The Phoenix Holdings Ltd.

Investor Presentation • Aug 25, 2021

2021 Q2

Phoenix Holdings Financial Review

This presentation does not constitute an offer to purchase the Company's securities or solicitation to receive such offers, and is designed solely to offer information as part of the Company's explanations on its 2021 H1 financial reports.

This presentation includes information regarding the Company's strategic plan for the years 2020-24. Accordingly, the presentation includes forward-looking information as defined in section 32A of the Securities Law 5728-1968.

The realization and/or non-realization of forward-looking information which is stated in the financial reports will be affected by risk factors that characterize the activities of the Company and group companies, as detailed in the Company's periodic reports, including changes in economic conditions, capital market in Israel and globally, the development of competition in the segments relevant to the group's activities, regulatory changes, changes in consumer preferences and consumption habits, a change in working assumptions or in the economic models and assumptions used by the consulting firm – that can not be estimated in advance and are not controlled by the Company. Hence, there is no certainty that the actual results and achievements of the Company in the future will be in accordance with these views and may differ, also substantially, from those presented in this presentation.

Furthermore, the presentation includes data and assessments based on external sources, the contents of which were not independently tested by the Company and therefore the Company is not responsible for their accuracy.

This presentation was drafted for the sake of convenience and needs to be reviewed along side with the Company's public reports, including 2021 H1 Financial Statements, which contain the complete information about the Company, before making any decision to invest in the Company's securities.

This presentation may include information that is presented differently from the way it was presented in the company's official reports, some information may be presented and/or categorized and/or edited and/or segmented differently from the company's official past reports.

For the avoidance of doubt, the Company does not undertake to update or change the information contained in this presentation.

Agenda Highlights

Financial Results

Segment Breakdown

Investments

Appendix

Glossary

• Leading Israeli insurance, asset management & financial group
  • Proven and recognized experience 70+
    • Trusted by millions of customers

Strong capital position 186%

High growth and compelling returns

2016H1-2021H1

(1) As of August 22, 2021

(2) Based on yields in the general plans: Policies (1991-2003), Pension, and 12 in Provident Funds

(3) As of December 31, 2020 with transitional measures (standard model), after dividend distribution and transfer of shares of Phoenix pension and provident as dividend in kind during 2021

2016H1-2021H1

• Performance driven by core business and investments
• Completion of Gama IPO as planned
• Continued execution of strategic plan including focus on growth and ROE

Comprehensive Net Profit NIS millions

• » Diverse sources of profit include insurance and core fee-based businesses (including agencies, Excellence Investment House, and Gama)
• » Investment yields above 3%, including variable fees, benefited from growth and strong economic performance
• » Performance reflects impact of strategic plan execution
• » Core Fee Business Special Items includes profit from Gama IPO

Notes: Core fee businesses include agencies, Excellence, and Gama. Investments include yields and variable management fees above 3% (previously reported within Insurance). See Appendix D for a detailed breakdown of 2019-20. See Glossary for definition of Special Items.

• » Growth in shareholder equity from earnings
• » Equity growth is after dividend paid in March based on 2020 performance, in line with dividend policy, and after share buyback
• » After the end of Q2, share buyback plan of 100 NISm completed
• » 2021 share buyback plan of 100 NISm announced

(1) Including LAT restatement for 2018-19; 2020 figure is before dividend distribution

(2) Including approximately 230 NISm of Mehadrin shares as a dividend in kind

(3) Mid-term Target based on 5-year plan and assuming 3% return on investments. ROE target range assumes 3% to 4.8% return on Nostro investments (4.8% based on average actual annual return during 1.10.15-30.9.20)

(4) Including 2020 share buy-back program 26 NISm plus cash dividend 380 NISm 2020 distributed during 2021 H1

(5) 67 NISm during the reporting period and 7 NISm subsequent to balance sheet date

Progress Toward Mid-term Targets

Currently assessing targets in light of performance and business opportunities

1 AUMs include Halman-Aldubi's 43 NISb corporate fund

2 Before dividend distribution of 0.4 NISb in March for 2020

3 Includes approximately 230 NISm of Mehadrin shares as a dividend in kind

4 Post report date, the Company completed a share purchase of additional 7 NISm

Note: Mid-term Targets based on 5-year plan and assuming 3% return on investments. ROE target range assumes 3% to 4.8% return on Nostro investments (4.8% based on average actual annual return during 1.10.15-30.9.20). Actual performance will depend on financial markets, macroeconomic growth, industry trends, company performance and other variables

