Significant improvement in profit: in Q3 net earnings amounted to NIS 416 million

A good chord in the financial statements published by Migdal. In the first nine months of 2021, a total profit of NIS 983 million was recorded, compared with a total loss of NIS 13 million in the corresponding period in 2020.
The significant improvement in profit is due to a significant increase in investment profit as well as due to an increase in underwriting profit. In the third quarter of 2021, a total profit of NIS 416 million was recorded, compared with a total profit of NIS 47 million in the corresponding quarter in 2020.
The total profit in the first nine months of 2021 was affected by increases in the capital markets, following which income from investments in the nostro portfolio was recorded in the amount of NIS 1 billion before tax (excluding designated bonds), compared with the corresponding period in the income of only NIS 173 million (excluding designated bonds). In addition, the company recorded variable management fees in the amount of NIS 776 million, compared with non-collection of variable management fees in the corresponding period in 2020.
The total assets under management amounted to NIS 350 billion, as of the end of September 2021, compared with NIS 295 billion at the same time in 2020 - an increase of about 19%. As of the date of publication of the reports, November 15, Migdal's total assets amount to approximately NIS 363 billion.
In the area of ​​life insurance and long-term savings, Migdal (+ 2.51% 530.7) recorded a total profit before tax of NIS 1.2 billion in the nine months of 2021, compared with a total loss of NIS 305 million before tax in the corresponding period in 2020. The increase in comprehensive income was affected by an increase in investment profit, which was reflected in the variable management fees in the profit-sharing policies and in the increase in the financial margin from investments that stand in opposition to policies that guarantee a return on life insurance. In addition, there has been an increase in investment profit in Makfet's nostro portfolio. Another factor that contributed to the jump was the change in the interest rate curve and market variables, which led to a decrease in reserves and an increase in overall profit in life insurance. In the reported quarter, a gross profit before tax of NIS 556 million was recorded, compared with a gross profit of NIS 32 million before tax in the corresponding quarter.
In the field of health insurance, Migdal concluded the nine months with a gross profit before tax of NIS 90 million, compared with a gross profit before tax of NIS 208 million in the corresponding period. The decrease in profit was mainly due to a decrease in the liquidity premium and changes in the interest rate curve, which led to an increase in long-term care provision in the amount of NIS 81 million, compared with a decrease in NIS 151 million in the corresponding period in 2021.
In the field of general insurance, Migdal recorded a total profit of NIS 50 million in the first nine months of 2021, compared with a total profit of NIS 99 million in the corresponding period. The decrease in profit was due to an increase in the company's liabilities in the field by NIS 52 million.
Ran Oz, Migdal's outgoing CEO, says I got a company with an average profitability of less than NIS 400 million, and after Sisyphean work of handling losing products, handling losing agents and creating profitable products and building management, we reached a total profit of NIS 675 million. . We had to make a revolution in the field of investments as well and we returned to being the leading investment arm in the field. We have reached the point where we are the first phone for anyone interested in offering a new deal. This is a situation that was not the case two years ago. And now there is fruit - the investments contributed NIS 811 million to profit. So we did all the right things and quarter after quarter we are in the right direction. The market knew how to appreciate. "