After an increase of virtually 190% in its share worth prior to now twelve months, and 98% for the yr up to now, Clal Insurance coverage Enterprise Holdings (TASE: CLIS) has determined to purchase 1% of rival insurance coverage firm Harel Insurance coverage Investments and Monetary Companies (TASE: HARL) for NIS 200 million. The vendor is the Hamburger household, the controlling shareholder in Harel, whose stake within the firm will fall to 45.3%.
So far as is thought, the Hamburger household, which on the finish of 2024 offered 2.5% of Harel to monetary establishments for NIS 250 million, doesn’t at current plan to promote extra shares. Does the insurance coverage sector have additional to rise? A minimum of Clal Insurance coverage apparently believes that it does.
At the moment, following the announcement of the deal by Clal Insurance coverage, insurance coverage shares rose strongly on the Tel Aviv Inventory Alternate, and the sector index is up some 2%. The whole sector continues to profit from the sharp rises on the native inventory market prior to now yr. Insurance coverage corporations are among the many principal beneficiaries of a rising marketplace for a number of causes. The primary is that they’re an possibility available on the market itself, since they achieve on their nostro portfolios, that’s, the securities and different belongings they maintain for themselves, and in addition from the rise within the values of the portfolios they handle for his or her clients and the administration charges they cost.
As well as, the brand new accounting normal IFRS 17 signifies that insurance coverage corporations can acknowledge future earnings within the numerous insurance coverage classes earlier, which has boosted their outcomes. They’ve additionally benefitted from an increase in premiums, particularly for car insurance coverage, lately.
Massive purchases by insurance coverage corporations of shares in different corporations within the sector are uncommon, as a result of they’re already invested in each other. With out permission from the Capital Markets, Insurance coverage and Financial savings Authority, an insurance coverage firm just isn’t allowed to carry greater than 5% of one other insurance coverage firm. With particular permission, the restrict rises to 7.5%.
In late 2024, Shlomo Eliahu, controlling shareholder in Migdal Insurance coverage and Monetary Holdings (TASE: MGDL) offered a 6% stake within the firm for NIS 412 million, and gave the monetary establishments an possibility to purchase an additional 6.16% for NIS 420 million.
The establishments exercised the choice on the finish of June this yr. In the course of final yr, Eliahu offered Migdal shares to Altshuler Shaham to the tune of NIS 163 million, in order that inside a yr he has dropped from a holding of 64.3% within the firm to 48.6%, in trade for a complete of some NIS 1 billion.
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Beforehand, the controlling shareholders in The Phoenix Holdings, US non-public fairness companies Gallatin Level and Centerbridge, offered their holdings at a big revenue, however they did so in July final yr, simply earlier than the sector took off. Had they waited, their revenue would have been significantly larger.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on July 23, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
