The rating company Midroog ranks for the first time the Harel Investments Group and the Harel Insurance Company and determines the following ratings:
Determining Aa2.il rating In a stable horizon, the Harel Group invests in insurance and financial services.
Determining Aa1.il rating On a stable horizon for financial strength (IFS) of Harel Insurance
Setting Aa2.il (hyb) rating In a stable horizon for deferred liabilities (complex tertiary capital and inferior secondary capital) raised through the subsidiary Harel Insurance Financing and IPOs.
Determining Aa3.il (hyb) Rating In a stable horizon for deferred liabilities (complex secondary capital and Tier 2 capital instrument) raised through the subsidiary Harel Insurance Financing and IPOs.
As part of Harel Insurance’s rating report, Midroog noted, among other things:
· The company’s rating reflects a strong business profile, supported by the company’s size in terms of premiums and managed assets, and characterized by a relatively good distribution of business lines, significant market shares in all insurance industries (the insurer with the highest market shares in health insurance and general insurance). And a broad customer base, which has the potential to generate future revenue. “
“The company has a strong brand, a significant customer base and good control of the distribution system that supports the ability to generate revenue throughout the cycle. The company is the largest insurance company in Israel for a long time.”
· “The company is the largest insurer in the fields of health insurance and general insurance, and holds significant market shares over time of the total gross earned premiums in these sectors of about 38% and 15% respectively. The business profile is supported by relatively good business lines, reflected in “The last 12 months – life insurance (about 45% on average of the total gross premiums and management fees), general insurance (about 22%) and health (about 33%), which support the ability to generate income throughout the cycle.”
· “The company has worked in recent years to implement a strategic plan, based on the development of digital capabilities while analyzing and using existing data in the company, in a way that the company has implemented in all areas of activity advanced digital tools and processes, in view of customer needs. “January 1, 2020. In our opinion, these constitute a competitive advantage and a prominent business position for the better than the main competitors in the industry. We believe that insurers who do not adopt technological innovation and adapt the business model over time may experience significant erosion in business positioning.”
· “The company is characterized by low product risk, which supports the underwriting ability and reduces the insurance risk, given a higher level of certainty regarding the scope of claims. The risk of products in the general insurance and health for a short time is estimated by us as appropriate to the ranking. The last months ended September 30, 2020 are for “short-tail” insurance contracts, which we believe are characterized by a lower level of insurance risk compared to “long-tail” contracts, which are characterized by higher uncertainty and lower business flexibility for changes in the business environment.
“” The company is well positioned to compete with the automotive industry with a basket of products including the Harel Switch brand, which is also expected to support better control over the structure of expenses as the weight of these policies in total works increases. “
In the rating report of the Harel Investments Group, Midroog stated, among other things: “The company has solid financial flexibility derived from a stable and conservative financial policy in relation to the comparison group, which is reflected in outstanding leverage and coverage in relation to the rating … In our opinion, the company’s financial policy is expected And is conservative and testifies, among other things, to the degree of conservatism of the company’s management regarding liquidity management and strict risk management over time. “
In conclusion: Midroog ranks the Harel Group for the first time and in fact we will have a double rating for Harel Insurance, both rating and s & p in the AA + rating. And for the first time, we rate Harel Investments (only by Midroog) – its rating will be Aa2 which is actually equivalent to the AA rating.