Consolidated Interim Financial Statements as of March 31 2021 (Unaudited) The Phoenix Holdings Ltd.

Report of the Board of Directors on the State of the
Corporation's Affairs
Consolidated Interim Financial Statements
Standalone Financial Data from the Consolidated Interim
Financial Statements Attributed to the Company
Report on the Effectiveness of Internal Control over Financial
Reporting and Disclosure
Statements Regarding Controls and Procedures in respect of
Disclosure in the Financial Statements of The Phoenix
Insurance Company Ltd.

Members of the Board

Benjamin Gabbay - Chairman
Roger Abravanel
Ben Langworthy
Marilyn Victoria Hirsch
Zhak Cohen
Rachel Levine (External Director)
Zohar Tal (External Director)
Dr. Ehud Shapira (Independent Director)
Eliezer Yones

Report of the Board of Directors on the State of the Corporation's Affairs as of March 31 2021

1. The Group's Structure, its Areas of Activity, and Developments Therein 3
2. Description of the Business Environment…………………………………………………………………………………………10
3. Developments in the Macroeconomic Environment………………………………………………………………………18
4. The Board of Directors' Explanations for the State of the Corporation's Business 22
5. Disclosure on Exposure to, and Management of, Market Risks………………………………………………….39
6. Linkage balance……………………………………………………………………………………………………………………………………….41
7. Corporate Governance Aspects……………………………………………………………………………………………………………44
8. Disclosure Provisions Relating to the Corporation's Financial Reporting46

Report of the Board of Directors on the State of the Corporation's Affairs March 31 2021

The Report of the Board of Directors of The Phoenix Holdings Ltd. (hereinafter, "The Phoenix Holdings" or the "Company" or the Corporation") as of March 31 2021, outlines the principal changes in the Company's operations in the period from January through March 2021 (hereinafter - the "Reporting Period").

The report was prepared in accordance with the Securities Regulations (Periodic and Immediate Reports), 1970. With regard to the insurance, pension, and provident fund operations of the Group, the Report was prepared pursuant to the Supervision of Insurance Business Regulations (Reporting), 1998, and in accordance with the directives issued by the Commissioner of the Capital Market, Insurance and Savings Authority (the "Supervisor" or the "Commissioner"). The report was prepared assuming that the reader also has at his/her disposal the Company's full 2020 periodic report (hereinafter - the "Periodic Report").

The Report of the Board of Directors is an integral part of the quarterly report, and the quarterly report should be read in its entirety, as a single unit (hereinafter - the "Financial Report" or the "Financial Statements").

1. The Group's Structure, its Areas of Activity, and Developments Therein

1.1. Group structure

The Company's shareholders

The controlling shareholder of the Company is Belenus Lux S.à.r.l. (hereinafter - "Belenus"), which is held by Centerbridge Partners LP and Gallatin Point Capital LLC (hereinafter - the "Funds"). For further details regarding the holding stakes and structure, please see Section 1.1 under "Description of the Corporation's Business" in the Periodic Report.

Areas of activity 1.2.

1.2.1. For a description of the Group's areas of activity and its holding structure, please see Section 1.2 in the chapter entitled Description of the Corporation's Business in the Periodic Report.
1.2.2. The Company has various sources of income from the activities of its subsidiaries, as outlined in the sections dealing with the various operating segments. Following is the pre-tax comprehensive income attributed to the shareholders in the reporting period (for further details, please see Note 3 to the Financial Report):

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Citizens Ltd. (hereinafter - "Ad 120") as part of the execution of the Company's multi-year strategic plan, whereby the Group will focus, among other things, on its core business and unlock the value of the Group's asset portfolio. As of the report date, the Company is acting to implement the aforesaid with the assistance of an investment bank with which the Company has entered into an agreement in this matter. As of the report publication date, The Phoenix Insurance had received several unbinding initial offers from potential acquirers. The Phoenix Insurance is considering the various offers and alternatives for executing the transaction. For further details, please see the Bank's immediate report dated January 28 2021 (Ref. No.: 2021-01-011200).

1.3.5. Gama IPO

In May 2021, Gama Management and Clearing Ltd. (hereinafter - "Gama") published a draft prospectus for an initial public offering and sale offer (hereinafter: the "Draft Prospectus"). As of the report publication date, the Company indirectly holds - through The Phoenix Investments and Finances Ltd., a wholly-owned subsidiary of the Company (hereinafter - "The Phoenix Investments") - 49% of Gama's issued and paid-up share capital. According to the draft prospectus, the company intends, concurrently with the execution of the IPO, in accordance with the IPO prospectus, to acquire, through The Phoenix Investments, such that following the IPO and full hold more than 60% of Gama's issued and paid up share capital and voting rights, fully diluted, and shall be the controlling shareholder in Gama. To the extent that the issuance will indeed proceed and the Company will gain a holding stake of more than 50% over Gama, the Company is expected to record a one-off capital gain due to gaining control, ranging between NIS 230 million and NIS 280 million, depending on the IPO proceeds. As of the report publication date, the IPO is scheduled to take place in June 2021. However, it shall be clarified that the information stated in this section is forward-looking information and that there is no certainty that the IPO will indeed take place and what its terms and conditions will be.

1.3.6. Offer to purchase all shares of Psagot Mutual Funds Ltd.

On May 9 2021, KSM Sal Certificates Holdings Ltd. - a company indirectly controlled by the Company, jointly with YD More Investments Ltd. - filed a binding offer to acquire all shares of Psagot Mutual Funds Ltd., Psagot Securities Ltd. and Psagot Compass Investments Ltd. (hereinafter, collectively the "Acquired Companies") by Psagot Investment House Ltd. (hereinafter - "Psagot"). The offer reflected an enterprise value of approximately NIS 420 million for the Acquired Companies, on the basis of zero debt and zero cash as of December 31 2020. The offer expired on May 10 2021 at 5:00 PM under the terms and conditions of the offer. For further details, please see the Company's reports dated May 9 2021 and May 11 2021 (Ref. Nos.: 2021-01-080166 and 2021-01-082401, respectively).

1.3.7. Transfer of the shares of management company Phoenix Excellence from The Phoenix Insurance to the Company

In January 2021, the Board of The Phoenix Insurance ratified its decision+to transfer shares of Phoenix Excellence by way of dividend in kind. The distribution has not yet been executed since, as of the report publication date, the approval of the Israel Tax Authority has yet to be given. It should be noted that the approval of the Capital Market, Insurance and Savings Authority has already been obtained. For further details - including the Board of Directors' original explanations for approving the distribution - please see the Company's immediate report dated December 31 2019 (Ref. No.: 2019-01-126166). It should be noted that as part of the distribution of the dividend in kind and prior to its execution, in August 2020, the Company's Board of Directors approved the Company's commitment to supplement The Phoenix Excellence's shareholders equity to the amount stipulated in the Supervision of Financial Services Regulations (Provident Funds) (Minimum Equity Required from a Management Company of a Provident Fund or a Pension Fund), 2012, in lieu of The Phoenix Insurance's commitment.

1.3.8. Acquisition of the Halman-Aldubi Investment House

The Halman-Aldubi transaction

As part of the implementation of its business strategy and its wish to expand its asset management activities in general and its pension and provident funds activities in particular, on February 28 2021, the Company completed the merger transaction - under which the Company acquired Halman-Aldubi Investment House Ltd. (hereinafter - "Halman-Aldubi"), by way of a reverse triple merger transaction - was completed. Upon completion of the transaction, Halman Aldubi became a privately-held company wholly-owned by the Company. The proceeds of the Halman Aldubi transaction totaled NIS 275 million.

Loan to Halman Aldubi Provident and Pension Funds

On February 18 2021, the Company entered into an agreement with Halman Aldubi Provident and Pension Funds Ltd., a company wholly owned by Halman-Aldubi (hereinafter - "Halman Provident"), according to which the Company would extend Halman Provident a loan to finance the full early redemption of all bonds (Series A) issued by Halman Provident, in the amount of NIS 73.6 million (hereinafter, respectively: the "Bonds" and the "Early Redemption"); according to the agreement, the Company undertook to finance the full early repayment of a loan totaling NIS 15 million (hereinafter - the "Bank Loan Amount"), taken by Halman Provident from a local banking corporation. On March 8 2021, early redemption of the bonds was made and the bank loan to the local banking corporation was repaid.

¹ The decision on the transfer of the Phoenix Excellence was initially made in December 2019. Due to the passage of time, and since the Israel Tax Authority's regulatory approval has yet to be granted, the Board of Directors of the Company discussed the issue again and approved the distribution.

