Regulatory Filings • Jul 12, 2023
Regulatory Filings
Open in ViewerOpens in native device viewer
July 11, 2023
..................................................................................................................................
Mark Nicholson, London, 44-20-7176-7991 [email protected]
Matan Benjamin, 972-3-7539716 [email protected]
Please note that this translation was made for convenience purposes and for the company's use only and under no circumstances shall obligate S&P Global Ratings Maalot Ltd. The translation has no legal status and S&P Global Ratings Maalot Ltd. does not assume any responsibility whatsoever as to its accuracy and is not bound by its contents. In the case of any discrepancy with the official Hebrew version published on July 11, 2023, the Hebrew version shall apply.
| Overview3 | |
|---|---|
| Rating Action 3 | |
| Key analytical factors3 | |
| Outlook 4 | |
| Downside scenario 4 | |
| Environmental, Social, And Governance5 |
| ESG Credit Indicators: E-2, S-2, G-2 5 | |
|---|---|
| Related Criteria And Research5 | |
| Ratings List 5 |
On July 11, 2023, S&P Maalot raised its issuer credit rating on The Phoenix Insurance Company Ltd. to 'ilAAA' from 'ilAA+' and its issuer credit rating on The Phoenix Holdings Ltd. to 'ilAA' from 'ilAA-'. We also raised our ratings on the junior subordinated issues of core group subsidiary The Phoenix Capital Raising 2009 Ltd. and on the senior debt of The Phoenix Holdings Ltd. to 'ilAA' from 'ilAA-'.
The upgrade reflects the continuous improvement in Phoenix's operating performance and capital base, and the growth in cashflows derived from non-insurance operations that strengthen its competitive position.
Phoenix continues to perform strongly compared with our expectation and peers in the Israeli market, as reflected, inter alia, in average ROE of about 15% in the last five years. The Company has diverse lines of business, which balance between extensive life insurance and general and health insurance. Based on Phoenix Agencies' high distribution capabilities, the Company's market share by premiums at year-end 2022 was about 17% in life insurance, about 14% in general insurance and about 19% in health insurance. The Company has been implementing strategic plans that include investing in
technological capabilities and in exploitation of internal synergies, which, we believe, will enable it to continue growing. In accordance with the strategic plan, we expect Phoenix to demonstrate an annual increase of 2%-3% in premiums and a decrease in the rate of expenses.
Phoenix is endeavoring to increase its cashflows from non-insurance operations (about 40% of total profit in 2022) through acquisitions and organic growth. The growth in non-insurance operations contributes to the Company's business diversification and strengthens its competitive position and business profile. Furthermore, we believe that the increase in cashflows from non-insurance operations (agencies, Excellence, Gamma) enhances Phoenix Holdings' liquidity profile, which becomes more diversified and reduces the dependency on insurance operations which are subject to intense regulatory supervision.
We believe Phoenix's capital base remained robust in recent years despite the slowdown resulting from the pandemic and challenging market conditions in 2022, whether measured using S&P's model or based on a regulatory solvency basis. Although the Company's stated goal is to maintain a Solvency II coverage ratio of 170%-150%, in practice this ratio was 211% in December 2022, 190% in 2021 and 192% in 2020. We estimate that the Company will continue to maintain a solid capital base. In our assessment of the capital and expectations for future growth, we take into account the Company's current dividend policy according to which it will distribute at least 30% of the group's total profit.
The stable outlook on Phoenix Insurance reflects our view that it will maintain its leading business position in the next 18-24 months. Our view is supported by its diversified business model and sound profitability, supporting its capital growth. At the same time, we believe its capital adequacy will strengthen and remain adequate in relation to balance sheet risks.
We may consider a negative rating action in the next 18-24 months in case of material deterioration in the Company's operating performance which will erode its loss absorbing capacity thus materially weakening its capital adequacy, or in case of a decline in premiums and deposits to a level that we find to weaken Phoenix's business position in the local market.
