The total loss of a group Harel In the first half of 2022 it amounted to about NIS 110 million, compared to a total profit of about NIS 560 million in the first half of 2021. The total loss in the second quarter alone amounted to about NIS 436 million, compared to a profit of NIS 306 million in the corresponding quarter last year.
The results in the half and the quarter were adversely affected, among other things, by negative returns in the capital markets, by the failure to collect variable management fees due to negative real returns on the assets standing against yield-dependent liabilities, by repeated implementation of the update of the demographic discount system in life insurance and pension funds, and by underwriting deterioration in the property vehicle industry. On the other hand, the increase in interest rates led to a decrease in insurance liabilities.
The total profit before tax from the management of pension funds in the first half amounted to 31 million NIS, a decrease of 16% compared to the first half of 2021. The total profit before tax in the quarter amounted to about 16 million NIS, a decrease of about 16% compared to last year.
Income from management fees fell due to the declines in the markets
The revenues from management fees in the first six months of this year and in the second quarter totaled approximately NIS 259 million and NIS 128 million, respectively, compared to NIS 473 million and NIS 215 million in the corresponding periods last year. The main decrease in the management fees is due to the non-collection of variable management fees (which are collected when the returns are positive in the policies that participate in the profits). In the corresponding periods last year, variable management fees of NIS 231 million and NIS 91 million were collected, respectively.
The estimated management fees that will not be collected due to the negative return until a positive cumulative return is achieved amounted to approximately NIS 324 million. Close to the date of publication of the financial statements, following increases that occurred in the capital markets, the estimated management fees that will not be collected as mentioned amounted to NIS 268 million.
The car insurance activity is also loss-making
As mentioned, Harel recorded losses in the field of car insurance, thus joining other insurance companies that have published their reports so far. In the field of compulsory vehicle the loss in the first half of the year was NIS 18 million and in property vehicle (comprehensive and third party) NIS 144 million. In the second quarter, the losses amounted to NIS 23 million in debt and NIS 74 million in property. The reasons for the losses are an increase in accidents due to the excessive use of vehicles and an increase in thefts due to the increase in the cost of spare parts – which in turn contributed to the losses.
In the field of general insurance as a whole, which also includes home and business insurance, the total profit before tax in the first half amounted to about NIS 37 million, compared to NIS 85 million in the first half of 2021. In the second quarter, a loss was recorded in the area of about NIS 17 million, compared to a total profit before A tax of about NIS 43 million in the corresponding quarter last year.
In the field of health insurance, where Harel is the largest company in Israel with approximately 40% of the market share, the total profit before tax in the first half amounted to approximately NIS 391 million, compared to a total loss before tax of approximately NIS 13 million in the first half of 2021. However, The total loss in the second quarter amounted to approximately NIS 201 million, compared to a total profit before tax of approximately NIS 86 million in the corresponding quarter. The loss in the quarter is mainly due to the capital market returns which were lower than the returns in the corresponding quarter.
Despite the losses in the bottom line of the reports, the total gross earned premiums, remuneration fees and receipts for investment contracts in the first half of 2022 amounted to approximately NIS 18.7 billion, an increase of approximately 24% compared to the first half of 2021. In the second quarter the total gross earned premiums, fees The rewards and receipts for investment contracts amounted to approximately NIS 8.9 billion, an increase of approximately 14%.
The scope of the group’s managed assets as of June 30 amounted to approximately NIS 351 billion. Close to the publication of the financial statements, the volume of assets increased to a total of approximately NIS 363 billion.