Merger of Halman Provident into The Phoenix Excellence

On May 23 2021, the Phoenix Excellence's Board of Directors decided to merge Halman Provident with and into Phoenix Provident. According to the merger outline, the provident funds and the old pension funds managed by Halman Provident will be transferred to the management of Phoenix Provident. The merger between the companies - including the merger of the provident funds and the provident funds' investment tracks - is expected to be completed on September 30 2021, subject to obtaining the approvals required by law.

Default pension sale - Meitav-Dash deal

On February 22 2021, the Company entered into an agreement with Meitav Dash Provident Funds and Pension Ltd. (hereinafter - "Meitav Dash Provident"), according to which the Company will exercise its influence as Halman Aldubi's sole shareholder, such that Halman Provident will sign an agreement for the sale to Meitav Dash Provident of the new pension funds managed by Halman Provident for NIS 45 million, to be paid in one lump sum on completion date. On March 10 2021, Halman Provident signed the said agreement. The completion of the sale is subject to meeting accepted conditions precedent, and the last date for the completion of the Funds' sale agreement is scheduled for June 30 2021.2

For further details, please see the immediate reports from the following dates: December 8 2020, January 28 2021, February 3 2021, February 18 2021, February 23 2021, February 24 2021, and February 28 2021 Ref. Nos.: 2020-01-133119, 2021-01-011467, 2021-01-013942, 2021-01-020860, 2021-01-022078, 2021-01-021813 and 2021-01-023697, respectively.

1.3.9. Policy of voluntary reporting in English

In February 2021, the Company's Board of Directors approved the adoption of a voluntary reporting policy in English on the English-language MAYA website of the Tel Aviv Stock Exchange, beginning on the date of publication of the Company's annual Financial Statements for 2020. The adoption of the said policy is based, inter alia, on a notice published by the Israel Securities Authority on June 30 2020 - "Notice to Companies: Voluntary Publication of Translations of Reports into English." For further details, please see the Company's immediate report dated February 25 2021 (Ref. No. 2021-01-023287). The Company follows the said policy and on April 22 2021, published its 2020 Periodic Report in English for the first time.

1.3.10.Ratings

a. On January 11 2021, Midroog announced it was reiterating the rating of Series 3 and 4 bonds at Aa3.il, with a stable outlook. On January 31 2021, Midroog announced it has rated the extension of up to NIS 350 million in Series 4 and 5 bonds issued by the Company at Aa3.il,

² The last date for the completion of the Funds' sale agreement was originally scheduled for May 31 2021; the agreement was extended by the parties until June 30 2021.

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1.3.14.The Company's preparation for the application of IFRS 17

As part of The Phoenix's preparations for the application of IFRS 17 (hereinafter - the "Standard") in the Financial Statements of the Company and The Phoenix Insurance as of the quarterly and annual periods beginning on January 1 2023, in February 2021, The Phoenix Insurance signed agreements with software and integration service providers for the purpose of applying the Standard. The purpose of the agreements is to implement and assimilate a system aimed at enabling the Company to meet the regulatory requirements for the Standard, including the requirements detailed in "Roadmap for the Adoption of International Reporting Standard (IFRS) 17, Insurance Contracts", published on June 7 2020 by the Capital Market, Insurance and Savings Authority.

In addition, The Phoenix Insurance entered into an agreement with EY Canada, in partnership with EY Israel, which includes expanding their auditing and consulting services. The contract was preapproved by The Phoenix Insurance's Audit Committee, which determined - after being presented with satisfactory references - that the said consultancy project meets the independence rules according to the Commissioner's position titled "Impairment of the Independence of an Independent Auditor due to the Provision of an Ancillary Service" published in January 2021. For further details, please see Note 2(ee)(1) to the Financial Statements as of December 31 2020.

1.3.15.New chairman for OPM Investment Committee

In April 2021, the Commissioner approved the appointment of Mr. Eldad Fresher as Chairman of the OPM Investment Committee for Insurance, Provident and Pension Planholders and Policyholders, following the approval by The Phoenix Insurance's Board of Directors. Mr. Fresher will begin his term in early June 2021. Mr. Fresher will replace Mr. Jacob Rosen, who served as the Committee's chairman for the past nine years. The Phoenix's management thanks Mr. Rosen for his substantial contribution to The Phoenix's performance and the unprecedented investments and achievements made over the past few years.

1.4. The coronavirus and its impact

For details regarding the extent of the coronavirus crisis's impact on the Company's various business activities, please see Note 1 to the Financial Statements as of December 31 2020.

The security situation 1.5.

During May 2021, following a military escalation in Israel, rockets were fired into the country over a period of 11 days. During this period, the Company continued to provide full service to its customers. To the best of the Company's knowledge, as of the report publication date, the event does not have a material effect on the Company's performance. In addition, we note that the State of Israel covers property damage, if any.

2. Description of the Business Environment

2.1. Implementation of the Economic Solvency Regime provisions applicable to The Phoenix Insurance Company Ltd.

2.1.1. Provisions regarding the implementation of the Economic Solvency Regime

The Phoenix Insurance is subject to the Solvency II-based Economic Solvency Regime in accordance with the provisions of Circular 2020-1-15 of the Commissioner of the Capital Market, Insurance and Savings (hereinafter - the "Commissioner") - "Amendment to the Consolidated Circular concerning Implementation of a Solvency II-Based Economic Solvency Regime for Insurance Companies" (hereinafter - the "Economic Solvency Regime"), which was published on October 14 2020. The Economic Solvency Regime is a regulatory directive that regulates capital requirements and risk-management processes among insurance companies. The Economic Solvency Regime sets a standard model for calculating eligible capital and the regulatory solvency capital requirement, with the aim of bringing insurance companies to hold buffers to absorb losses arising from the materialization of unexpected risks to which they are exposed. The solvency ratio is the ratio between an insurance company's economic shareholders' equity recognized for solvency purposes and the required capital.

2.1.2. Increasing economic capital according to the transitional provisions:

The Company opted for the alternative provided by the Economic Solvency Regime regarding the transitional provisions, whereby the economic capital may be increased by gradually deducting from the insurance reserves until 2032 (hereinafter - the "Deduction During the Transitional Period"). With regard to the Deduction During the Transitional Period, a letter was addressed to insurance companies managers titled "Principles for calculating Deduction During the Transitional Period in the Solvency II-based Economic Solvency Regime" (hereinafter - the "Letter of Principles"). Pursuant to the Letter of Principles, the Deduction During the Transitional Period shall be calculated by dividing insurance policies issued through December 31 2016 into homogeneous risk groups. The aforesaid deduction shall be calculated as the difference between insurance reserves (retention) as per the economic balance sheet, including the risk margin attributed thereto (net of the difference between the fair value and the carrying amount of designated bonds) and the insurance reserves (retention) as per the Financial Statements. This difference shall be deducted on a linear basis until December 31 2032. The deduction balance at each reporting date (hereinafter - the "Deduction Value During the Transitional Period") shall be proportionate to the expected increase in the solvency ratio calculated excluding expedients during the Transitional Period.

2.1.3. Publication of Economic Solvency Ratio Report

The Economic Solvency Ratio Report as of December 31 2020 was published at the same time as the Financial Statements, on May 27 2021, and was prepared and presented in accordance with the provisions of Chapter 1, Part 4, Section 5 of the Consolidated Circular, according to Circular 2020-1-17 (hereinafter - the "Disclosure Provisions"). In accordance with the Consolidated Circular, the economic solvency ratio report in respect of the December 31 and June 30 data of each year shall be included in the first periodic report published after the calculation date. Despite the above, on March 19 2020, the Commissioner published a letter, Ref. No. SH 2020-2031, stipulating that an insurance company is exempt from publishing an economic solvency ratio report as of June 30 2020 and from filing solvency reporting files in for that date.

On March 14 2021, a letter from the Commissioner was published, Ref. No. 2021-423, stating that the deadline for publication of the economic solvency ratio report as of December 31 2020, as well as the accompanying files reported to the Commissioner, shall be filed no later than June 30 2021. In addition, the letter states that an insurance company may refrain from publishing an economic solvency ratio report as of June 30 2021.

2.1.4. Economic solvency ratio and minimum capital requirement (MCR):

The meaning of the terms in this section is the same as in Appendix B to Chapter 2 in Part 2 of Section 5 of the Consolidated Circular - "Economic Solvency Regime".

