How Does Harel Insurance Investments & Financial Services Company Work?

Harel Insurance provides a wide array of insurance policies, including health, non-life (motor, property, liabilities, and credit), and life insurance. Operational processes involve underwriting, claims management, and customer service. A significant market share in health insurance, with 38.3% as of the end of 2023, highlights its strong presence.

Asset management is conducted through Harel Finance and its subsidiaries. They manage pension funds, provident funds, mutual funds, portfolio management, and ETFs. As of March 31, 2025, assets under management (AUM) reached NIS 391 billion. This segment offers active portfolio management and alternative investment strategies.

The credit segment, operated through entities like Hamatzpen and Harel 60+, focuses on providing credit to medium businesses, mortgages, reverse mortgages, and financial guarantees. The credit portfolio reached NIS 6.5 billion as of March 31, 2025, increasing from NIS 4.4 billion on March 31, 2024.

Harel's integrated approach allows for cross-selling and holistic financial solutions, differentiating it from specialized competitors. This comprehensive model supports its value proposition. For more information about the company's structure, you can read about the Owners & Shareholders of Harel Insurance Investments & Financial Services.

Key milestones include the full ownership of Harel Insurance in 1984, the acquisition of Sahar Israel Insurance Company Ltd. in 1989, and Zion Holdings Ltd. in 1999. In 2013, Harel acquired the life and health insurance activities of Eliahu Insurance Company Ltd., and Harel Finance acquired portfolio management and mutual fund activities from Clal Finance Investment House. In October 2021, Harel Pension & Provident completed the transfer of Psagot Provident and Pension Funds Ltd.'s activities.

In Q1 2025, Harel completed the acquisition of the remaining 83% stake in Gamla Harel Residential Real Estate Ltd. for NIS 560 million. In January 2025, Harel, along with Amitim Senior Pension Funds, agreed to acquire a 44% stake in a partnership holding Enlight Renewable Energy projects for $50 million. These moves highlight Harel's strategic expansion into real estate and renewable energy investments.

Harel's competitive edge is sustained by its strong brand strength, comprehensive product offerings, and a robust financial position. As of year-end 2023, Harel is the largest insurer in Israel by premiums, holding a 23.5% market share. It leads in health insurance with a 38.3% market share and non-life insurance with 15.6%.

Harel's significant assets under management (NIS 514 billion as of Q1 2025) and consistent profitability, with comprehensive income to shareholders of NIS 1,133 million and a 13% ROE for 2024, further reinforce its competitive standing. The company continues to invest in digitalization and personalized insurance solutions to adapt to new trends and competitive threats.

As of the end of 2023, Harel Insurance was the largest insurer in Israel, with a 23.5% market share based on premiums. It leads in health insurance with a 38.3% market share and non-life insurance at 15.6%. In the pension fund management segment, Harel is the second-largest player with a 17.7% market share, and in provident funds management, it holds a 9.0% market share, both based on assets under management as of year-end 2023.

The company faces risks such as intense competition, which can limit premium adjustments and impact profitability. Rising operational costs and regulatory changes also pose challenges. Global financial market volatility, exacerbated by geopolitical events, can affect investment portfolios. Cybersecurity threats and climate-related damages are emerging risks that require continuous adaptation.

Harel's strategy includes improving profitability in insurance and asset management, and diversifying income sources. The company is expanding its credit activities, and focusing on digitalization and insurtech upgrades. Harel aims to sustain and expand its profitability through organic growth and strategic acquisitions, while continuously adapting to market trends and regulatory shifts. For more details on the company's marketing approach, you can refer to the Marketing Strategy of Harel Insurance Investments & Financial Services.

In 2024, Harel reported an underwriting profit improvement of NIS 173 million in its insurance business, reaching NIS 1,148 million. Asset management profit improved by 26% to NIS 293 million. These figures reflect the company's focus on profitability and efficiency. The company's performance is influenced by market dynamics and strategic initiatives.