Kobi Haber, CEO of IDA Direct Insurance (photo by Kafir Sivan)
Direct Insurance summarizes the third quarter of 2022: growth of about 13% in the volume of premiums in all areas of activity to about 661 million NIS in the third quarter of 2022. Gross premiums from general insurance business grew by about 15% and amounted to about 503 million NIS , compared to a total of about NIS 437 million in the corresponding quarter, the company ended the quarter with a total profit of about NIS 2 million.
Highlights of the results of the third quarter for 2022: Gross premiums increased by about 13% in the quarter and amounted to about 660.7 million NIS compared to about 584.2 million NIS in the corresponding quarter. The increase in gross premiums was influenced by the volume of customers and the volume of activity in all the branches in which the company operates and the process of adjusting the rate to risk in the automotive branches and despite the cessation of activity in the personal accident product with the expiration of the permit to market it. The gross earned premiums amounted to approximately NIS 611.4 million compared to approximately NIS 583.8 million in the corresponding quarter, an increase of approximately 5%.
Gross premiums from general insurance business grew by about 15% and amounted to about NIS 503.4 million, compared to a total of about NIS 437.1 million in the corresponding quarter. The increase is due to an increase in the scope of activity and the number of customers as well as a process of adjusting rates in light of the increase in risk in the automotive industry, as mentioned.
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The gross earned premiums from life insurance business without savings grew by about 7%. The increase is mainly due to an increase in the number of customers and the scope of activity. The premium for savings products decreased by about 12% following the cessation of marketing of a savings product, followed by the launch of a new savings product (investment contract), which is not reflected in premiums. The total gross earned premiums from life insurance business grew by about 6% and amounted to about NIS 87.9 million, compared to a total of about NIS 82.7 million in the corresponding quarter.
The gross earned premiums from health insurance businesses totaled approximately 69.3 million NIS, compared to a total of approximately 64.4 million NIS in the corresponding period last year, an increase of approximately 8%. The increase is due to an increase in the number of customers and the scope of activity, despite the cessation of activity in the personal accident product. In the products of medical expenses, serious illnesses and trips abroad, the volume of premiums increased in the quarter by about 27%.
Net investment income including other total loss (before tax) amounted in the quarter to a total of approximately NIS 3.1 million compared to a total of approximately NIS 43.8 million in the corresponding quarter due to the trends in the capital market and the increase in interest rates. Profit from investments that are not attributed to profit-participating policies amounted to about NIS 7.5 million compared to a profit of about NIS 38.5 million in the corresponding quarter last year.
Selling, administrative and general expenses totaled approximately 150.3 million NIS compared to a total of approximately 139 million NIS in the corresponding quarter, an increase of approximately 8% due to the increase in input prices and wages in the economy, the increase in the scope of activity and an increase in accounting provisions due to class action lawsuits.
The total pre-tax loss in the general insurance sector in the quarter amounted to approximately NIS 19.0 million compared to a profit of approximately NIS 23.9 million in the corresponding quarter last year. The transition from profit to loss is due to a decrease in income from investments as well as a decrease in the underwriting profit that resulted from the significant increase in the frequency of theft accidents, and the prices of the parts required to repair the vehicles.
The total profit before tax in the area of life insurance and savings amounted to about 15.7 million NIS compared to about 26.3 million NIS in the corresponding quarter, a decrease of about 40%, which is due to a particularly low ratio of claims in the corresponding quarter. The total profit before tax in the field of health insurance amounted to about 11.2 million NIS compared to a profit of about 10.6 million NIS in the corresponding quarter, an increase of about 6%. The increase is mainly due to a decrease in the rate of expenses.
The total profit in the quarter amounted to about 1.9 million NIS compared to a total profit of about 47.5 million NIS in the corresponding quarter. The decrease is, as mentioned, mainly due to a decrease in underwriting profitability in the property vehicle industry, other property industries and in the life insurance industry due to an increase in the ratio of claims as well as a decrease in income from investments.
CEO of Direct Insurance, Kobi Haber: “Direct Insurance concludes another quarter of growth in the scope of premiums in all areas of activity. The company continues to develop as a multi-product company for the individual and the family, while providing an efficient service based on advanced technology and data and it will continue to strengthen the areas of life, health and apartment insurance as additional growth engines, alongside the automotive industry. The company ended the third quarter with a total profit of NIS 2 million, thanks to good profitability in life products, health and other property, which were offset by a loss in the automotive industry and a decrease in income from the capital market.
Haber also added: “In the property vehicle sector, we grew in premiums by approximately 18% compared to the corresponding quarter last year, and we believe that we will continue to see growth in the coming quarters as well. However, the vehicle sector (property and liability) continues to be challenging in the entire market, both due to the significant increase in The accidents and thefts are due to the increase in the prices of spare parts. We estimate that we will see a stabilization of the cost of the claim, even if at a high level, and that the car insurance market will reach a new equilibrium, something that will allow us to be among the first to move to profitability in the field.”
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