As of December 31

2020 2019**

Audited*
In NIS thousand

6,661,640 7,455,885

6.109,203 4,630,620

192% 162%

a. Economic solvency ratio:

period between the calculation date and the

punikation hate of the Solvensy Tatto Tenvi T

Raising of equity instruments 220,000

Shareholders equity for SCR 12,770,842 12,306,505

Surplus 6,109,203 4,850,620

Economic solvency ratio (in %) 192% 165%

7.1.1 11 4

(*) "Audited" refers to an audit held in accordance International Standard on Assurance Engagement (ISAE) 3400 – "The Examination of Prospective Financial Information."

**The solvency ratio calculation as of December 31 2019 does not include the effect of retrospective application following a policy change regarding LAT in life and health insurance.

(1) The above audited solvency ratio includes a NIS 200 million dividend distribution performed between the calculation date and report publication date. See Section E below.

Main changes in capital surplus and in the economic solvency ratio compared to last year

· Positive returns on risk-free interest in planholders' portfolios (which have a positive effect on Company's management fees income from these portfolios) and in the nostro portfolio caused an increase in the Company's Tier 1 Capital, and on the other hand increased the capital requirement. On a cumulative basis, these returns have had a significant positive effect on the Company's economic solvency ratio.

· During 2020, the Company conducted studies and revised criteria in its actuarial model and the expenditure model, which had a positive effect on the solvency ratio.

· A substantial positive effect on the solvency ratio was recorded as a result of an increase in accordance with the loss absorption adjustment due to a deferred tax asset, in accordance with the Company's estimate regarding utilizable tax credits. This effect reduced the capital requirement and, accordingly, increased the capital surplus.

· A decline in the risk-free interest rate curve (in the mid-to-long term) has had a negative effect on the Company's capital surplus and solvency ratio.

· In December 2020, the Company and a reinsurer rated AA entered into an agreement aimed at providing the Company with partial protection against a mass lapse scenario in its life and health insurance business. The effect of the transaction on the capital surplus is an increase of approximately NIS 290 million, which increases the solvency ratio by approximately 7% (taking into account the transitional provisions and the adjustment of the stock scenario). For further details regarding the transaction, please see the Company's immediate report dated December 27 2020.

· In March 2021, the Company's Board of Directors approved a dividend distribution in the amount of NIS 200 million, which reduces the capital surpus at this amount. According to the guidelines, the dividend amount will be deducted from the economic capital balance as of December 31 2020.

The deduction amount

In March 2020, the Commissioner published an amendment to the provisions of the Consolidated Circular regarding the Liability Adequacy Testing (hereinafter - the "LAT Circular"). The amendment included changes in the way insurance liabilities are calculated as part of the Liability Adequacy Test (LAT), and determined that these changes would apply from the financial statements as of March 31 2020 as a change in accounting policies by way of retrospective application. In accordance with the Commissioner's Directives, the said amendment is not reflected in the calculation of the Deduction During the Transitional Period as of December 31 2019.

In March 2021, the Commissioner published a clarification in connection with this issue, stipulating that the calculation of the LAT Circular's effect on the Deduction During the Transitional Period as of December 31 2020 shall be carried out retrospectively, as follows: The Deduction During the Transitional Period will be calculated as of December 31 2019 using the same method as the one used to calculate the Economic Solvency Ratio Report for that date; the accounting-based insurance liabilities include the effect of the LAT Circular, and the economic-based insurance liabilities (best estimate plus risk margin) and added fair value of the designated bonds include the effect derived therefrom. The Deduction During the Transitional Period as of December 31 2020 shall be based on the Deduction During the Transitional Period that was calculated retrospectively and will be deducted as described above. The effect of the LAT circular's application, as explained above, is to increase the amount of the Deduction During the Transitional Period by approximately NIS 382 million as of as of December 31 2019. Were it not for the capital surplus circular as of December 31 2020, it would have been NIS 5,816 million and the solvency ratio - 186%, after the Deduction as stated in the Letter of Principles. For details regarding the economic solvency ratio without applying the transitional provisions for the Transitional Period, and without adjusting the stock scenario, and for details regarding the solvency ratio target and restrictions imposed on the Company with respect to dividend distribution, please see Section C below.

As of December 31

2020 2019**

Audited*

In NIS thousand

Minimum capital requirement (MCR) 1,665,410 1,863,971

Shareholders equity for MCR 9,773,104 8,919,336

b. Minimum capital requirement (MCR)

(*) "Audited" refers to an audit held in accordance International Standard on Assurance Engagement (ISAE) 3400 - "The Examination of Prospective Financial Information."

**The calculation does not include the effect of retrospective application following a policy change regarding LAT in life and health insurance.

Below is a link to the Economic Solvency Ratio Report on the company's website. https://investor-relations.fnx.co.il/about-us/solvency-report/

c. Limitations on dividend distribution and solvency ratio without the implementation of the deployment provisions

The Company's policy is to have a solid capital base to ensure its solvency and ability to meet its liabilities to policyholders, to preserve the Company's ability to continue its business

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d. Solvency ratio without applying the transitional provisions for the Transitional Period, and without adjusting the stock scenario:

As of December 31

2020** 2019**

Audited*

In NIS thousand

Shareholders' equity for SCR (NIS thousand)
Solvency capital requirement (SCR) (in NIS thousand) 9,931,007 9,161,522

(1) 8,557,405 8,896,554

Economic solvency ratio (in %) 116% 103%

Effect of material capital-related measures
taken in the period between the calculation
date and the publication date of the solvency
ratio report:
Raising of equity instruments
Shareholders equity for SCR 9,931,007 220,000
9,381,522

Surplus 1,373,602 484,967

Economic solvency ratio (in %) 116% 105%

Capital surplus after capital-related actions in
relation to the Board of Directors' target:
Minimum solvency target, net of the transitional
provisions 105% 105%

Capital surplus over target*** 945,731 40,140

(*) "Audited" refers to an audit held in accordance International Standard on Assurance Engagement (ISAE) 3400 - "The Examination of Prospective Financial Information."

** The capital surplus includes 35% of the original difference attributed to the purchase of the activity of provident funds and management companies amounting to approximately NIS 15 million as of December 31 2020 and 2019. The difference is not recognized for dividend distribution purposes.

***The solvency ratio calculation as of December 31 2019 does not include the effect of retrospective application following a proactive policy change regarding LAT in life and health insurance.

(1) The above audited solvency ratio includes a NIS 200 million dividend distribution performed between the calculation date and report publication date. See Section E below.

e. Dividend distribution based on the economic solvency ratio as of December 31 2020

During the first quarter of 2021, The Phoenix Insurance distributed a dividend in the amount of NIS 200 million, in accordance with the audited results as of December 31 2019, and in accordance with the results of an estimate to calculate the Solvency II-based economic solvency ratio as of December 31 2020 (hereinafter, the "Estimate"). For further details regarding the Estimate, please see the Company's immediate report dated March 25 2021.

According to the audited results as of December 31 2020, following the dividend distribution, as stated above, the economic solvency ratio of The Phoenix Insurance is 192%, and the economic solvency ratio net of the transitional provisions for the Transitional Period and without adjusting the stock scenario is 116%.

The results exceed the capital target set by the Board of Directors, which is 105% and meet the 150%-170% target range, in which the Company seeks to be during and after the Transitional Period, given the Deduction during the Transitional Period and its gradual reduction; thus, the Company exceeds the requirements of the letter published by the Commissioner in October 2017 reqarding restrictions on dividend distribution, as stated above.

In addition, on March 24 2021, the Board of Directors of The Phoenix Insurance approved taking under consideration the issuance of an Additional Tier 1 capital instrument in the amount of approximately NIS 400 million; the issuance shall have a positive effect on The Phoenix Insurance's solvency ratio. For further details, please see Section 1.3.13 below.

2.1.5. Changes in the linked shekel risk-free yield curve affect the Company's economic solvency ratio, especially in the mid- to long-terms, affect the Company's economic solvency ratio.