Comprehensive Profit ROE

Strategy Implementation: Value Drivers

1 Accelerated growth in high-ROE activities 2 Innovation and efficiency

• Asset management: Growth in AUMs to 329 NISb (including Halman corporate fund), customer acquisition in private

• P&C: Growth in premium rate - above industry trends; continuous growth in Phoenix SMART direct sales

• Agencies: growth in sales and profit contribution

• Gama: growth, reported as credit segment

• Innovation: new and follow-on investments in selected ventures; Riskified IPO in July with capital gain of \$42m, partially recognized for H1 reports; successful integration of new technologies in automation processes
  • Digitization: nearly full digitization in claims filling and production across all products; new UI for motor insurance
  • Analytics: machine-learning P&C pricing model development and implementation
  • Service: improved customer satisfaction score compared to 2020 H1
  • Efficiency: piloting post-COVID work-from-home

3 Active portfolio management 4 Capital management

brokerage accounts

• Gama: IPO process completed successfully in June, 2021
• Halman-Aldubi Investment House: integration of activities ongoing
• Excellence: implementing growth strategy
• Agencies: inorganic as well as organic growth
• ESG: work to deepen efforts across group activities
• Ad-120: (After reporting period) divestment process ongoing, no-shop granted following binding offer from strategic partner for 53% stake at equity value of 1.35 NISb

• Restructuring of long-term savings: Transfer of Phoenix pension and provident businesses from insurance subsidiary to Phoenix Holdings, improving Solvency ratio and creating flexibility for growth
• IFRS 17: Progress toward implementation in line with European groups
• Restricted Tier 1 (RT1): (After reporting period) Insurance subsidiary issued capital notes - first for sector

• Gama is a market leader in Israeli SME clearing and credit based on payments infrastructure with over 28 NISb annual transaction volume (similar to buy now pay later)
• Strong position for growth with broad customer base, excellent brand, track record of consistent growth and profitability, and experienced management team
• Significant potential due to market trends and opportunities for growth new and existing products

IPO Description

Business Highlights

• Phoenix had 49% position and announced intention to achieve control via IPO in order to drive value creation and expand credit offering
• IPO on the Tel Aviv Stock Exchange was completed successfully in June, 2021, attracting leading institutional investors and growing capital base as well as secondary sales
• Phoenix increased position to 61.6%, and recorded 220 NISm net capital gain on holdings as a result of obtaining control

Priorities Going Forward

• Accelerated growth and value creation, including governance, resources, and strategic planning
• Financials consolidated in group and reported in "Credit" segment

Restricted Tier 1 Capital Issuance

Description	• As part of strategic plan implementation (capital management), Phoenix Insurance subsidiary issued Restricted Tier 1 (RT1) subordinated bonds
	• First RT1 issuance by Israeli insurance company, rated A+ by S&P • 200 NISm of issued to institutional investors via the Tel Aviv Stock Exchange, plus
	additional 1,026 NISm to replace subordinated bonds held by Phoenix Holdings
	• Junior subordinated debt securities that qualify as tier 1 capital under Solvency II regime
Key Terms	• CPI-linked bearing interest rate of 2.29% (3.2% spread over government bond yield), payable semi-annually
	• Issued for 50 years, with an early redemption option for issuer after 10 years, and then every five years
	• Principal temporary write-down mechanism, subject to reaching 100% or 75% SCR triggers; write-up following write-down subject to Company's discretion and its capital position
	• Phoenix Insurance: Increase of Solvency II capital ratio without issuing ordinary shares
Benefits	by maximizing allowed AT1 bucket
	• Phoenix Holdings: Improvement of ROE and liquidity; reduction of weighted financing costs for the group; facilitation of dividend distribution

Priorities for next quarters

• Implementing strategic plan to drive risk-adjusted returns
  • Accelerated growth
  • Innovation & efficiency
  • Active portfolio management including Ad-120 divestment
  • Optimized capital deployment
• Assessing medium-term targets in light of performance and business opportunities
• Implementing ESG workplan and initiatives across the group, working closely with Board of Directors ESG Committee
• Proactively managing COVID-19 impact including variants

