Despite the positive stock market: Migdal's profits fell in the first quarter by 21.6%

Hai Migdal insurance and finance holdings decreased in the first quarter of 2024 by 21.6%, compared to the corresponding quarter – to NIS 109 million, and this despite the positive stock market that was in the quarter. The reports reflect growth in all lines of business: premiums and benefits jumped by 16% to NIS 7.4 billion.

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The volume of managed assets grew by 17% to NIS 435 billion. Migdal Ahezkot is managed by Yossi Ben Baruch, and Migdal Insurance is managed by Ronan Agassi. In recent months, the company entered into investments in new areas, and among other things, participated in the purchase of the controlling core of the Cellcom company.

Underwriting profits increased to NIS 147 million thanks to a property vehicle and an increase in premiums mainly due to an increase in the average premium in the automotive industry. Due to an accumulated negative real return from the beginning of 2022, no variable management fees were charged per quarter, but only fixed ones. The estimate of the management fees that will not be collected due to the negative real return, was reduced from approximately NIS 1 billion at the end of 2023 to half a billion NIS at the end of the quarter.

However, after the balance sheet date, rates fell, which increased the management fee "pit" to NIS 700 million. Life insurance profits before tax amounted to NIS 69 million compared to NIS 234 million last year due to a low release of reserves, resulting from the increase in interest rates as well as investment losses from non-collection of variable management fees.

The underwriting loss in general insurance amounted to NIS 2 million compared to a loss of NIS 27 million before tax in the corresponding quarter last year, mainly thanks to the shift to profit in the property vehicle industry. According to the estimates from the months of April and May, and according to the situation in the capital market, the second quarter reports will be less good.