The following table summarizes the positive (negative) risk-free linked interest ("spot") rates:4

Range/years Dec. 31 2020 Mar. 31 2021 Mav 23 2021

Short
1-3
term Between 0.13% and
(0.85)% Between (1.28)% and
(1.50)% Between (1.37)% and
(1.73)%

4-10 Between (0.94)% and Between (1.34)% and Between (1.57)% and

Mid-term (0.58)% (0.50)% (0.65)%

Mid-long 11-15 Between (0.49)% and Between (0.39)% and Between (0.51)% and

term (0.23)% (0.12)% (0.06)%

Long 16-25 Between (0.18)% and Between (0.08)% and Between 0.03% and

term 0.23% 0.31% 0.52%

The Company performed a sensitivity analysis for a corresponding decrease of 50 basis points along the risk-free linked shekel interest rate curve. The effect of such a scenario on the economic solvency ratio is a 13% decrease in the solvency ratio, taking into account the transitional provisions and 8% and excluding a transitional provision or adjusting a stock scenario. This scenario reflects on equity, including the quantitative restrictions that apply to equity, on the economic solvency ratio and capital required for solvency purposes. The sensitivity test only reflects direct effects on the economic solvency ratio, holding all other factors fixed, and do not include effects derived from changes arising from other risk factors. It should be noted that the sensitivity is not necessarily linear; i.e., sensitivity at other rates is not necessarily a simple extrapolation of the sensitivity test presented.

The calculation of the solvency ratio is based, among other things, on forecasts, assessments, and estimates of future events, the materialization of which is uncertain and is not under the Company's control, and which should be considered as "forward-looking information" as the term is defined in Section 32A to the Securities Law, 1968.

⁴ The risk-free linked interest rate curves were taken from Fair Spread Ltd. To calculate the solvency ratio, the Company takes into account other components in addition to the risk-free interest rate. For more information, please see the Solvency Ratio Report published on October 28 2020 (Ref. No.: 2019-01-126082).

2.2. Arrangements in force

For further details regarding material regulatory provisions published during the reporting period, please see Section 4.1.1 to the 2020 Report on the Corporation's Business.

2.3. Draft laws, regulations and bills

Following are drafts of material regulatory provisions published during the reporting period and thereafter, which are not included in the 2020 Report on the Corporation's Business. For further details regarding additional drafts of material regulatory provisions published during the reporting period, please see Section 4.1 to the 2020 Report on the Company's Business.

2.3.1. In March 2021, the Commissioner of the Capital Market, Insurance and Savings published a draft letter addressed to managers of insurance companies titled "Principles of Recognizing Insurtech Investments in Calculating the Economic Solvency Ratio." According to the Economic Solvency Regime section in the consolidated circular, an insurance company may apply to the Commissioner for recognition of an intangible asset in respect of an insurtech investment. The purpose of the letter is to outline the principles to be considered when testing for recognition of an intangible asset in respect of an insurtech investment as part of the economic balance sheet and the procedure for approval of said requests.

2.3.2. In March 2021, the Commissioner of the Capital Market, Insurance and Savings published a draft letter addressed to managers of insurance companies titled "Update 2 of the Q&A File for the Application and Disclosure of the Economic Solvency Regime of an Insurance Company." The said letter is an updated version of the Q&A file published by the Commissioner in June 2018, which includes questions posed to the Capital Market, Insurance and Savings regarding the manner of implementing the solvency circulars and the Commissioner's interpretative position regarding these circulars. The updated Q&A file is published on the back of the publication of an amendment to the solvency circular of October 2020 and additional questions on the topic.

2.3.3. In April 2021, draft circular Amendment to the Provisions of the Consolidated Circular - Chapter 6, Part 3, Articles 2, 3, and 4 - Insurance of Personal Accidents - was published. According to Insurance of Personal Accidents Circular, which entered into force on May 1 2021, a policyholder shall be entitled to a daily compensation for a convalescence period. Due to insurers' claim that a daily compensation for a convalescence period significantly raises the premium, it is proposed to revoke the mandatory coverage for a convalescence period and enable customers to purchase the policy without it.

2.3.4. In April 2021, a draft Companies Regulations (Rules Regarding Compensation and Reimbursement of Expenses for External Directors (Temporary Order), 2021, was published. According to the Companies Regulations (Rules Regarding Compensation and Reimbursement of Expenses for External Directors, 2000, an external director is entitled to 60% of the reqular compensation for a meeting in which he/she participated using "communication means". On the back of the coronavirus crisis, it is proposed to prescribe, in a temporary order, that the board of directors of a publicly-traded company or a privatelyheld company that is a bond company subject to the Compensation Regulations, shall be entitled to decide that during the restriction period, the company shall pay full compensation for a meeting that, due to its nature, would have been held in person but takes place using means of communications due to a restriction or other justification arising from the constraints of the period, which prevent it from being held as it would have otherwise been held.

2.3.5. In March 2021, the Privacy Protection Authority published a draft policy paper titled Data Minimization. In its policy paper, the Privacy Protection Authority reviews the relevant legal provisions and presents recommendations to minimize the collection and saving of excess data in data bases. As a rule, the Authority recommends that all relevant parties implement the data minimization principles as part of their activity, to refrain - as far as possible - from saving information regarding a person that is unneeded for the purpose of collection or the database in which it is saved, and to save only the minimum information that is required and necessary for these purposes in terms of the scope and type of information saved, etc.

3. Developments in the Macroeconomic Environment

Following is a summary description of trends, events and developments in the Group's macroeconomic environment, that have or are expected to have an effect on the Group.

Financial markets in Israel 3.1.

During the reporting period, another outbreak of the coronavirus pandemic took place in Israel. In response, a third lockdown was imposed, which included distancing regulations; the vaccination drive continued and turned out to be a very swift. The combination of the lockdown and vaccination drive resulted in a decline in morbidity rates, which allowed for a gradual reopening of the economy, most of which was completed towards late February. Growth figures for 2020 turned out to be a pleasant surprise, reflecting a contraction of a mere 2.5%; with exports - which continued to expand in 2020 - standing out. On the other hand, there was a prominent decrease of about 9% in private consumption. The Bank of Israel revised its 2021 growth forecast to 6.3%. In February, the unemployment rate in Israel was 4.6% (excluding furloughed employees), a low rate considering that the economy was under partial lockdown.

The positive economic data in Israel along with the fast vaccination pace and current account surplus supported a sharp appreciation of the shekel against world currencies until on January 14 2021, the Bank of Israel took the unusual step of announcing an expanded foreign currency purchase plan for 2021; this measure allowed yields to be traded in the negative territory, supporting the shekel's devaluation. In contrast to the short-term interest rates - which, as aforesaid, remained very low - long-term interest rates rose sharply, similarly to the global trend, mainly on the back of the rise in commodity prices. The inflation environment in Israel remained negative, dropping by an annualized 0% in February. However, inflation expectations for the coming year have soared to approximately 1.3%. In March, elections were held in Israel for the fourth consecutive time, with no clear winner, which further exacerbated the uncertainty.

The Tel Aviv 125 index was up 6.12% during the period; the shekel weakened against the US dollar by 3.9%; the 10-year shekel yield rose from 0.8% to 1.2%; and the real yield remained a relatively stable 0.8%.

Subsequent to the balance sheet date

The first growth estimate in the first quarter described a contraction in GDP at an annualized 6.5%, against the background of the third closure and the effect of a decrease in car imports (which were brought forward to the end of 2020 due to tax considerations). The indications subsequent to the balance sheet date describe an almost complete return to activity in most industries. The percentage of furloughed employees fell to 2.9% in the second half of April, with the unemployment rate up slightly from 4.7% to 5.0%. The Central Bureau of Statistics' growth projections for 2021 were slightly revised downwards to reflect a 2.3% contraction. The Bank of Israel estimates that in 2021, growth will reach 6.3%. In its monetary decision, the Bank of Israel left the interest rate unchanged; however, it explained that it had no intention of withdrawing from its bond purchase plan ahead of schedule, before its end date in the fall, and would even consider extending it if necessary. The Governor of the Bank of Israel added that it had patience in terms of allowing inflation to reach the target range. Following a state deficit of 12% during the coronavirus year, the Bank of Israel predicts an 8% deficit in 2021; in addition, it suggested that following the coronavirus period, the economy will reach a higher debt level of 80%. The Bank of Israel's foreign exchange reserves reached USD 200 billion. The inflation environment in Israel continued to rise, with the CPI up by 0.3% in April and 0.8% annually. Inflation expectations continued to soar, in line with the global trend, rising a sharp 1.9% - higher than the average 10-year inflation expectations, which were up 1.7% (in OTC trading). The rise in the inflation environment is mainly attributed to global factors, including higher prices for raw materials and transport costs. Since the elections, no new government has been formed in Israel. During May, Israel launched a military operation called "The Guardian of the Walls", which lasted 11 days; during the operation, rockets were fired into central Israel. However, the disruptions to economic activity were negligible and the capital market continued to operate relatively similar to the global trend.