Agenda Highlights

Financial Results

Segment Breakdown

Investments

Appendix

Glossary

Premiums, Benefit Contributions, & Investment Contracts NISb

Growth driven by LTS and investment contracts

• LTS: strong growth in H1/21 compared to H1/20
• P&C: 5% growth in H1/21 compared previous year
• Health: premium decrease due to COVID-19 impact on travel insurance

• Excellence – growth driven by growth in mutual funds and ETFs
• Insurance, investment contracts, and pensions – organic growth across products driven by monthly contributions and internal yields
• Provident – organic as well as inorganic growth including Halman Aldubi provident and corporate funds during 2021 H1

NISm Continued performance across activities

• P&C and LTS businesses continued to drive performance, with strong operating and investment results
• Growth in agencies' operations and results
• New credit segment reporting includes Gama and profit from Gama IPO

Comprehensive Net Profit

Q2/2020	290	176	196	40	44	5	379	(374)	(8)	748
Difference	(58)	(180)	205	(9)	15	229	(228)	79	(4)	49

Significant quarterly

• Investment income

• 261 NISm profit from

• Special items include 223 NISm profit from

PBT during H1

operations

Gama IPO

contributed 553 NISm

returns

Q2/2020(**) 191 40 44 5 6 702 9 133 1,130 Difference (6) (2) 15 6 (38) (149) (46) 194 (26)

(*) Investment income and variable management fees above 3% annual return and after offsetting the guaranteed yield to policyholders (123 NISm) and interest expenses (**) For full 2020 breakdown please see Appendix C.

Comprehensive Net Profit NISm

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Comprehensive Income Before Tax NISm

• Investment income contributed 938 NISm PBT during H1
• 494 NISm profit from operations
• Special items include 220 NISm from Gama IPO

(*) Investment income and variable management fees above 3% annual return (previously reported within insurance underwriting) and after offsetting the guaranteed yield to policyholders and interest expenses (**) For full breakdown please see Appendix B. See segment breakdowns for further details per segment.

		2020	2020H1	2021H1
P&C	Expenses / Gross Earned Premiums	5.08%	4.66%	4.57%
Health	Expenses / Gross Earned Premiums	5.82%	5.80%	5.51%
Life	Expenses / AUM	0.49%	0.53%	0.49%
Pension & Provident	Expenses / AUM	0.23%	0.26%	0.22%

1

Agenda Highlights

Financial Results

Segment Breakdown

Investments

Appendix

Glossary

Comprehensive Income Before Tax (NISm)

Improvement in H1 due to underwriting as well as investments

• Total profit increase in H1 to 410 NISm
• Driven by increase of 320 NISm in investment income as well as higher underwriting profits
• Higher underwriting profit in H1/21 compared H1/20, despite lower profitability in Q2/21 due to low motor claims during COVID-19 in Q2/20
• Continued growth in premiums and in Phoenix Smart direct channel

1-6/2021	180	230	-	-	410
1-6/2020	168	(90)	(10)	(1)	67
Q2/2021	108	124	-	-	232
Q2/2020	135	177	(21)	(1)	290

Comprehensive Income Before Tax (NISm)

Decrease in comprehensive profit due to actuarial research

• Special Items during H1 include actuarial research on health and long-term care backbook, compared to positive impact from LAT reserve changes (initial application of regulatory amendments to the LAT circular) and one time CSM profit last year
• 22 NISm decline in normalized profit due to COVID-19 impact on claim frequency and travel insurance

(*) The underwriting earnings assume a real rate of return of 3%, investment income includes income from own (Nostro) investments above or below a 3% real return

LTS Combined – Life & Long-Term Savings AM

Performance improvement driven by investments

• Significant increase in H1/21 to 691 NISm
• Improvement driven by 662 NISm profit in life segment, due in part to investment performance
• Transfer of shares of pension and provident business as dividend in kind from Phoenix Insurance to Phoenix Holdings, improving future Solvency generation and group liquidity
• Ongoing post-closing integration of Halman-Aldubi funds expecting to be completed by Q4, driving synergies

Comprehensive Income Before Tax (NISm)

Comprehensive Income Before Tax (NISm)

