Harel
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Harel Insurance and Finances Group ended the Third Quarter of 2010 with an increase of about 59% in the Comprehensive Profit Totaling about NIS 223 Million

24/11/2010

The Comprehensive Profit in the first nine months of the year totaled about NIS 428 Million
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Harel continues to show an increase in profitability in the fields of insurance and long-term savings along with a handsome profit in the capital market and financial services sector
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The Company’s Directorate approved a dividend distribution of about NIS 64 million
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Harel Insurance Investments and Financial Services Group published today its financial reports for the third half and the first nine months of 2010:

The Comprehensive profit for the first nine months of 2010 totaled about NIS 428 million compared to NIS 618 million for the same period the previous year. The decrease in the comprehensive profit for the period of the report compared to the same period the previous year emanates from the influence of capital market yields which were less than the yields in the same period the previous year. The Comprehensive profit for the third quarter of 2010 totaled about NIS 223 million, compared to NIS 139 million for the same period the previous year. An increase of about 59%.

The Net profit for the first nine months of 2010 totaled about NIS 369 million compared to NIS 370 million for the same period the previous year. The Net profit for the third quarter of 2010 totaled about NIS 168 million compared to NIS 87 million for the same period the previous year. An increase of about 93%.

The profit before tax for the period of the report totaled about NIS 581 million compared to NIS 547 million for the same period the previous year, an increase of about 6%.

Michel Siboni, Harel Insurance CEO: “The results of the third quarter of Harel Insurance and Finances for 2010 indicate steadfastness, stability and capability to present growth and profitability in the future as well in all sectors of activity, while establishing and deepening the activities of the company and subsidiaries, along with a positive capital market during the period of the report”.
The total premiums earned by the Harel Group for the first nine months of 2010 totaled about NIS 5.9 billion, compared to about NIS 5.4 billion for the same period the previous year, an increase of about 9%.

The total premiums earned, the benefit fees, and deposits in long term savings activities for the first nine months of 2010 totaled about NIS 4.3 billion, compared to about NIS 3.8 billion for the same period the previous year, an increase of about 13%.

The total premiums earned in life insurance for the third quarter of 2010 totaled about NIS 2,150 million, compared to about NIS 2,021 million for the same period the previous year, an increase of about 6% compared to the same period the previous year. The premiums earned for the period of the report in life insurance and long term savings constituted about 37% of the total premiums earned of the Group for the period of the report. The profit before tax from life insurance and long term savings for the first nine months of 2010 totaled about NIS 273 million, compared to about NIS 270 million the previous year. The profit for the period of the report is affected by charging variable management fees due to yield-dependent policies, which were not charged for the same period the previous year, and on the other hand, the capital market yields were less than the yields for the same period the previous year, and as a result there is a decrease in financial margin. The Comprehensive profit from the life insurance and long term savings sector totaled about NIS 329 million compared to NIS 384 million for the same period the previous year. The decrease in the comprehensive profit emanates mainly from the fact that capital market yields for the period of the report were less than the yields for the same period the previous year.

The scope of assets managed by the pension funds of the Group as of September 30 2010 totaled about NIS 10.8 billion compared to about NIS 8.1 billion as of September 30 2009, an increase of about 33% and compared to the end of 2009 an increase of about 21%. The increase emanates, inter alia, from the increase in the number of active members and the increase in the allocation rate of members of the mandatory pension. The number of members in the pension funds managed by the Group as of September 30 2010 numbers about 477 thousand of which about 303 thousand are active members. The benefit fees collected by the pension funds of the Group during the period of the report totaled about NIS 1,367 million compared to about NIS 1,032 million as of September 30 2009, an increase of about 32%. The profit before tax from the management of pension funds and operation of old pension funds reached during the period of the report about NIS 21 million compared to a profit before tax of about NIS 11 million for the same period the previous year.

The scope of assets managed by the Group's provident funds as of September 30 2010 totaled about NIS 22.7 billion compared to about NIS 20.8 billion as of September 30 2009, an increase of about 9% and compared to the end of 2009, an increase of about 6%. Income from management fees charged from provident funds managed by the Group during the period of the report totaled about NIS 173 million compared to NIS 160 million for the same period the previous year, an increase of about 8%. The total profit before tax from management of provident funds for the first nine months of 2010 totaled about NIS 53 million, compared to NIS 63 million the same period the previous year.