The TA 125 index rose by 6.5% subsequent to the balance sheet date; the shekel strengthened against the US dollar by 2.6%; the nominal 10-year shekel yield rose from 1.1% to 1.2%; and the real yield was up to -0.6%.

3.2. Capital markets abroad

The coronavirus pandemic continued around the world; but for the first time since the onset of the pandemic, the daily number of infections began to decline. More and more countries began to vaccinate their residents. In Europe, significant mobility restrictions continued. Recent data show that in 2020, GDP in the eurozone contracted by 6.2% and 3.5% in the U.S. The U.S. economy is more aggressively supported by fiscal accommodation measures; since the balance sheet date, the White House has delivered an additional aid package of USD 1.9 trillion. Chief procurement officer surveys also provided positive indications, with the US Chief Procurement Officer Survey soaring to 60.8 points - its highest level since 2004.

The global inflation environment recorded a marked increase - mainly on the back of the continued rise in commodity prices - with the CRB commodity price index up by a further 10.2%. The price of oil soared by 22%. Inflation expectations also rose sharply, with the 10-year US inflation expectations rising from 1.8% to 2.4%. Rising inflation expectations continued to push yields upwards worldwide, with 10-year ones in the US rising from 0.9% to 1.7% and in Germany - from -0.6% to -0.3%.

In equity markets, rotation continued between growth stocks - which lost momentum, and value stocks - which gained momentum.

The S&P 500 was up 5.8%, the EURO-STOXX 50 rose 10.3% and the MSCI EM was up 2.0%. The euro devalued by 4% against the US dollar, reaching a rate of approximately USD 1.17 per EUR 1.

Subsequent to the balance sheet date

In most Western countries, the coronavirus pandemic subsided, especially in the US, amid progress in the vaccination drive and restrictions, but recorded a sharp rise in multiple emerging economies, most prominently - in India. The International Monetary Fund updated its growth forecast for the global economy in 2021 from 5.5% to 6.0%. In the US, GDP data for the first quarter showed a 6.4% expansion, following President Biden's sizable fiscal plan - which totals USD 2.3 trillion for ten years, primarily for infrastructure projects, but was met by opposition from Republicans, and is expected to be cut down substantially. Global economic recovery is facing bottlenecks due to transportation and access to raw materials, which is reflected in a surprising drop in the US Chief Procurement Officer Survey in April, which fell to 60.7. Commodity prices rose sharply, with the CRB index rising a further 9% and oil adding another 7.5% to the WTI price, reaching USD 64. Inflation expectations soared worldwide, most prominently for the short term rather than for the long term. Inflation in the US (CPI) for April soared to an annual change of 4.2%. Central bank governors in Europe and the US have made it clear that they, too, regard the outbreak of inflation as an event with "temporary" indications and that they do not intend to deviate from their intention to leave the

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4. The Board of Directors' Explanations for the State of the Corporation's Business

4.1. General

The Group's operations are affected by constant changes in regulations and regulatory reforms that are executed gradually. The Group operates in a complex, changing reality in which it must prepare for such regulatory changes.

In addition, as the controlling shareholder of institutional entities, the Group must also deal with proposed changes in the minimum capital requirements that apply to its institutional entities, which impose, among other things, restrictions on dividend distribution by institutional entities.

The Group's operations and results are significantly affected by the capital markets, including, among other things, the low-interest environment that has implications for its insurance liabilities and on the returns embodied in the Group's financial asset portfolios, and consequently - on the management fees and financial margins from investments as well.

4.2. Summary of data from the Group's consolidated Financial Statements

Assets under management as of March 31 2021 Premiums, gross, contributions towards benefits and proceeds

in respect of investment contracts for 1-3/2021

(**) Including the assets of the Halman Aldubi investment house and excluding the assets of the IEC and IPC (including the assets of the IEC and IPC in the amount of NIS 46 billion; total assets under management - NIS 310 billion).

Income for 1-3/2021

The Phoenix Holdings Ltd.

Total assets under management by provident funds, excluding guaranteed return provident fund tracks, pension funds, ETFs, mutual funds, and customers' investment portfolios are not included in the Company's consolidated Financial Statements. Proceeds in respect of investment contracts are not included in premiums; rather, they are charged directly to liabilities in respect of insurance contracts and investment contracts.

For further details on the premiums in the various segments, please see Note 3 to the Financial Statements.

4.3. Description of the development of the Group's financial position

Following are key data from the consolidated balance sheets (in NIS billion):

Assets:

Total financial assets in respect of yield-dependent contracts and cash equivalents in respect of yield-dependent contracts as of March 31 2021, amounted to approximately NIS 82.3 billion, compared to approximately NIS 64.5 billion as of March 31 2020 and NIS 78 billion as of December 31 2020.

Liabilities:

Liabilities in respect of insurance contracts and yield-dependent investment contracts amounted to approximately NIS 81.3 billion as of March 31 2021, compared to approximately NIS 63.9 billion as of March 31 2020 and NIS 76.9 billion as of December 31 2020.

4.4. Description of the development of the Group's comprehensive income:

General 4.4.1.

4.4.1.1. At each reporting period, the Company reviews its sources of income, according to the segments breakdown, as outlined in Section 4.4.2. It should be noted that in the health insurance and in property and casualty insurance segments, the profitability analysis is based on a breakdown to underwriting earnings, which assumes a real return of 3% on the portion that is not backed by Hetz bonds, and earnings stemming from capital market effects, which include income from nostro investments above or below a real return of 3%, the effect of the interest rate curve and other non-recurring effects.

4.4.1.2 In the life insurance and long-term savings segment, the Company reviews its profitability across all reporting periods or the segment's profitability based on the following: a breakdown to nostro investment income, net of yield credited to policyholders; the effect of the interest rate curve, including changes in the K value and other non-recurring effects; and the underwriting earnings, which include, among other things, income from variable and fixed management fees.

4.4.2. Set forth below is an analysis of the Company's financial performance by segment in the first quarter of 2021 compared with the corresponding quarter last year (in NIS million):

In the first quarter, investment including pre-tax other comprehensive income) amounted to approximately NIS 3,915 million, compared with a loss of approximately NIS 8,779 million in the first quarter last year. It should be noted that a significant portion of the said investment gains or losses was carried to participating policies and had no direct effect on the Company's results. The Company's results are mainly impacted by investment income from its nostro portfolio, as reflected in Sections 4.4.3-4.4.4 below.

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against insurance and contingent claims reserves. It should be noted that a significant portion of the investment income was carried to participating policies and has no direct effect on the Company's results.

4.5.3. Following is an analysis of the main effects and changes on the results of the life insurance subsegment for the first quarter of 2021 compared to the corresponding quarter last year (in NIS million):

(*) Investment income is net of yields credited to policyholders. Please see Section 4.4.1.2

Compared with the corresponding quarter last year, the results in the first quarter were mainly affected, by the increase in income from nostro investments and an increase in underwriting earnings. Most of the increase in underwriting earnings arose from management fee income due to collection of variable management fees in the amount of NIS 199 million; this resulted from the rallies in financial markets in Israel and around the world, which brought about a year-on-year increase in the value of planholders' portfolios in The Phoenix Insurance, compared with no such collections in the same period last year - as a result of declines in financial markets in Israel and around the world following the spread of the corresponding quarter last year.

In addition, results in the first quarter improved due to changes in the risk-free interest rate curve and changes in the K factor, compared to last year, as reflected in the above chart.

For further details, please see Note 8 to the Financial Statements. For further details regarding sensitivity of the insurance liabilities to a change in the interest rates, please see Note 40 to the Annual Financial Statements.

4.5.4. The rate of redemptions out of the average reserve (in annual terms) was approximately 3.6% compared with 3.0% in the corresponding period last year. It should be noted that the general state

of the economy, transition from product to product, employment rates, the coronavirus crisis, employees' wages, and market competition all affect this rate.

4.5.5. Weighted returns on participating policies

Following are details concerning estimated net investment earnings attributed to policyholders of participating policies and management fees calculated according to the Insurance Commissioner's guidelines, based on insurance reserve balances and returns:

1-3/2021 1-3/2020 1-12/2020

In NIS million

Investment qains (losses) credited to
policyholders net of management fees(*) 2,845 (7,351) 3,333

Management fees 324 111 740

(*) Excluding investment income (losses) credited (debited) to policyholders in the health insurance segment.