(67) 662 308 (23) (67) 1-6/20 Special 1-6/21 items Interest Effect Underwriting profit 636 Investment and Variable Mgmt. Fees above 3% (192) 662 729+ 1-6/2021 42 508 (16) 128 662 1-6/2020 65 (128) 176 (180) (67) Q2/2021 22 234 (11) 141 386 Q2/2020 (7) 61 12 127 193 Difference 29 173 (23) 14 193

Performance improvement driven by investments

• Significant profit increase to 662 NISm in H1
• Strong results in Nostro and management fees compared to 2020, even after negative interest rate effects
• Special items include actuarial research in H1/21, compared to growth in reserves last year (due to influence of K reserves because of variable management fee deficit)

LTS Breakdown: Pension and Provident Funds P&C Health LTS AM Agencies Credit CO

Comprehensive Income Before Tax (NISm)

Growth in profit during H1

• Reaching profitability with initial scale before full synergies with Halman
• Profit from management fees increase by 22 NISm
• Initial Halman-Aldubi synergies and AUM growth

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Operating Profit (NIS m)

Lower profitability compared to volatile period in 2020

• Increased AUMs drove higher revenues from mutual funds and ETFs
• Growth in clients and market share in private brokerage (incurring higher acquisition costs, classified as Special Items)
• However, market making activity lower compared to highly volatile H1/20, reducing profits by 19 NISm compared to last year
• In addition, 12 NISm lower profitability due to foreign exchange deposit margins compared to H1/20

1-6/2021	69	(8)	61
1-6/2020	95	-	95
Q2/2021	38	(7)	31
Q2/2020	40	-	40
Difference	(2)	(7)	(9)

Profit Before Tax (NIS m)

1-6/2021	270	12	(174)	3	111
1-6/2020	193	(4)	(117)	6	78
Q2/2021	140	8	(90)	1	59
Q2/2020	92	2	(52)	2	44
Difference	48	6	(38)	(1)	15

Growth in proprietary distribution channels

• Growth in profit before tax to 111 NISm during H1
• Driven by continued organic and inorganic growth

236

Comprehensive Income Before Tax (NISm)

1-6/2021	16	220	236
1-6/2020	10	-	10
Q2/2021	12	223	235
Q2/2020	5	-	5
Difference	7	223	230

Successful IPO of Gama

• Gama IPO on the Tel Aviv Stock Exchange completed in June, 2021, recording net capital gain of 220 NISm
• Phoenix holds 61.6%
• Continued growth in core activities during first half of year

Operating Profit (NISm)

Increases profits driven by investments

• Total profit increase in H1/20 to 124 NISm
• Due primarily to investment income and capital markets
• Increase in financial expenses as a result of CPI increase

(*) Phoeniclass and other subsidiaries held by Phoenix Investments

(**) Investment fees above 3%.

Agenda Highlights

Financial Results

Segment Breakdown

Investments

Appendix

Glossary

Phoenix Investment Yields – Highlights

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H1/21 financial market recovery and low global interest rates generated improved returns

• Nostro acceleration in income from investments
• OPM profitability increase in policies, pension funds and provident funds

1 Refers to yields in the general plan

2 The Company reported in Halman-Aldubi a one-time profit of \$2.2 M, some of which was recognized during the reporting period as a result of Riskified company holding

Agenda Highlights

Financial Results

Segment Breakdown

Investments

Appendix

Glossary

Appendix A - H1/2021 Balance Sheet Highlights

Appendix B – Profit 2020H1 vs 2021H2

(*) The company classified in relation to previous periods its variable management fees under 3% annual return to operation profit, Investment income and variable Mang. fees above 3% annual return and after offsetting the guaranteed yield to policyholders and interest expenses to capital market investments and actuarial research to special items.

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1,104 327 Appendix C – Profit Breakdown 2020Q2 vs 2021Q2

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(*) The company classified in relation to previous periods its variable management fees under 3% annual return to operation profit, Investment income and variable Mang. fees above 3% annual return and after offsetting the guaranteed yield to policyholders and interest expenses to capital market investments and actuarial research to special items.

