SUMMARY OF FINANCIAL RESULTS F O R T H E P E R I O D 2 0 1 7 - PowerPoint PPT Presentation

SUMMARY OF FINANCIAL RESULTS F O R T H E P E R I O D 2 0 1 7

DISCLAIMER This document has been prepared by Harel Insurance Investments and Financial Services Ltd. (hereinafter: the Company) solely for the purpose of presenting the Company's business. The information contained in this document has not been independently verified. No representation or warranty has been expressed or implied and there should be no reliance on the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the Company nor any of its employees or representatives shall bear any liability whatsoever (whether due to negligence or otherwise) for any loss howsoever resulting from using this document or its content or otherwise arising in connection with this document. This document is provided solely for your information and may not be reproduced, distributed or forwarded, directly or indirectly, in any form to any other person, nor published, wholly or partially, for any purpose. This document contains information that under Israel’s Securities Law, 5728-1968, may be deemed or considered Inside Information of Harel Insurance Investments & Financial Services Ltd. Any use of Inside Information is illegal. Distribution of this document may be restricted by law and persons receiving this document should be aware of such restrictions and observe them accordingly. In receiving this report you agree to be bound by the foregoing instructions. Statements concerning the Company’s future business, financial position and results of operations are subject to risks and uncertainties, which may cause actual results to differ materially from those forecasted. Such forward-looking information includes, but is not limited to, product demand, pricing, changing economic conditions, product and technology development risks, the effect of the Company's accounting policies as well as certain other risk factors which are specified from time to time in the Company's reports to the Securities Authority. 2

ABOUT US Harel Insurance Investments & Financial Services Ltd. # LARGEST PLATINUM PLUS + AA RATING** OVER 3 MILLION INSURANCE RATING FROM MAALA CLIENTS COMPANY IN CSR 3 YEARS IN A ROW * ISRAEL 3 * Measured according to income from premiums for the period YTD9.17 ** The rating refers to Harel Insurance, a wholly owned subsidiary of Harel Insurance Investments & Financial Services

ABOUT US about Harel Insurance Investments & Financial Services Ltd. ( N I S B I L L I O N ) Data is correct for December 31 st , 2017 about about about about Solvency II - surplus Market cap Total earned Assets Under Equity attributed (at December 31, (at March 25 th , premiums and Management to shareholders 2016) 2018) contributions (AUM) 4

COMPREHENSIVE INCOME AFTER TAX AND ROE (IN ANNUAL TERMS) ( N I S M I L L I O N ) COMPREHENSIVE RETURN ON EQUITY INCOME AFTER TAX* * 846 846 533 * 423 16% 16 381 11 11% 9% 8% 2014 2015 2016 2017 2014 2015 2016 2017 5 * Results of the non-life segment for 2016 include the effect of the revised outstanding claims in compulsory motor and liabilities sectors in respect of the Winograd recommendations in the amount of NIS 201 million before tax. At December 31, 2017, provision for the foregoing amounted to NIS 270 million before tax. It is emphasized that in 2017 there was no change in the methods and assumptions used to calculate this provision

EARNED PREMIUMS AND CONTRIBUTIONS, GROSS + 15.5% ( N I S M I L L I O N ) + 7.5% 23,565 + 9% 20,401 3,254 18,978 2,420 17,410 1,931 7,221 1,754 6,273 PROVIDENT CONTRIBUTIONS 5,516 4,875 443 PENSION CONTRIBUTIONS 301 258 3,145 215 INSURANCE COMPANIES OVERSEAS 2,944 3,066 3,198 NON-LIFE INSURANCE 4,424 4,163 3,964 HEALTH INSURANCE 3,571 LIFE ASSURANCE 5,078 4,300 4,243 3,797 2014 2015 2016 2017 6

ASSETS UNDER MANAGEMENT (AUM) AND NOSTRO ASSETS ( N I S B I L L I O N ) 213.9 8.5 185.1 15.0 179.3 178.4 8.4 18.8 161 8.9 8.7 13.2 36.6 15.3 14.1 8.5 17.8 12.1 24.7 31.7 33.7 119.1 55.0 32.9 29.6 2.9 101.5 100.3 29.0 6.0 44.3 PORTFOLIO MANAGEMENT * 19.5 27.2 3.6 2.3 3.1 3.6 37.1 17.0 31.4 20.8 24.2 ETNS 25.4 80.0 22.2 23.4 MUTUAL FUNDS 69.7 19.4 64.2 61.0 13.8 54.9 11.7 PROVIDENT FUNDS 47.1 41.3 39 PENSION FUNDS INSURANCE 2010 2011 2012 2013 2014 2015 2016 2017 7 * Including the offsetting of inter-company balances

