POL I CY The Israeli Insurance, Pension & Finance Newspaper 16 Special edition 2022 2021 started with fanfares and is regarded as the year of exit from the economic crisis that hit during the Corona year – 2020. Corona did not disappear in 2021 (apart from a lockdown in January 2021) and in principle the country returned to normal starting in February 2021. Many unemployeds returned from subsidized unpaid leave, businesses slowly opened and despite the Corona waves (fourth and fifth) we learnt how to live with Corona. By the end of 2021, almost all business sectors, apart from tourism (overseas tourism) returned to the level of activity in 2019, prior to the onset of Corona, and prior to that. As far as general insurance is concerned, life alongside Corona and recovery of the economy brought with results that were contrary to expectations, and thus there is deep disappointment with the results It should be noted that the insurance companies succeeded in ending 2020 with earnings of 2 billion shekels in the elementary sector, despite the catastrophic first quarter in the capital markets. Whilst there was an improvement in the following quarters, total investment profits were lukewarm, at 850 million shekels for 2020 as a whole. In 2021, investment profits climbed sharply to 2.9 billion shekels, but despite this insurance company profits were reduced, at 1.362 billion shekels, compared with 1.994 billion shekels in 2020 – a 31.7% drop in overall sector earnings, the drop being felt mainly in the motor sectors (property and compulsory). The increase in other property and others and in liabilities was not enough to offset the decline in motor sector earnings. Production Production in the current period was only 6.4% higher (from 22.7 to 24.1 billion shekels), despite 8.4% growth in the economy, including an 11.7% increase in private consumption. This was expressed in massive increase in new car purchases, increased inventories and consumption of internal tourism. If we neutralize the 14% growth in liabilities – mainly in professional liability insurance, the growth in the other operating segments was small relative to the growth in economic activity and reflects the situation of competition and lower prices (mainly in the motor sectors) until the middle of the year followed by twists and turns at most of the companies. The production and earnings of Shirbit is divided into two – until November 2021 Shirbit was an insurance company, it ceasing to operate as an independent insurance company in December 2021 when its production started being included in Harel’s reports. The area of activity which in recent years was hit, motor property, is the only one to have posted a loss (whilst small – 25.9 million shekels – but still a loss) and with the biggest 2022 Elementary Results Analysis Hagai Shapira, Insurance Consultancy & Special Projects Advisory Elementary sector results in 2021 (million shekels) compared with 2020 Sector Gross premiums Investment profits Earnings net of investment profits Comprehensive income Change in production Change in investment profits Change in earnings net of investment profits Change in comprehensive income Compulsory motor 5,543 1,222 -1,058 164 248 5% 890 268% -1,150 -260 -61% Motor property 8,718 443 -469 -26 353 4% 310 232% -1,120 -810 from profit to loss Other property and others 5,669 169 554 723 339 6% 113 203% 155 268 59% Liabilities 4,182 1,117 -615 503 517 14% 789 240% -618 171 51% Grand total 24,112 2,951 -1,588 1,363 1,456 6% 2,102 247% -2,733 -632 -32% Investment Earnings net of Comprehensive 2021 General insurance sector results (million shekels) 2021: ELEMENTARY SECTOR RETURNS TO NORMAL; UNDERWRITING LOSSES DRIVE EARNINGS DOWN Appears that life alongside Corona and recovery of the economy brought with them results that were contrary to expectations, and thus there is deep disappointment with the results
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