POL I CY The Israeli Insurance, Pension & Finance Newspaper 18 Special edition 2022 to 1.221 billion shekels (up 890 million shekels) in the current report year was outweighed by the negative influences (1.015 billion shekels), of non-investment factors – riskfree interest (somewhat modified by the illiquidity premium), the cost of living index, the Winograd effect in 2020 due to the Supreme Court rulings, which was not repeated in 2021, an increase in the Pool’s losses, alongside a drop in underwriting profits (at a large share of the companies). Compulsory motor insurance, which led elementary earnings until 2015, succeeded, thanks to unusual investment profits, in making what is regarded as a tiny profit – a sign that there are many problems in the sector requiring immediate underwriting handling (as well as tariffs). Menorah Mivtachim Holdings was the largest company (726.6 million shekels), with the Phoenix topping the earnings rankings (209.1 million shekels). Splitting Shomera off from Menorah results in Shlomo being the company with the highest production (669.9 million shekels). Reinsurance is responsible for 39.7% of gross production and is declining, as a result of a hardening in the reinsurers’ positions. It is no secret that the reinsurance rich insurance companies incurred losses for the reinsurers, and there is a clear gradual worsening in the arrangements with the reinsurers following the deterioration in their results. Other property and others The other property and others sector is the second largest, with production of 5.669 billion shekels (2020: 5.329 billion shekels) and grew by 6.4%. The sector makes up 23.5% of total elementary production (slightly more that compulsory motor). The sector comprises mainly businesses, homes and engineering, which together are responsible for 90% of the production in the sector. In 2021, earnings in the sector totaled 722.5 million shekels – more than 50% of total elementary earnings and topping the elementary sector earnings rankings. Earnings came mainly from homes and partially from business and engineering insurances. The companies benefited from a far easier winter than in the previous year. The reinsurers represent a key factor in this sector in production and in profitability (67% of the gross premium) and contribute to the sector’s stability. Liabilities The liabilities sector is the smallest, with 17.3% of total elementary production (4.2 billion shekels out of a total of 23.6 billion shekels). Its share of overall elementary production grew this year as a result of a significant increase in the premiums (mainly in professional liability) – up 14.1% compared with 2020 (from 3.666 billion shekels 2021: ELEMENTARY SECTOR RETURNS TO NORMAL; UNDERWRITING LOSSES DRIVE EARNINGS DOWN 2022 Elementary Results Analysis Continued from previous page Company Gross premiums Investment profits Earnings net of investment profits Comprehensive income Harel 3,693 612 -571 41 Menorah Holdings 3,391 373 -36 336 Phoenix 3,155 448 37 485 Clal Insurance 2,819 266 -173 93 Ayalon 2,046 271 -328 -57 Migdal 1,872 379 -304 76 Direct Insurance 1,711 109 55 164 Shlomo 1,666 124 47 170 Hachshara 1,177 262 -236 26 AIG 935 37 -49 -12 Bituach Haklai 496 29 -4 25 Wesure 310 14 1 15 Libra 304 0.3 5 6 Total 24,112 2,951 -1,588 1,363 Insurance companies general insurance results 2021 (million shekels)
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