023, versus ₪8.096bn at year-end 2022; cash and cash equivalents were ₪19.8bn versus ₪18.7bn.

Outlook and guidance

• Updated multi-year strategy priorities include strengthening core insurance, profitable long-term growth, adjacent activities and improved returns on equity; implementation was described as on schedule.

• Management cited intensifying competition and worsening macroeconomic indicators, emphasizing prudent risk management and protecting savers’ funds.

• September 2023 life-agent insurance deposit rule changes could reduce sales of the affected product; no material overall impact was expected.