Menora Mivtachim Group shows a significant increase in return on equity and net profit in both the first nine months of 2023 and the third quarter.
Return on equity (in annualized terms) in the first nine months of 2023 is 12.1%. Net profit amounted to NIS 534 million compared with net profit of NIS 219 million in the corresponding period last year. Underwriting profitability totaled NIS 688 million (before tax) compared with underwriting profitability of NIS 531 million (before tax) in the corresponding period last year.
Return on equity (in annual terms) in the third quarter was 18.3 percent. Net profit amounted to NIS 270 million compared with net profit of NIS 182 million in the corresponding period last year. Underwriting profitability totaled NIS 326 million (before tax) compared with underwriting profitability of NIS 205 million (before tax) in the corresponding period last year.
Profitability was achieved from a variety of companies and areas of activity in the Group, deriving mainly from high underwriting profitability in the Group's core activities and is not materially affected by one-time operations.
Menorah Mivtachim Insurance's solvency ratio excluding the deployment period continues to grow and stands at 154.5% as of June 30, 2023 – compared to 144.5% as of December 31, 2022. As of June 30, 2023, the capital surplus is NIS 2.5 billion.
Since the beginning of the year, the company has distributed dividends totaling NIS 175 million.
Total premiums and remuneration fees collected by the Group in the first nine months of 2023 totaled NIS 22.5 billion, compared with premiums and remuneration fees totaling NIS 20.5 billion in the corresponding period last year – an increase of about 9.7%. The growth rate in the third quarter was 12.4%.
Total assets in shekels compared with NIS 277 billion as of December 31, 2022. The Company's equity attributable to shareholders amounted to NIS 6.3 billion compared with NIS 5.9 billion as of December 31, 2022.
The effects of the war are not reflected in the report and at this stage the Company does not expect a material impact on fourth quarter results or solvency results.
Key data, photo: Menora Mivtachim
Michael Kalman, CEO of Menora Mivtachim Insurance: "We conclude the reports with a very high return on equity and net profit (both at the cumulative annual level and in everything related to the third quarter) and focused growth in line with the Group's objectives.
Most of the profitability derives from high underwriting profitability in the Group's core activities and with one-time effects that are not material.
The Group's activity, which is characterized, inter alia, by leadership in pensions, elementary insurance, significant capital surpluses and a diverse mix of activities, reflects its profitability and growth potential, as reflected in the reports and in accordance with the Group's trend in recent years. These strengths are evident even during challenging and volatile periods in the capital market, so that the Group manages to generate significant profit over a period of time."
Main results of the financial statement
Solid profitability in the Group's range of areas of activity
Menora Mivtachim Groupreports a total profit attributable to shareholders of NIS 534 million after tax in the first nine months of 2023, compared with a total profit of NIS 219 million. In the corresponding period last year (total profit of about NIS 270 million in the third quarter of 2023 compared with a total profit of about NIS 182 million in the corresponding quarter of last year).
Total profit before taxfrom general insurance inthe first nine months of 2023 amounted to about NIS 358 million compared with a total profit of about NIS 153 million in the corresponding period last year (total profit of about NIS 211 million in the third quarter of 2023 compared with a total profit of about NIS 78 million in the corresponding quarter of last year).
Total profit before tax from the pension business in the first nine months of 2023 amounted to about NIS 136 million compared with a total profit of about NIS 122 million inthecorresponding period last year (a total profit of about NIS 52 million in the third quarter of 2023 compared with a total profit of about NIS 40 million in the corresponding quarter of last year).
Total profit before taxfrom life insurancein the first nine months of 2023 amounted to about NIS 113 million compared with a total loss before tax of about NIS 176 million in the corresponding period last year (a total profit of about NIS 71 million in the third quarter of 2023 compared with a total loss of about NIS 7 million in the corresponding quarter of last year).
Total profit before taxfrom health insurancein the first nine months of 2023 amounted to about NIS 24 million compared with a total profit of about NIS 212 million in the corresponding period last year (a profit of about NIS 54 million in the third quarter of 2023 compared with a total profit of about NIS 38 million in the corresponding quarter of last year).
Main results of activity, photo: Menora Mivtachim
Pre-tax profit analysis, photo: Menora Mivtachim
Profit-focused growth
Total premiums and remuneration fees collected by the Group in the first nine months of 2023 totaled about NIS 22.5 billion compared with premiums and remuneration fees of about NIS 20.5 billion in the corresponding period last year – an increase of about 9.7% (a total of about NIS 8.0 billion in the third quarter of 2023 compared with about NIS 7.1 billion in the corresponding quarter of 12, an increase of about 4.<>%).
Premiums and remuneration fees, photo: Menora Mivtachim
Leadership and strengths
Key data, photo: Menora Mivtachim
Consistent profitability and growth in equity over time
Financial Resilience, Photo: Menora Mivtachim
The main components that affected the results in the reporting period
- Underwriting profits
Underwriting profit, photo: Menora Mivtachim
Underwriting profit, photo: Menora Mivtachim
- Income/losses from investments: The real return during the reporting period was positive and higher than the normative return, while the third quarter and the corresponding periods last year were characterized by declines in the capital market and a real return lower than the normative return.
- Effect of the interest rate curve: The effect of the interest rate during the reporting period led to a decline in insurance liabilities totaling about NIS 122 million (a decrease in insurance liabilities of about NIS 155 million in the third quarter). The effect of the interest rate last year reduced insurance liabilities by about NIS 946 million (a decrease in insurance liabilities of about NIS 209 million in the third quarter of last year).
- Updating actuarial discounts: During the reporting period, morbidity and cancellation discounts in the health sector were updated. As a result, the Company increased its insurance liabilities in the health sector by approximately NIS 14 million. In the corresponding period last year, demographic assumptions were updated in accordance with the circular "Amendment of the provisions of the consolidated circular regarding the measurement of liabilities – updating the demographic discount system in life insurance and pension funds" and an update to the morbidity assumption was made.As a result, in the corresponding period last year, the Company increased its insurance liabilities in life insurance by NIS 137 million and in health insurance by NIS 28 million, and in the third quarter of last year the provision for class actions increased by about NIS 16 million.
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