The profits of Clal Insurance Enterprise Holdings, the insurance arm of the Clal concern, which includes Clal Insurance, Ararat Insurance, and Aryeh Insurance Co. of Israel, fell significantly in the second quarter of 2000. The company's net profit totaled NIS 48 million, compared with NIS 87 million in the corresponding quarter last year.
The decline in profits was due to both a fall in the profits in the life insurance branch and a sharp drop in the general insurance branch. Second quarter profits in the life insurance branch amounted to NIS 80 million, compared with NIS 92 million in the corresponding quarter last year.
Company management explained that the drop in income from securities investments of revenues from participating policies caused a corresponding decline in income of insurance companies from management fees from these policies, compared with the corresponding quarter of last year. A rise in the number of death and disability claims was also posted.
Profits from general insurance business posted an even steeper decline. These profits totaled NIS 11 million in the second quarter, compared with NIS 37 million in the corresponding quarter of 1999. The decrease was particularly prominent, given police figures of a 11.3% fall in the number of vehicle thefts in the first half of the year, compared with the corresponding period last year. The number of business break-ins also posted a decline of 8.7%, while a fall of 9.6% was posted in the number of home break-ins.
At the same time, the Clal Insurance management reported that the dive in general insurance branch profits was due to the erosion of premium rates, the fall in the group's income from investments, and the rise in the rate of property insurance claims, particularly in the business insurance branch.
Published by Israel's Business Arena on August 23, 2000