Following are the nominal returns on participating policies issued from 1992 to 2003:

Policies issued up to 2004 (Fund J)

1-3/2021 1-3/2020 1-12/2020

Nominal returns before payment of
management fees
Nominal returns after payment of 4.33% (11.15%) 6.61%

management fees
Real returns before payment of 3.55% (11.30%) 4.99%

management fees
Real returns after payment of 4.23% (10.71%) 7.25%

management fees 3.45% (10.86%) 5.61%

Fluctuations in these returns are a function of capital market returns in Israel and abroad, changes in the consumer price index, and changes in the exchange rate of the shekel against major currencies.

Set forth below are the nominal returns on participating policies is ued from 2004 and thereafter:

Policies issued from 2004 and thereafter

1-3/2021 1-3/2020 1-12/2020

Nominal returns before payment of

management fees 4.19% (11.42%) 7.03%

Nominal returns after payment of
management fees 3.93% (11.65%) 5.97%

Real returns before payment of

management fees 4.09% (10.98%) 7.67%

Real returns after payment of
management fees 3.83% (11.21%) 6.61%

4.5.6. Provident funds subsegment

The Group manages provident and advanced education funds through The Phoenix Excellence, a wholly owned subsidiary of The Phoenix Insurance, which manages benefits and severance pay funds, advanced education funds, a central benefits and severance pay fund, a yield-guaranteed provident fund, an investment provident fund, a child long-term investment provident fund for savings, a self-directed benefits provident fund, and a personally managed advanced education fund.

For further details on the decision passed by The Phoenix Insurance's Board of Directors regarding the transfer of the shares of Phoenix Excellence Pension and Provident Funds Ltd. by way of a dividend in kind to the Company in the reporting year, please see Section 1.3.6 above.

As part of the implementation of its strategy and its wish to expand its asset management activities, in provident and pension funds activities in particular, on February 28 2021, the merger transaction - under which the Company acquired Halman-Aldubi - was completed. For further details, please see Section 1.3.7 below.

The pre-tax comprehensive income in the first quarter of 2021 amounted to approximately NIS 12 million compared to approximately NIS 7 million in the same period last year.

The increase in profit is mainly due to the increase in capital market yields, which affected both the margin in guaranteed return provident funds and in the investment income from the management company's nostro portfolio. The effect is NIS 15 million in investment income compared with last year, which was partially offset by the increase in general and administrative expenses and in marketing and purchase expenses.

For key data as to the financial results of the provident funds subsegment, please see Note 3 to the Financial Statements.

Developments in contributions towards benefits and total assets under management: Contributions towards benefits (in Assets under management (in NIS NIS million) million)

(*) Including the assets of the Halman Aldubi investment house (excluding the assets of the IEC and IPC provident funds in the amount of NIS 46 billion).

Based on Ministry of Finance data, 5 aggregate contributions towards benefits in the provident funds subsegment in the first quarter totaled approximately NIS 13,564 million, compared to a total of approximately NIS 11,309 million in the same quarter last year, reflecting an increase of approximately 19.9%. According to the Ministry of Finance data, as of March 31 2021, total assets under management in the provident funds subsegment amounted to approximately NIS 608 billion, compared to approximately NIS 483 billion as of March 31 2020, an increase of approximately 25.8%, which stems mainly from positive net accumulation in the provident funds subsegment.

4.5.7. Pension funds subsegment

The Group's pension subsegment is conducted through the Phoenix Excellence, a wholly-owned subsidiary of The Phoenix Insurance.

For further details on the merger of the management companies of the provident funds, advanced education funds, and pension funds, and on the decision passed by The Phoenix Insurance's Board of Directors regarding the distribution of the shares of Phoenix Excellence Pension and Provident Funds Ltd. as dividend in kind to the Company in 2020, please see Section 1.3.6 above.

As part of the implementation of its strategy and its wish to expand its asset management activities in general and its pension funds activities in particular, on February 28 2021, the merger transaction - under which the Company acquired Halman-Aldubi - was completed. For further details, please see Section 1.3.7 below.

⁵ Based on Gemel Net data.

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4.7.2. Following is the pre-tax comprehensive income in the various subsegments of property and casualty insurance for the first quarter of 2021 compared with the corresponding quarter last year (in NIS million):

4.7.3. Following are explanations for the pre-tax underwriting earnings in the various subsegments of property and casualty insurance for the first quarter of 2021 compared with the corresponding quarter last year (in NIS million):

The decrease in underwriting earnings in the compulsory motor insurance subsegment in the first quarter compared with the first quarter of last year is due to moderation in the release of insurance liabilities in respect of previous years and from a decrease in the reinsurance liabilities.

The increase in underwriting earnings in the motor property subsegment in the first quarter compared with the first quarter of last year is due to a decrease in the insurance liabilities in respect of previous years.

The increase in underwriting earnings in the property and other subsegment stems mainly from the impact of weather damage in the same quarter last year, mostly on the business subsegment and the effect of the flight cancellation subsegment following the spread of the coronavirus.

4.7.4. Following is an analysis of the gross loss ratio and combined ratio, and retention loss ratio in the motor property and other subsegments:

Motor property

In NIS million

1-3/2021 1-3/2020 1-12/2020

Gross loss ratio 64.9% 71.7% 66.9%

Retention loss ratio 64.8% 71.7% 66.9%

Gross combined ratio 89.5% 99.2% 96.4%

Retention combined ratio 89.4% 99.2% 96.4%

Property and other subsegments

In NIS million

1-3/2021 1-3/2020 1-12/2020

Gross loss ratio 29.2% 58.7% 40.7%

Retention loss ratio 19.9% 63.2% 37.8%

Gross combined ratio 53.4% 83.9% 68.9%

Retention combined ratio 45.3% 91.3% 76.4%

4.8. Financial services segment

Most of the segment's activities are carried out through Excellence.

Following is an analysis of the main effects and changes on the results of the financial services segment for the first quarter of 2021 compared to the corresponding quarter last year (in NIS million):

The decrease in earnings in the first quarter compared with the corresponding quarter last year stemmed mainly from the Company's recognition of a one-off earning of NIS 15 million in the market-making activity in the corresponding quarter last year. The increase in expenses is due to an increase in assets under management of the retail brokerage portfolio.

4.9.

Following is an analysis of the main effects and changes on the results of the insurance agencies segment for the first quarter of 2021 compared to the corresponding quarter last year (in NIS million):

Most of the increase in profit is due to an increase in income from growth and an increase of NIS 29 million in sales and NIS 9 million from investment income.

4.10. Other segments and activities not attributed to the operating segments Following is an analysis of the main effects and changes on the results of "other" segment and activity that is not attributed to activity segments in the first quarter of 2021 compared to the corresponding quarter last year (in NIS million):

In the first quarter, loss amounted to approximately NIS 25 million compared with a loss of approximately NIS 532 million in the corresponding quarter last year. This said change stems primarily from substantial losses in the capital market in the corresponding quarter last year due to the coronavirus crisis.

4.11. Analysis of cash flow development

The consolidated cash flows from operating activities in the reporting period amounted to approximately NIS 1,382 million. The consolidated cash flows used for investing activities in the reporting period amounted to NIS 399 million and mainly included a total of NIS 51 million used for software development and purchase, a total of NIS 12 million used to purchase property, plan and equipment, and a total of NIS 337 million used to acquire companies consolidated for the first time. The consolidated cash flow provided by financing activities in the reporting period amounted to approximately NIS 419 million; the cash flows included, among other things, a total of NIS 348 million arising from the issuance of a financial liability, a total of NIS 70 million used to repay financial liabilities, and a total of NIS 117 million used to assume financial liabilities.

The Group's cash and cash-equivalent balances increased from a total of approximately NIS 12,010 million at the beginning of the reporting period to approximately NIS 13,412 million at the end of the reporting year.

5. Disclosure on Exposure to, and Management of, Market Risks

During the reporting period, there were no material changes in exposure to market risks and management methods thereof in relation that which is described in the 2020 Periodic Report, except as follows:

In February 2021, the Company expanded Bonds (Series 5) by 222,616 thousand bonds of NIS 1 p.v. each, for a total of NIS 222,616 thousand. The bonds (principal and interest) are linked to the CPI, and carry a linked annual interest, as stated, of 0.44%, payable in two semi-annual installments, in April and October of each calendar year from 2021 to 2030. Following the expansion, there has been a change in the exposure to linked interest rates in relation to the data as of December 31 2020.

