Migdal Insurance Reports Stable Profit and 22.4% Return on Equity in Q2

Migdal Insurance concluded the second quarter of the year with a slight profit increase of about 1%, reaching approximately 575 million shekels. The company maintained a high return on equity of around 22.4%. Core operating profit grew by about 5% to 731 million shekels, driven mainly by improved underwriting profits in long-term savings and health insurance. However, a decline in the interest rate curve increased insurance liabilities, which reduced excess financial profits and impacted overall earnings despite strong market returns.

At the end of the quarter, Migdal's managed assets totaled about 631 billion shekels, primarily due to positive market returns and net growth in pension and provident fund accumulations, along with an increase in financial services assets, mainly mutual funds. Life insurance premiums amounted to roughly 1.6 billion shekels, a 5% decrease compared to the same period last year, but the segment's overall profit surged by 379% to 281 million shekels, thanks to core profit improvements and higher financial margins.

Health insurance premiums rose by about 6% to 557 million shekels, yet the segment recorded a 51% drop in pre-tax profit to 64 million shekels, mainly due to lower excess financial profit from the interest rate decline. General insurance profits also fell by 40% to 148 million shekels, affected by reduced core profits in auto insurance and the impact of interest rate changes on liabilities.

Long-term savings benefited from positive market trends, with pension fund fees growing 13% to 3.73 billion shekels and provident fund fees increasing 41% to 1.35 billion shekels. Migdal's CEO, Ronen Agassi, highlighted a record half-year core profit, driven by strict execution of the company's business strategy across all lines, with a 20% increase in premiums and fees and consistent growth in revenues and profitability. He emphasized Migdal's position as Israel's fastest-growing pension fund, benefiting from steady positive fund transfers.