Harel Insurance Investments & Financial Services : Periodic Report for 2023 - translated version

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Harel Insurance Investments and Financial Services Ltd.

Periodic Report for 2023

Harel Insurance Investments and Financial Services Ltd.

	Periodic Report for 2023
Chapter 1	Description of the Company's Business
Chapter 2	Board of Directors Report
Chapter 3	Financial Statements
Chapter 4	Separate Financial Information for the Company
Chapter 5	Additional Information about the Company
	Corporate Governance Questionnaire
Chapter 6	Report concerning the effectiveness of the internal control over financial
	reporting and disclosure
Chapter 7	Annexes

This document is a Hebrew translation for informational purposes only. The Hebrew version is the binding version.

Harel Insurance Investments and Financial Services Ltd.

Members of the Board of Directors

Yair Hamburger - Chairman of the Board

Gideon Hamburger

Yoav Manor

Ben Hamburger - Deputy Chairman of the Board

Joseph Ciechanover

Doron Cohen

Eli Defes

Michel Siboni (From February 5, 2024)

Naim Najjar (External Director)

Efrat Yavetz (External Director)

Ayelet Ben-Ezer (External Director)

Harel Insurance Investments and Financial Services Ltd.

Chapter 1

Description of the Company's Business

Harel Insurance Investments and Financial	Periodic Report for 2023 -
Services Ltd.	Description of the Company's Business

Description of the Company's Business

• Pursuant to Regulation 8C of the Securities (Periodic and Immediate Reports) Regulations, 1970 ("Securities Regulations"), the provisions of Regulation 8A of the Securities Regulations in relation to the Periodic Report do not apply to a corporation that consolidated or proportionally consolidated an insurer or where the insurer is its affiliate, to the extent that this information refers to an insurer.
• The Company is a holding company, whose principal holdings are subsidiaries which are insurance companies, provident fund management companies, pension fund management companies, a mutual fund management company, and companies engaged in the finance and credit sectors.
• This report, in relation to the insurance, pension and provident business, is prepared in accordance with Section 42 of the Supervision of Financial Services (Insurance) Law, 1981, and the instructions of the Commissioner of Insurance by virtue of his powers under the aforementioned section concerning a description of company business in the periodic report of insurance companies, which prescribes, inter alia, the structure of the report and the information to be contained in the periodic report of insurance companies.
• This chapter is an inseparable part of the Periodic Report and the entire Periodic Report should be read as a single document.
• This chapter of the Periodic Report, which provides a description of the Company, its development, business and operating segments, also includes forward-looking information, as defined in the Securities Law, 1968. Forward-looking information is uncertain information concerning the future based on information in the company's possession at the time of publishing the report and which includes the company's assessments or intentions at the date of the report. Actual performance may differ substantially from the results estimated or inferred from this information. In certain cases, it is possible to identify sections containing forward-looking information by the appearance of the following words or phrases: "the Company/the Group estimates", "the Company/the Group believes", "the Company/the Group anticipates", and the like appear, and such forward-looking information may also be worded differently. Forward- looking information which appears in this report refers exclusively to the date on which it was written. The Company makes no undertaking to revise or change this information insofar as additional or different information in relation to the aforesaid information becomes available.
• For the avoidance of doubt, it is stipulated that the description presented in this report concerning the insurance products is a condensed description for the purpose of the report only, and that the conditions of the insurance products which are binding on the Group's insurers are those stipulated in the relevant policies which they have drawn up. Accordingly, the description presented in this report is not to be used to interpret the policies nor will it constitute a source of authority of any kind regarding the conditions of the insurance.
• For the avoidance of doubt, it is stipulated that the description presented in the report regarding services or products described in the credit segment, is a condense description for the purpose of the report only, and that the binding conditions of the services or products are exclusively those defined in the relevant arrangements and appropriate engagement documents for this operating segment.

		Harel Insurance Investments and Financial	Periodic Report for 2023 -
		Services Ltd.	Description of the Company's Business

• For the avoidance of doubt, it is stipulated that the description presented in the report concerning the conditions of the various pension and provident products is a condensed description for the purposes of the report only, and that their binding conditions are those prescribed in The Supervision of Financial Services (Provident Funds) Law, 2005 and subsequent regulations and in the pension fund and provident fund articles.
• For the avoidance of doubt, it is stipulated that the description presented in the report concerning the various mutual funds is a condensed description for the purpose of the report only, and that the binding conditions are those prescribed in the fund prospectuses and in the reports submitted by the fund manager.
• For the avoidance of doubt it is stipulated that the description presented in the report concerning the various exchange traded funds and/or mutual funds and/or certificates of deposit is a condensed description for the purpose of the report only, and that the binding conditions are those prescribed in the prospectuses and/or the immediate reports regarding the exchange traded funds and/or deposit certificates published by the issuers of these products.

Harel Insurance Investments and Financial	Periodic Report for 2023 -
Services Ltd.	Description of the Company's Business

Abridged Table of Contents

For the Chapter - Description of the Company's Business

Subject		Page
Foreword
1.	Part 1 - The Company's activities and description of business development	1-20
2.	Part 2 - Description of and information about the Company's operating segments	1-36
	2.1	Life assurance and Long-term Savings	1-36
	2.2	Health insurance	1-67
	2.3	Non-life (general) insurance	1-74
	2.4	Insurance companies overseas	1-93
	2.5	Credit segment	1-101
	2.6	Financial services and capital market activity	1-110
3.	Part 3 - Information about the Group's overall operations	1-124
4.	Part 4 - Corporate governance	1-170