The total sum of premiums earned in health insurance, the sector in which the Group is the leader and the largest in Israel, for the third quarter of 2010 totaled about NIS 557 million, compared to about NIS 470 million for the same period the previous year, an increase of about 18.5%. The total sum of premiums earned in health insurance for the first nine months of 2010 totaled about NIS 1,505 million, compared to NIS 1,356 million the same period the previous year, an increase of about 11%.

The total sum of premiums earned in health insurance sector for the first nine months of 2010 constitutes about 26% of all premiums earned by the Group. The profit before tax from health insurance business for the first nine months of 2010 totaled about NIS 169 million compared to about NIS 158 million for the same period the previous year, an increase of about 7%. The total profit in the health insurance sector for the first nine months of 2010 totaled about NIS 181 million compared to about NIS 211 million for the same period the previous year.

The gross premiums in the general insurance for the first nine months of 2010 totaled about NIS 2,255 million compared to about NIS 2,174 million for the same period the previous year, an increase of 4%. Profit before tax in the general insurance during the period of the report totaled about NIS 98 million compared to about NIS 145 million for the same period the previous year. The comprehensive profit in the general insurance sector during the period of the report totaled about NIS 110 million compared to NIS 241 million for the same period the previous year. The decrease in the profit and the comprehensive profit emanates mainly from capital market influence. The retained premiums in general insurance for the period of the report totaled about NIS 1,294 million, compared to NIS 1,212 million for the same period the previous year, an increase of 7%. The increase emanates from an increase in the scope of activity in the sectors of "property vehicle" and "other property". During the period of the report EMI results were included for the first time in the financial results of the Group.

The total sum of premiums earned in the international insurance companies sector for the period of the report totaled about NIS 68 million, compared to NIS 36 million for the same period the previous year, an increase of 89%. Loss before tax in the international insurance companies sector during the period of the report totaled about NIS 28 million. The loss in the international insurance companies sector emanates from the fact that the companies began their insurance activities a relatively short period of time ago and therefore these are the first steps of the companies’ activity and penetration of local markets in which the companies operate.

The scope of assets managed in the capital market and financial services sector as of September 30 2010 totaled about NIS 24.7 billion, compared to about NIS 16.2 billion as of September 30 2009, an increase of about 52%. The scope of assets managed in trust funds crossed the threshold of NIS 20 billion. The increase emanates mainly from the increase in managed assets in trust funds and as a result of the continued expanded activity in the exchange traded note sector. The profits before tax from the capital market and financial services activity for the third quarter of 2010 totaled about NIS 24 million, compared to a loss of about NIS 11 million for the same period the previous year. The transition from loss to profit in the capital market and financial services sector emanates from the continued growth in the scope of managed assets, and primarily in trust funds and a positive change in the mix of trust funds, which brought an increase in the average management fee rate.

The share capital of the Group attributed to the shareholders of the Company as of September 30 2010, totaling about NIS 3.5 billion compared to a share capital of about NIS 3.1 billion as of December 31 2009. The increase in the share capital emanates from the profits of the period, the allocation of shares against the purchase of 35% of the share capital of Dikla, and the dividend distribution of NIS 107 million, and the Company’s share repurchase totaled about NIS 58 million.

In light of the profitability, and the company's capital surplus in relation to regulatory requirements, and after taking into account the company's financial results during the period of the report, on November 24 2010 the Company’s Directorate approved a dividend distribution of about NIS 64 million, which in addition to the dividend of about NIS 107 million which the company distributed in June this year, now totals about NIS 170 million since the beginning of 2010.

The Group's insurance companies have substantial capital surpluses in relation to regulatory capital requirements. Harel Insurance has capital surpluses totaled about NIS 843 million, Dikla totaled about NIS 74 million and EMI about NIS 153 million.

The total managed assets of the Group, in insurance, pension funds, provident funds, trusts funds and financial services on September 30, 2010 totaled about NIS 98 billion.

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