COMPREHENSIVE INCOME BEFORE TAX FROM OPERATING SEGMENTS ( N I S M I L L I O N ) 1,233 284 34 6 819 205 159 574 110 64 OTHER CAPITAL 5 462 150 FINANCE 287 8 101 INSURANCE COMPANIES OVERSEAS 123 5 74 2 594 NON-LIFE INSURANCE * 140 158 298 HEALTH 164 127 (3) (7) LONG-TERM SAVINGS 2014 2015 2016 2017 8 * Results of the non-life segment for 2016 include the effect of the revised outstanding claims in compulsory motor and liabilities sectors in respect of the Winograd recommendations in the amount of NIS 201 million before tax. At December 31, 2017, provision for the foregoing amounted to NIS 270 million before tax. It is emphasized that in 2017 there was no change in the methods and assumptions used to calculate this provision

NON-LIFE INSURANCE SEGMENT – COMPREHENSIVE INCOME BEFORE TAX ( N I S M I L L I O N ) 287 205 64 123 13 55 47 74 53 15 MORTAGE INSURANCE 34 56 59 LIABILITIES & OTHER BRANCHES 105 PROPERTY & OTHER BRANCHES 129 77 88 MOTOR PROPERTY 51 14 COMPULSORY MOTOR (12) 2014 (21) (24) 2017 (65) (49) 2016 2015 9 Including a revision of the outstanding claims in compulsory motor and liabilities sectors in the amount of NIS 201 million before tax for 2016. At December 31, 2017, provision for the foregoing amounted to NIS 270 million before tax. It is emphasized that in 2017 there was no change in the methods and assumptions used to calculate this provision

LIFE ASSURANCE AND LONG-TERM SAVINGS SEGMENT - COMPREHENSIVE INCOME BEFORE TAX ( N I S M I L L I O N ) 594 39 68 298 PROVIDENT 44 487 164 69 PENSION 127 55 LIFE INSURANCE 20 185 54 69 53 40 2015 2014 2016 2017 10

FINANCIAL SERVICES SEGMENT ( N I S M I L L I O N ) 304 300 253 202 64 REVENUS 34 8 COMPREHENCIVE INCOME (3) (LOSS) BEFORE TAXES* 2014 2015 2016 2017 11 * Comprehensive income before tax includes a write-down for the value of mutual fund activity in the amount of NIS 75 million and NIS 68 million before tax, for 2016 and 2015 respectively ללוכ ןוכדע תועיבתה תויולתה יפנעב בכר הבוח תויובחו ןיגב תוצלמה דרגוניו ךסב לש כ- 25 ינוילימ ש"ח, 175 ינוילימ ש"ח, ו- 201 ינוילימ ש"ח ינפל סמ תופוקתל 46/2016, 16/2016 * ו- 112/2016 המאתהב.

EQUITY – HAREL INSURANCE INVESTMENTS AND FINANCIAL SERVICES +8% +5% +4% 5,564 ( N I S M I L L I O N ) 5,167 167 4,912 912 4,724 724 2014 2015 2016 2017 320 235 171 461 DIVIDEND (NIS MILLION) * 7.5 6.3 5.5 10.2 DIVIDEND YIELD (%) 12 * On March 26, 2018, the Board of Directors approved a dividend distribution in the amount of NIS 107 million (NIS 0.5 per share)

HAREL INSURANCE CAPITAL REQUIREMENTS - OLD REGIME +21%* ( N I S B I L L I O N ) +16%* 7.6 7.1 6.8 1.7 1.4 1.2 5.9 5.7 5.6 SURPLUS CAPITAL REQUIRED CAPITAL 2015 2016 2017 13 * Represents a change in surplus capital

HAREL INSURANCE CAPITAL SOLVENCY REQUIREMENTS - SOLVENCY RATIO 123% SOLVENCY RATIO 206% ( N I S B I L L I O N ) 1.9 It is emphasized that the model in its current format is extremely sensitive to changes in market and other variables 5.1 6 8.5 4.7 SURPLUS CAPITAL 1.8 REQUIRED CAPITAL 2016 2016 MCR INCLUDING (MINIMUM TRANSITIONAL CAPITAL PROVISIONS* REQUIRMENT) 14 * At December 31, 2016, the requirement is 60% of the SCR. The economic solvency ratio report for data at December 31, 2017 will be published on the website on the date of publication of the Periodic Report at June 30, 2018

םיסנניפו חוטיב לארה CAL CALCULA CULATING A TING A NE NEW ROUTE W ROUTE 15

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