Appendix D – Profit Breakdown 2020 vs 2019

(*) The company classified in relation to previous periods its variable management fees under 3% annual return to operation profit, investment income and variable management fees above 3% annual return and after offsetting the guaranteed yield to policyholders and interest expenses to capital market investments and actuarial research to special items

Agenda Highlights

Financial Results

Segment Breakdown

Investments

Appendix

Glossary

AM	Asset Management; i.e. Excellence Nessuah
AUM	Assets Under Management; the total market value of all the investments that are managed by the Group
Bps	Basis Points; 1 basis points is .01%
CGU	Cost Generating Unit
CI	Comprehensive Income
CLR	Combined Loss Ratio
CO	Corporate, Other and Consolidation
CPI	Consumer Price Index; measures the average change of prices in an agreed upon basket of consumer goods and services over time
CSM	Contractual Service Margin
D&O	Directors and Officers Liability Insurance
DAC	Deferred Acquisition Cost
ESOP	Employee Stock Ownership Plan; workplace benefit program, that provides the employees with ownership interest in the company.
ETF	Exchange Traded Fund; an open end, tradable basket of securities that tracks an underling index, sector, or security type
Fixed-Rate Gov Bonds	A government issued bond for which the interest income payment is agreed upon and does not change
FX	Foreign Exchange Currency
Gama	Financial services and credit company owned by the Phoenix Group
Halman corporate funds	Israeli Electric Company (IEC)
Illiquidity Premium	Or Liquidity Premium; premium demanded by investors when any given security cannot be easily converted into cash for its fair market value.
IMF	International Monetary Fund
Index Linked Gov Bonds	A government issued bond for which the interest income payment is related (or linked) to the CPI
LAT	Liability Adequacy Test
Liquidity Premium	See Illiquidity Premium
LOB	Line of Business
LTC	Long Term Care insurance; typically helps pay for costs associated with long term care
LTS	Long Term Services; including but not limited to Life, Provident and Pension funds
Marketable Securities	Liquid financial assets that can be quickly converted into cash; most are trading assets

MF	Management Fees; wages charged by a financial manager
Moody's	A credit risk rating agency
MSCI	Morgan Stanley Capital International Emerging Markets Index; measures the performance in equity markets, specifically in global emerging markets
Mutual Fund	Open end, non-tradable basket of securities that tracks the performance of an undelaying index, sector, or security type
Net Inflows	The net amount of new cash, excluding the impact of investment market value; calculated by subtracting withdrawals from new deposits
NIS	New Israeli Shekel
Non-Marketable Securities	Asset group that is considered to be difficult to buy or sell due to the fact they are not traded on any major exchange; could include government issued debt securities, limited partnerships, real estate investments and more
Nostro	The account in which a financial institution manages its own funds
OPEX	Operational Expenses
P&C	Property and Casualty insurance
PH	Phoenix holdings
PHI	Permanent Health Insurance
PI	Phoenix insurance
PLI	Professional Liability insurance
Reinsurance	A balancing risk strategy; one or more insurers that share the liability
Revenue	All encompassing streams of income; including, but not limited to: premium, management fees, benefit contributions
RFR	Risk Free Rates
ROE	Return On Equity; calculated by dividing net income over total equity
SME60	"The Rest Index"; tracks the performance of the 60 largest market value companies that are excluded from the Tel Aviv Stock Exchange
Special Items	Changes in profit or loss that are not part of the usual business of the Company, including changes in actuarial research, actuarial model changes, other structural changes and strategic acquisition costs in AM segment
Tel Bond 20	Index that tracks the performance of the 20 largest Index Linked Corporate Bonds in terms of market value
Tel Bond 40	Index that tracks the performance of the 40 largest Index Linked Corporate Bonds in terms of market value
Tel Bond 60	Index that tracks the performance of the 60 largest Index linked Corporate Bonds in terms of market value
TLV 125	An index that tracks the performance of the 125 largest market value companies in the Tel-Aviv Stock Exchange
TLV 35	An index that tracks the performance of the 35 largest market value companies in the TLV Stock Exchange
TLV 90	An index that tracks the performance of the 90 largest market value companies in the TLV stock Exchange
TMTP	Transitional Measures on Technical Provisions
Workers' Compensation Insurance	Insurance coverage for employees' injuries or sickness
Yield Curve	A line that plots interest rates of bonds with equal credit risk with different maturity dates in the future

2021 Q2

Phoenix Holdings Financial Review

Please contact us at IR@fnx.co.il