Harel Insurance Investments and Financial	Periodic Report for 2023 -
Services Ltd.	Description of the Company's Business
		Contents
Foreword to Chapter 1 of the Periodic Report	1-16
1. The Company's activity and a description of its business development	1-20
1.1	The Company's activity and a description of its business development	1-20
	1.1.1	Diagram of holdings	1-20
	1.1.2	Material changes in the holding structure in 2023	1-20
	1.1.3	Incorporation and form of incorporation	1-21
	1.1.4	Control structure	1-21
	1.1.5	The Group's operating segments:	1-21
	1.1.6	Main points in the history of the Company's development	1-22
	1.1.7	Main points in the Group's development in 2023	1-23
	1.1.8	Main points in the Company's development after the Reporting Period	1-26
	1.1.9	Structure of the Group's operations	1-27
1.2	Concise description of the Group's operating segments	1-30
	1.2.1	Life assurance and long-term savings	1-30
	1.2.2	Health insurance	1-31
	1.2.3	Non-life insurance	1-31
	1.2.4	Insurance companies overseas	1-32
	1.2.5	Credit sector	1-33
	1.2.6	Capital market and financial services	1-33
1.3	Investments in the Company's equity and transactions in its shares	1-35
1.4	Dividend distribution	1-35
2. Description of and information about the Company's areas of activity	1-36
2.1	Life assurance and long-term savings	1-36
	2.1.1	Products and services	1-36
	2.1.2	Changes and trends in this segment	1-36
	2.1.3	Substitute products	1-61
	2.1.4	Competition	1-61
	2.1.5	Customers	1-65
2.2	Health insurance	1-67
	2.2.1	Products and services	1-67
	2.2.2	Changes and trends in this segment	1-70
	2.2.3	Competition	1-71
	2.2.4	Customers	1-73
2.3	Non-life insurance segment	1-74

Harel Insurance Investments and Financial	Periodic Report for 2023 -
Services Ltd.	Description of the Company's Business
	2.3.1	Products and services	1-74
	2.3.2	Trends and changes in the segment of operations	1-84
	2.3.3	Competition	1-84
	2.3.4	Customers	1-88
2.4	Insurance companies overseas	1-93
	2.4.1	Products and services	1-93
	2.4.2	Changes and trends in this area of activity	1-97
	2.4.3	Competition	1-98
	2.4.4	Customers	1-98
	2.4.5	Capital Requirements	1-99
2.5	Credit segment	1-101
	2.5.1	Financial information for the credit segment	1-101
	2.5.2	General and macroeconomic trends in the credit segment	1-101
	2.5.3	Products and services	1-102
	2.5.4	The Group's activity in development property and project financing	1-105
	2.5.5	Information at the level of the Group's entire activity in the credit segment	1-106
2.6 Financial services and capital market activity	1-110
	2.6.1	General information about this area of activity	1-110
	2.6.2	Structure of the segment and the applicable changes	1-110
	2.6.3	Legislative restrictions, regulations and special constraints that apply to this
		operating segment	1-111
	2.6.4	Changes in the scope of operations and profit in this segment	1-111
	2.6.5	Developments in the markets of this operating segment, or changes in the
		characteristics of its customers	1-112
	2.6.6	Critical success factors in this area of activity and the applicable changes	1-113
	2.6.7	Substitutes for products in this segment and the applicable changes	1-113
	2.6.8	Products and services	1-113
	2.6.9	Segmentation of income for products and services	1-117
	2.6.10New products	1-117
	2.6.11Customers	1-118
	2.6.12Marketing and distribution	1-118
	2.6.13Competition	1-119
	2.6.14Seasonality	1-120
	2.6.15Service providers	1-120
	2.6.16Restrictions and supervision of this area of activity	1-121
	2.6.17Material agreements	1-123

Harel Insurance Investments and Financial	Periodic Report for 2023 -
Services Ltd.	Description of the Company's Business
	2.6.18Joint venture agreements	1-123
3. Information about the Group's overall operations	1-124
3.1	Restrictions and supervision applicable to the operations of the Group's companies	1-124
	3.1.1	General	1-127
	3.1.2	Life assurance and long-term savings	1-129
	3.1.3	Health insurance	1-131
	3.1.4	Non-life insurance	1-134
3.2	Entry and exit barriers	1-134
	3.2.1	Entry barriers	1-134
	3.2.2	Exit barriers	1-136
3.3	Critical success factors	1-137
	3.3.1	General success factors	1-137
	3.3.2	Success factors specific to the insurance and long-term savings wing	1-137
	3.3.3	Success factors specific to the health insurance segment	1-138
	3.3.4	Success factors specific to the non-life insurance segment	1-138
	3.3.5	Success factors specific to the credit segment	1-138
	3.3.6	Factors specific to the success of the capital market and financial services segment1-138
3.4	Investments	1-139
	3.4.1	Structure of investment management	1-139
	3.4.2	Material investment activity	1-140
	3.4.3	Investment management policy	1-140
3.5	Reinsurance	1-142
	3.5.1	General explanation about the categories of reinsurance treaties	1-142
	3.5.2	Changes in reinsurance arrangements	1-146
	3.5.3	Changes in reinsurance arrangements after the Reporting Period	1-146
	3.5.4	Policy of exposure to reinsurers	1-147
	3.5.5	Life assurance and long-term savings	1-148
	3.5.6	Health insurance	1-149
	3.5.7	Non-life insurance	1-149
	3.5.8	Insurance companies overseas	1-150
	3.5.9	Exposure of the reinsurers to earthquakes	1-150
	3.5.10Additional information	1-151
	3.5.11Reinsurance results in non-life insurance (NIS million) )1(	1-151
	3.5.12Reinsurance results in the insurance companies overseas segment	1-152
3.6	Human Capital	1-153
	3.6.1	Material changes in the list of senior officers	1-154