Harel
Press Releases

Harel Insurance and Finances Group ended the First Quarter of 2010 with a increase of 57% in its Net Profit, Totaling about NIS 187 Million.

25/05/2010

The total profit for the first quarter of 2010 comprehensive about 240 million NIS
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Harel presents a sharp growth in EV. The Group’s embedded value totals about 6.1 Billion NIS
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Harel’s board of directors authorized a dividend distribution in the sum of about 107 million NIS
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During the first quarter the Group completed the purchase of the share of Clalit Health Services in Dikla and the purchase of the full control in EMI, the financial results of which were included in the Group’s results for this quarter
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Ben Hamburger the CEO of Harel Insurance and Finances Group: “The success of the bonds issue of about 630 million NIS expresses the investors’ vote of confidence in Harel, its management and activities, and I am very proud of this”

Harel Insurance Investments and Financial Services Group published today its financial reports for the first quarter of 2010:
The net profit for the first quarter of 2010 totaled a sum of about NIS 187 million compared to about  120 million NIS in the first quarter 2009, an increase of about 57%. The sharp in the net profit during the period of the report emanates mainly from the fact that the company resumed the collection of variable management fees for yield dependent policies which were not charged during the same period the previous year and from the effect of the slight decline in the inflation rate compared to the same period the previous year. The comprehensive profit of the Group for the first quarter of 2010, comprised of the after-tax profit during the period of the report plus the net change in the capital reserve for financial assets available for sale and other changes in the capital, totaled at about 240 million NIS
compared to a profit of 259 million NIS in the first quarter of 2009.

Ben Hamburger the CEO of Harel Insurance and Finances Group: “The results for Harel Insurance and Finances for the first quarter of 2010 show strength, stability and the ability to present growth and profitability in the future in all sectors of operation, including the capital market and finances sector which presents good profitability. Thus while securing and deepening the operations of the company and its subsidiaries. With regard to the bonds issue of about 630 million NIS, which will serve as tier 2 hybrid capital for Harel Insurance, Hamburger noted: “The success of the bonds issue constitutes the investors’ vote of confidence in Harel, its management and activity, and I am very proud of this”.

The total premiums earned by the Harel Group in the first quarter of 2010 totaled about 1.9 billion NIS, compared to about 1.7 billion NIS in the first quarter 2009, an increase of about 9%.

The total premiums earned in life insurance and long term savings in the first quarter of 2010 totaled at about 700 million NIS, compared to about 674 million NIS in the first quarter 2009, a growth of about 4%. The profit from life insurance and long term savings totaled in the first quarter of 2010 totaled about 147 million NIS, compared to about 121 million NIS in the first quarter 2009, an increase of about 21% The scope of assets managed by the pension funds of the Group as of March 31 2010 totaled about 9.6 billion NIS compared to about 6.5 billion NIS as of March 31 2009 an increase of about 48% and a growth of about 7.8% compared to the year of 2009. The number of members in the pension funds managed by the Group as of March 31 2010 numbers about 384 thousand members out of which about 230 thousand are active members, an increase of about 12% in the number of active members compared to March 31 2009.

The benefit fees collected by the pension funds of the Group during the period of the report totaled about 400 million NIS compared to about 310 million NIS in the first quarter 2009, an increase of about 28%. The profit before tax from management of the pension funds and operating the old pension fund totaled during the period of the report the sum of about 5.2 million NIS compared to a profit before tax of about 0.4 million NIS in the first quarter 2009.

The scope of assets managed by the provident funds of the Group as of March 31 2010 totaled about  22.3 billion NIS compared to about 18.4 billion NIS as of March 31 2009, an increase of about 21%. The management fees collected from the provident funds of the Group during the period of the report totaled about 60.3 million NIS compared to about 50.5 million NIS in the first quarter 2009, an increase of about 19%. The profit before tax from management of the provident funds totaled during the first quarter of 2010 the sum of about 18 million NIS compared to about 20 million NIS in the first quarter 2009.

The total sum of premiums earned in health insurance, the sector in which the Group is the largest and leading in Israel, totaled in the first quarter of 2010 about NIS 470.6 million compared to about  433.4 million NIS during the first quarter 2009, an increase of about 9%. The total sum of premiums earned in the health insurance sector constitutes in the period of the report about 25% of the total premiums earned by the Group. The profit before tax from the health insurance business totaled in the first quarter of 2010 about 55 million NIS compared to about 53 million NIS in the first quarter 2009, an increase of about 2.3%.

The gross premiums in the general insurance, totaled in the first quarter of 2010 about 1,014 million NIS compared to about 936 million NIS during the first quarter 2009, an increase of about 8%. The profit before tax from the general insurance totaled in the first quarter of 2010 about 50 million NIS compared to about 40 million NIS in the first quarter 2009, an increase of about 25.1%. The growth emanates from the decline in the inflation rate compared to the first quarter 2009, improvement in the underwriting profit and from the fact that in the period of the report, for the first time, the results of EMI are included. The retained premiums in the general insurance totaled in the period of the report about  617 million NIS, compared to about 575 million NIS in the first quarter 2009, an increase of about 7%. The growth emanates inter alia from the inclusion of the EMI results for the first time in the financial results.

The scope of assets managed by the capital and financial services sector of the Group as of March 31 2010 totaled at about 22 billion NIS compared about 15.2 billion NIS as of March 31 2009, an increase of about 44.7%. The growth emanates mainly from the growth in assets managed in the mutual funds (due to capital raising and rise in value) as well as a result of the continued expansion of activity in the area of exchange traded notes. The profit before tax from the activity in the capital and financial services sector reached during the first quarter of 2010 the sum of about 56 million NIS compared to about 34 million NIS in the first quarter 2009 an increase of about 65%.

The increase emanates mainly from the increase in the average scope of assets managed during the period of the report compared to the average scope of assets managed during the first quarter 2009 as well as increase in the income of the member of the exchange.

The share capital of the Group attributed to the shareholders of the company totals as of March 31 2010 about 3.5 billion NIS compared to a share capital of about 2.7 billion NIS as of March 31 2009. The increase in the share capital emanates from the quarter profits as well as the issue of capital to Clalit Health Services in consideration of its share in Dikla.

In the light of the profitability, and the company’s capital surplus regarding regulatory requirements the board of directors of the company authorized a dividend distribution in the sum of 107 million NIS.
Harel presents a sharp increase in EV. The embedded value of the Group totals about 6.1 million NIS. The embedded value of Harel Insurance including pension business as of December 31 2009 shot up to about 5.6 billion NIS compared to 3.9 billion NIS as of December 31 2008, a increase of about 46%. Of the embedded value about 1.5 billion NIS constitute adjusted share capital and about 4.1 billion NIS constitute current value of future profits minus tax and minus the required capital cost of about 140 million NIS. The Value of In-Force (VIF) in life and health insurances grew about 21% and totaled about 3.6 billion NIS. The VIF in pension totaled about 0.7 billion NIS, an increase of about 34% compared to the previous year.

The embedded value of Dikla as of Decenber 31 2009 shot up to about 543 million NIS compared to 391 million NIS as of December 31 2008, an increase of about 39%. Of the embedded value about 307 million NIS constitutes adjusted share capital and about 247 million NIS constitutes current value of future profits minus tax and minus required capital cost about 11 million NIS. The Value of In-Force (VIF) in life and health insurances increase by about 35% and totaled about 247 million NIS.

The total assets managed by the Group in insurance, pension funds, provident funds, mutual funds and financial services totaled as of March 31 2010 about 90 billion NIS.

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