Clal Insurance Reports Record Profits and Launches First-Ever Share Buyback Program

Clal Insurance and Finance, led by CEO Yoram Naveh, reported a net profit of 614 million shekels for the second quarter of 2026, marking a 16% increase compared to 531 million shekels in the same quarter last year. However, this comparison is affected by a one-time 100 million shekel provision in the previous year related to a VAT ruling on foreign exchange commission income. Adjusting for this, the net profit actually declined slightly by 2.8%, mainly due to lower investment income compared to exceptional returns last year. The company achieved a 22.5% annual return on equity, slightly down from 23.2% in the prior year.

In a historic move, Clal's board approved its first-ever share buyback program of up to 200 million shekels, alongside an interim dividend of the same amount paid by its insurance subsidiary. This marks a shift from previous practice of waiting for annual reports to distribute dividends. The interim dividend and buyback combined are double the total dividends paid in 2025 and four times those in 2024. This change follows a decade-long period of dividend drought caused by regulatory capital constraints. Now, with a solvency ratio well above regulatory minimums and billions in excess capital, Clal is accelerating shareholder returns and aligning with international financial sector standards.

Clal’s core operating profit before tax reached a record 732 million shekels, a 21% increase from 604 million shekels last year. Growth drivers included a 36% rise in general insurance core profits to 275 million shekels, a 29% increase in life insurance and long-term savings profits to 130 million shekels, and a 23% jump in credit card and payment sector profits to 123 million shekels. The subsidiary Max contributed 111 million shekels, benefiting from credit portfolio growth and improved transaction volumes.

Within general insurance, mixed trends emerged: compulsory vehicle insurance shifted from a 24 million shekel underwriting loss last year to a 30 million shekel profit due to improved claims and cautious reinsurance management. Conversely, property vehicle insurance profits declined sharply from 52 million to 18 million shekels, with the combined ratio rising from 83% to 92%. Clal avoided price wars to protect market share, offsetting losses with gains in liability, engineering, and warranty insurance, leading to a 36% increase in general insurance core profits.

Total inflows to the group rose 15% to 7.8 billion shekels, driven by a 27% surge in provident fund deposits to 1.33 billion shekels and a tripling of financial savings policy deposits to about 1 billion shekels. Pension fund deposits grew 6% to 2.93 billion shekels, while traditional insurance premiums remained stable. Management fees increased significantly across provident funds, pensions, and life insurance. Under IFRS 17 accounting, Clal’s contractual service margin (CSM), representing future unearned profits, grew to approximately 10.44 billion shekels by quarter-end. Assets under management rose 9% year-to-date to a record 456 billion shekels, with pension funds accounting for 203 billion shekels. Shareholders’ equity grew 7% since the start of the year to about 11.54 billion shekels, a 58% increase since December 2023, with a solvency ratio of 180%, well above regulatory and board targets.