The following table summarizes the results of the sensitivity tests to the linked interest rate on comprehensive income before tax, as of March 31 2021. The results are presented in NIS million, and do not include The Phoenix Insurance:

Profit (loss) from changes in the
risk factor Profit (loss) from changes in the
risk factor

Type of
instrument Absolute
increase of
2% 10%
increas
e 50/0
increas
e Fair
value 5%
decreas
e 10%
decreas
e Absolute
decrease of
20/0

Government
bonds 37.8

Corporate
bonds (1.8) (0.1) 31.9 0.1 2.0

Capital note to
the insurance (49.1) (1.6) (0.8) 420.8 0.8 1.6 58.0

company
Total assets (50.9) (1.7) (0.9) 490.4 0.9 1.7 60.0

The Phoenix
bonds(*) 75.6 3.2 1.6 (810.3) (1.6) (3.2) (87.7)

Total
liabilities 75.6 3.2 1.6 (810.3) (1.6) (3.2) (87.7)

Total 24.7 1.4 0.7 (319.9) (0.7) (1.4) (27.7)

(*) The value of The Phoenix's bonds under the model is 3.18% lower than their market value (836.8).

In February 2021, the Company expanded Bonds (Series 4) by 127,384 thousand bonds of NIS 1 p.v. each, for a total of NIS 127,384 thousand. The bonds (principal and interest) are not linked to the CPI, and carry a non-linked annual interest, as stated, of 1.38%, payable in four quarterly installments, in January, April, July and October of each calendar year from 2021 to 2028. Following the expansion, there has been a change in the exposure to non-linked shekel interest rates in relation to the data as of December 31 2020.

The following table summarizes the results of the sensitivity tests to the non-linked shekel interest rate on comprehensive income before tax, as of March 31 2021. The results are presented in NIS million, and do not include the insurance company:

Profit (loss) from changes in the risk factor Profit (loss) from changes in the
risk factor

Type of
instrument Absolute
increase of
20/0 10%
increas
e 5%
increas
e Fair
value 5%
decreas
e 10%
decreas
e Absolute
decrease of
20/0

Government
honds (0.2) 4.5 0.2

Corporate
honds 1.5 0.1

Capital note to
the insurance
company (26.7) (1.2) (0.6) 238.6 0.6 1.2 31.7

Total assets (26.9) (1.2) (0.6) 244.5 0.6 1.2 31.9

The Phoenix
bonds(*) 19.9 0.5 0.2 (668.6) (0.2) (0.5) (22.1)

Total
liabilities 19.9 0.5 0.2 (668.6) (0.2) (0.5) (22.1)

Total (7.1) (0.7) (0.4) (424.1) 0.4 0.7 9.8

(*)

Assumptions underlying the calculations

Fair value: Fair value was calculated using the discounted cash flow model, using the appropriate interest rate for the cash flow period. The discount rate was calculated based on the market interest rate for the cash flow period, plus the risk premium derived from the security's rating. Market interest rate data was taken from the Reuters' database, that feeds The Phoenix's risk management system, and risk premium data (credit spreads) were taken from Fair Spread.

Scenarios: Daily historical changes in the past ten years were tested for each of the relevant risk factors (such as exchange rates and shares). The maximum and minimum daily changes were calculated for each risk factor, excluding interest rate risk, for which the calculation was based on a 2% absolute increase/decrease during a single day. This scenario was selected after a study of the yield curve database found that in the past 10 years, no absolute change exceeding 2% was observed in any single day. These changes served as scenarios for potential changes in each of the risk factors. Scenario outcomes were calculated at the single asset level, so as to avoid distorting results by aggregating different instruments.

Linkage bases of assets and liabilities in the consolidated balance sheet (in NIS thousand) as of March 31 2021

1-41

NIS No
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item
s o var
iou
s co
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any To
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ible
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set
ng
s - - - 1,
300
040
, - 998
579
, 2,
298
619
,

De
fer
red
tax
set
as
s - - - 57,
245 - - 57,
245

De
fer
red
isit
ion
sts
ac
qu
co - - - - - 1,
819
463
, 1,
819
463
,

Pro
ty,
lan
t &
uip
nt
per
p
eq
me - - - 197
283 - 719
468 916
751

Inv
in
inv
est
nts
est
me
ees 81,
728 15,
651 6,
170 ,
144
725 - ,
522
836 ,
771
110

Inv
in
t of
ield
-de
den
est
nt p
erty
t co
ntra
cts
me
rop
res
pec
y
pen - - - ,
- - ,
1,
853
064 ,
1,
853
064

Inv
the
est
nt p
erty
me
rop
- o
r - - - - - ,
2,
721
934 ,
2,
721
934

Re
ins
set
ura
nce
as
s - - - - - ,
2,
650
209 ,
2,
650
209

Cre
for
of s
dit
cha
ritie
pur
se
ecu
s 399
000 - 53,
000 - - ,
- ,
452
000

Cu
nt t
ets
rre
ax
ass ,
- 17,
148 - - - 9,
749 ,
26,
897

Re
cei
vab
les
d d
ebi
t ba
lan
an
ces 140
467 - 3,
371 - - 408
464 552
302

Pre
miu
llec
tibl
ms
co
e ,
- - - - - ,
739
902 ,
739
902

He
ld-f
sal
f d
isp
l gr
ts o
or-
e a
sse
osa
oup - - - 44,
473 - ,
- ,
44,
473

t of
Fin
ial
inv
est
nts
in
ield
-de
den
t co
ntra
cts
anc
me
res
pec
pen
y - - - - - 69,
130
062 69,
130
062

Fin
ial
inv
fo
r ho
lde
f bo
nds
ET
Ns
hor
t E
TN
est
nts
anc
me
rs o
, s
s, , ,

,
ite
ET
Ns
dep
osi
rtifi
and
d b
ond
t ce
cat
str
uct
com
pos
es
ure
s - - - - 23
1,
000 - 23
1,
000

,
Ma
rke
tab
le d
ebt
set
as
s 31,
443 68,
830 385 - - 7,
390
646 7,
49
1,
305

No
ark
ble
de
bt a
eta
ts
n-m
sse 612
892 196
307 - - - ,
13,
524
006 14,
333
205

Sh
are
s ,
- ,
- - 61,
228 - ,
2,
056
370 ,
2,
117
598

Oth
er 29,
267 - 817 14,
396 - ,
3,
490
678 ,
3,
535
158

En
ber
ed
h a
nd
h e
iva
len
ts f
hol
der
f bo
nds
cum
cas
cas
qu
or
s o , ,

,
han
ded
fu
nds
hor
cha
ded
fu
nds
osi
tra
t ex
tra
te
exc
ge-
, s
nge
, co
mp

han
ded
fu
nds
dep
osi
rtifi
and
d b
ond
tra
t ce
cat
str
uct
exc
ge-
es
ure
s

, - - - - - - -

Ca
sh
and
sh
iva
len
ts i
f y
ield
-de
den
ct o
t co
ntra
cts
ca
equ
n re
spe
pen

- - - - - 11,
162
653 11,
162
653

Oth
ash
d c
ash
uiv
ale
nts
er c
an
eq 374
449 - 32,
585 - - ,
1,
842
320 ,
2,
249
354

, , ,

To
tal
ets
ass 1,
669
246
, 297
936
, 96,
329 1,
819
390
, 231
000
, 121
040
403
,
, 125
154
304
,
,

Lia
bilit
ies
in
t of
ins
d n
ield
ntra
cts
res
pec
ura
nce
co
an
on-
y

dep
end
inv
ent
est
nt c
ont
ts
me
rac - - - - - 23,
904
976
, 23,
904
976
,

t of
Lia
bilit
ies
in
ins
ntra
cts
d y
ield
-de
den
t
res
pec
ura
nce
co
an
pen

inv
est
nt c
ont
ts
me
rac - - - - - 81,
296
403
, 81,
296
403
,

Lia
bilit
ies
in
t of
de
fer
red
tax
res
pec
es - - - 22,
311 - 912
100
, 934
41
1
,

Lia
bilit
for
loy
ben
efit
et
y
em
p
ee
s, n 22,
526 - - - - 54,
130 76,
656

Lia
bilit
in r
of
ect
t ta
y
esp
cur
ren
xes - 18,
688 - - - 51,
916 70,
604

Pay
abl
and
dit
bal
es
cre
anc
es 489
240 300 2,
541 - - 2,
323
096 2,
815
177

Lia
bilit
ies
fo
r bo
nds
ET
Ns
hor
t E
TN
ite
ET
Ns
and
, s
s, c
om
pos , , ,

,
red
bo
nds
stru
ctu - - - - 228
000 - 228
000

Fin
ial
liab
ilitie
anc
s 1,
457
362 1,
118
319 59,
000 - ,
- 5,
113
299 ,
7,
747
980