A Negative rating action on Phoenix Insurance could lead to a similar action on Phoenix Holdings. A weakening in the liquidity profile could also lead to a negative rating action on Phoenix Holdings.
ESG factors have an overall neutral influence on our credit analysis of Phoenix Insurance Company Ltd.
| The Phoenix Insurance Company Ltd., The Phoenix Holdings Ltd., The Phoenix Capital Raising (2009) Ltd. |
Rating | Date when the rating was first published |
Date when the rating was last updated |
|---|---|---|---|
| Issuer rating(s) The Phoenix Holdings Ltd Long term |
ilAA/Stable | 14/03/2007 | 02/11/2022 |
| The Phoenix Insurance Company Ltd. Long term |
ilAAA/Stable | 24/05/2004 | 02/11/2022 |
| Issue rating(s) The Phoenix Holdings Ltd Senior Unsecured Debt Series 4 Series 5 Series 6 |
ilAA ilAA ilAA |
03/02/2020 03/02/2020 14/12/2021 |
02/11/2022 02/11/2022 02/11/2022 |
| The Phoenix Capital Raising 2009 Ltd. Subordinate hybrid debt |
|||
| Series 9 | ilAA | 03/02/2020 | 02/11/2022 |
| Series 4 | ilAA | 03/02/2020 | 02/11/2022 |
| Series 5 | ilAA | 03/02/2020 | 02/11/2022 |
| Series 8 | ilAA | 03/02/2020 | 02/11/2022 |
| Series 10 Series 11 Series 13 Series 12 |
ilAA ilAA ilAA ilAA- |
03/02/2020 16/02/2019 23/06/2022 27/07/2021 |
02/11/2022 02/11/2022 02/11/2022 02/11/2022 |
|---|---|---|---|
| Issuer Credit Rating history The Phoenix Insurance Company Ltd. Long term July 11, 2023 April 21, 2020 October 07, 2018 February 19, 2017 November 17, 2015 May 20 ,2014 November 18, 2012 July 18, 2012 October 16, 2011 August 26, 2010 August 17, 2009 May 19 ,2009 February 08, 2009 May 24 ,2004 |
ilAAA/Stable ilAA+/Stable ilAA+/Positive ilAA+/Stable ilAA+/Negative ilAA+/Stable ilAA+/Negative ilAA+/Watch Neg ilAA+/Stable ilAA/Stable ilAA-/Negative ilAA-/Watch Neg ilAA/Watch Neg ilAA |
||
| The Phoenix Holdings Ltd Long term July 11, 2023 October 06, 2019 October 07, 2018 February 19, 2017 November 17, 2015 May 20 ,2014 November 18, 2012 July 18, 2012 January 12, 2012 August 26, 2010 May 19 ,2009 November 16, 2008 March 14 ,2007 |
ilAA/Stable ilAA-/Stable ilA+/Positive ilA+/Stable ilA+/Negative ilA+/Stable ilA+/Negative ilA+/Watch Neg ilA+/Stable ilA/Stable ilA/Negative ilAA/Watch Neg ilAA/Stable |
||
| Additional details Time of the event Time when the event was learned of Rating requested by |
11/07/2023 08:02 11/07/2023 08:02 Issuer |
S&P Maalot is the commercial name of S&P Global Ratings Maalot Ltd. For a list of the most up-todate ratings and for additional information regarding S&P Maalot's surveillance policy, see S&P Global Ratings Maalot Ltd. website at www.maalot.co.il.
All rights reserved © No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (collectively, "the Content") may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of S&P Global Ratings Maalot Ltd. or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. &P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively, "S&P Parties") do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P's ratings and other analyses are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on in making investment decisions or any other business decision, and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making such decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. Rating reports are correct as of the time of their publication. S&P updates rating reports following ongoing surveillance of events or annual surveillance.
While S&P obtains information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. S&P publishes rating-related reports for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.
S&P receives compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on S&P Maalot's website, www.maalot.co.il and on S&P Global's website, www.spglobal.com/ratings, and may be distributed through other means, including via S&P publications and third-party redistributors.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.