Harel Insurance Investments and Financial Services (TASE: HARL) has reported a 30% rise in profit in the second quarter to NIS 1 billion - the highest quarterly profit of Israel’s big five insurance companies. The company reported return on equity of 37%.
Harel’s board of directors also announced that it has decided to update its dividend distribution policy to a quarterly distribution, instead of the semi-annual distribution policy that has been in place until now.
The insurance and finance company will distribute a dividend of NIS 400 million, while since the start of 2026, Harel has declared a dividend, along with a share buyback, totaling about NIS 1.5 billion. Harel’s stock has jumped over 50% since the beginning of the year to a market cap of NIS 37 billion.
According to Harel, the increase in profit was achieved "Due to an increase in investment profits and growth in core profits, led by the asset management, credit and capital areas, which showed an increase of 68% in the second quarter as a result of the continued growth in assets under management and an increase in the credit portfolio."
In the first half of 2026, profit increased at a more moderate rate of 19% to NIS 1.6 billion, and return on equity was 27% at the end of the first half.
In the insurance business, Harel's core profit before tax was NIS 699 million, up 4% from the corresponding quarter. Core profit is calculated based on an annual margin of 2%. In the half, core profit before tax from the insurance business was NIS 1.32 billion, down from NIS 1.36 billion in the corresponding period last year. The change was mainly due to the decrease in core profits from life and health insurance activities in the first quarter of the year due to a statistical increase in claims amounts in life risk products, which were partially offset by the improvement in core profits in general insurance.
The most prominent in the industry
Jefferies was impressed by Harel's reports and noted that it was "probably the most prominent in the industry, which saw one of the best quarters we remember for Israeli insurance companies."
The investment bank positively notes the acceleration in the diversification of profit sources and the improvement in returns. "In recent years, this was one of the areas in which Harel lagged behind, both in the nostro portfolio and in client portfolios. It seems that this period is over: personnel changes in the investment team and the appointment of a new chief investment manager last year led to significant improvement, and today Harel is one of the leading insurance companies in returns in nostro, pensions and provident funds."
Jefferies gives Harel a "Buy" rating, and did not update the price target set in January of NIS 150 per share - about 18% lower than the current share price on the TASE.
Published by Globes, Israel business news - en.globes.co.il - on August 26, 2026.
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