Group Harel Published today (Monday) its financial statements in which it presents record profits in 2021. Total profit after tax in 2021 amounted to a peak of about NIS 1.52 billion, compared to a total profit of about NIS 834 million in 2020 – an increase of about 83% . The total profit in 2021 reflects a return on equity of approximately 18%.
The peak results in 2021 are based, among other things, on higher returns in the capital market, a re-application to update the liquidity premium rate that largely offset the sharp decline in the interest rate curve, an increase in fixed and variable management fees and a decrease in insurance liabilities as a result of actuarial research in health insurance. In 2021, Harel charged variable management fees due to the high yields on participating policies in the amount of NIS 416 million.
The total profit after tax in the fourth quarter of 2021 amounted to NIS 579 million, an increase of 36% compared to the corresponding quarter in 2020. The total profit for the quarter reflects a return on equity (in annual terms) of approximately 27%.
The total profit before tax in the health insurance sector in 2021 amounted to NIS 535 million, compared with a total profit before tax of NIS 77 million in 2020, an increase of 595%.
The total profit before tax in long-term savings activities (life insurance, pension, provident and continuing education) in 2021 amounted to NIS 909 million, compared with a total profit before tax of NIS 542 million in 2020, an increase of 68%.
On the other hand, the total profit before tax in general insurance in 2021 amounted to NIS 111 million, compared with a pre-tax profit of NIS 343 million in 2020. The decrease is due to an increase in the frequency of claims due to the increase in travel and vehicle theft and an increase in the average claim cost.
Distribute a dividend to shareholders and a bonus to employees
Simultaneously with the publication of the reports, the company’s board of directors announced the distribution of a dividend to shareholders in the amount of NIS 300 million. This distribution is in addition to the dividend distribution in the amount of NIS 357 million and the repurchase of the company’s shares in the amount of NIS 40 million made during 2021.
In addition, in light of the results, the company announced the payment of a special grant to employees, who complete the company with at least 6 months of experience, in the amount of NIS 10,000 per employee, and a total of NIS 50 million. This is in addition to the annual grant distributed to employees as is customary.
The capital attributed to the company’s shareholders amounted to NIS 8.9 billion – an increase of NIS 1.1 billion during 2021. This, as stated, after dividend distribution and repurchase of shares. As of the end of 2021, the company’s managed assets amounted to NIS 362 billion, compared with NIS 291 billion at the end of 2020. NIS 45 billion of this increase is organic growth and the remaining NIS 26 billion is attributed to the completion of the transaction to purchase provident funds and Psagot pension funds. From last October.
Michel Siboni, Chairman of Harel Insurance and CEO of the Harel Group, stated that “We conclude 2021 with an all-time record in total profit, which this year amounted to more than NIS 1.5 billion. At the same time, we ended 2021 with double-digit growth In terms of premiums, thanks to the realization of Harel’s technological advantages, the variety of services and products we offer our customers, the company’s human capital and the array of agents. “And thanks to the acquisition of Psagot and Shirbit’s activities, which contribute to activities in the areas of long-term savings and general insurance. We continue to explore additional business opportunities that are in line with our business strategy, to ensure continued growth in the coming years.”
Nir Cohen, CEO of Harel Insurance, said: “2021 began as a challenging year in the insurance industry, and at the end we were able to show growth in premiums in each of the areas of activity, along with a significant improvement in overall profit in most areas.”