Lia
bilit
ies
cla
ssi
fied
he
ld f
ale
as
or s ,
- ,
- - 10,
458 - ,
- ,
10,
458

liab
ilit
ies
To
tal
To
tal 1,
969
128
,
299
882 1,
137
307
,
839
370 61,
541
787 32,
769
786
621 228
000
,
000 113
655
920
,
,
384
483 117
084
665
,
,
069
639

exp
os
ure (
)
, (
)
, 34, 1,
, 3, 7,
, 8,
,

Linkage base reports

Linkage bases of assets and liabilities in the consolidated balance sheet (in NIS thousand) as of March 31 2020

NIS rei
Fo No
n- ET
Ns i ins
Isr
ael

gn
cu
rre net
mo
ary - lin
kag
e t ura
nce

No
n-l
ink
ed CP
I-li
nke
d ncy item
s o var
iou
s co
mp
any To
tal

Inta
ible
As
set - - - 818
111 - 977
930 1,
796
041

ng
s
De
fer
red
tax
set
as
s - - - ,
28,
870 - ,
- ,
28,
870

De
fer
red
isit
ion
sts
ac
co 768
459 768
459

qu
Pro
lan
t & - - - - - 1,
, 1,
,

uip
ty,
nt
per
p
eq
me - - - 138
868
, - 635
493
, 774
361
,

Inv
in
inv
est
nts
est
me
ees 72,
478 15,
200 6,
170 150
145
, - 49
1,
738 735
731
,

Inv
in
t of
ield
-de
den
est
nt p
erty
t co
ntra
cts
me
rop
res
pec
y
pen - - - - - 1,
631
541
, 1,
631
541
,

Inv
est
nt p
erty
the
me
rop
- o
r - - - - - 2,
613
378
, 2,
613
378
,

Re
ins
set
ura
nce
as
s - - - - - 2,
475
063
, 2,
475
063
,

Cre
dit
for
cha
of s
ritie
pur
se
ecu
s 255
500
, - 8,
500 - - - 264
000
,

Cu
nt t
ets
rre
ax
ass - 11,
051 - - - 150
235
, 161
286
,

Re
cei
vab
les
d d
ebi
t ba
lan
an
ces 219
774
, - - - - 405
538
, 625
312
,

Pre
miu
llec
tibl
ms
co
e - - - - - 823
372
, 823
372
,

Fin
ial
inv
in
t of
ield
-de
den
est
nts
t co
ntra
cts
anc
me
res
pec
y
pen - - - - - 55,
157
099
, 55,
157
099
,

Fin
ial
inv
fo
r ho
lde
f bo
nds
ET
Ns
hor
t E
TN
est
nts
anc
me
rs o
, s
s,
,

ite
ET
Ns
dep
osi
rtifi
and
d b
ond
t ce
cat
str
uct
com
pos
es
ure
s
, - - - - 275
000
, - 275
000
,

Ma
rke
tab
le d
ebt
set
as
s 16,
278 46,
205 87 - - 458
764
7,
, 521
334
7,
,

No
ark
eta
ble
de
bt a
ts
n-m
sse 126
670
, 138
816
, 26,
000 - - 13,
213
841
, 13,
505
327
,

Sh
are
s - - - 51,
253 - 1,
384
578
, 1,
435
831
,

Oth
er - - 15,
530 - - 2,
468
472
, 2,
484
002
,

En
ber
ed
h a
nd
h e
iva
len
ts f
hol
der
f bo
nds
cum
cas
cas
qu
or
s o
,

fu
fu
han
tra
ded
nds
hor
t ex
cha
tra
ded
nds
osi
te
exc
ge-
, s
nge
, co
mp

han
tra
ded
fu
nds
dep
osi
t ce
rtifi
cat
and
str
uct
d b
ond
exc
ge-
es
ure
s
,

- - - - - - -

Ca
sh
and
sh
iva
len
ts i
f y
ield
-de
den
ct o
t co
ntra
cts
ca
equ
n re
spe
pen

- - - - - 512
737
7,
, 512
737
7,
,

Oth
ash
d c
ash
uiv
ale
nts
er c
an
eq 490
172
, - 4,
000 - - 1,
209
087
, 1,
703
259
,

To
tal
ets
ass 1,
187
042
, 211
272
, 54,
117 1,
187
247
, 275
000
, 100
377
325
,
, 103
292
003
,
,

t of
Lia
bilit
ies
in
ins
ntra
cts
d n
ield
res
pec
ura
nce
co
an
on-
y

dep
end
inv
ent
est
nt c
ont
ts
me
rac - - - - - 23,
311
893
, 23,
311
893
,

Lia
bilit
ies
in
t of
ins
d y
ield
-de
den
ntra
cts
t
res
pec
ura
nce
co
an
pen

inv
est
nt c
ont
ts
me
rac - - - - - 63,
930
828
, 63,
930
828
,

Lia
bilit
ies
in
t of
de
fer
red
tax
res
pec
es - - - 6,
043 389
742
, 395
785
,

for
efit
Lia
bilit
loy
ben
et
em
p
ee
s, n
y 13,
504 - - - - 43,
265 56,
769

Lia
bilit
in r
of
ect
t ta
y
esp
cur
ren
xes - 10,
273 - - - 10,
480 20,
753

Pay
abl
and
dit
bal
es
cre
anc
es 228
21
1 - - - - 2,
002
397 2,
230
608

Lia
bilit
ies
fo
r bo
nds
ET
Ns
hor
t E
TN
ite
ET
Ns
and
, s
s, c
om
pos , , ,

,
red
bo
nds
stru
ctu - - - - 272
000 - 272
000

Fin
ial
liab
ilitie
anc
s 989
604 587
804 21,
093 - ,
- 5,
298
894 ,
6,
897
395

Pro
vis
ion
fo
fo
isit
ion
of
inv
ent
est
r pa
ym
r ac
qu
an
ee ,
- ,
- - - ,
- ,
-

To
tal
liab
ilit
ies 1,
231
319
, 598
077
, 21,
093 6,
043 272
000
, 94,
987
499
, 97,
116
031
,

(44,277) (386,805) 33,024 1,181,204 3,000 6,175,972

5,389,826 6. Linkage base reports

1-42

Total exposure

Linkage bases of assets and liabilities in the consolidated balance sheet (in NIS thousand) as of December 31 2020

1-43

NIS Fo
rei
gn
cu
rre
ncy No
n-
net
mo
ary ET
Ns
- lin
kag
e t
o va li ins
Isr
ae
e co
ura
nc

No
n-l
ink
ed CP
I-li
nk
ed ite
ms rio
us mp
an
y To
tal

Inta
ible
As
set
ng
s - - - 1,
013
232
, - 1,
003
43
6
, 2,
016
668
,

De
fer
red
ta
ts
x a
sse - - - 104
55
, - - 104
55
,

De
fer
red
isit
ion
sts
ac
qu
co - - - - - 1,
712
630 1,
712
630

Pro
rty
lan
t &
uip
nt
pe
, p
eq
me - - - 138
924 - ,
722
94
1 ,
86
1,
865

Inv
in
inv
est
nts
est
me
ees 81
32
0 31
9 170 ,
150
933 ,
503
127 756
86
9

of
Inv
est
nt
in r
ect
ield
-de
nde
nt c
ont
ts ,
- 15,
- 6,
- ,
- -
- ,
1,
83
9,
57
6 ,
1,
83
9,
57
6

rty
me
pro
pe
esp
pe
rac
y
Inv
the
est
nt - - - - - 2,
728
710 2,
728
710

rty
me
pro
pe
- o
r
Re
ins
set ,
2,
53
1,
65
9 ,
2,
53
1,
65
9

ura
nce
as
s
Cre
dit
for
rch
of
itie -
374
000 - -
29
000 - - 40
000

pu
ase
se
cur
s
Cu , -
22
6 , - - -
196 3,
422

nt t
ets
rre
ax
ass -
22 6, - - - 6,

Re
cei
ble
nd
de
bit
ba
lan
va
s a
ces 129
0
, - - - - 40
0,
572 52
9,
792

Pre
miu
llec
tib
le
ms
co - - - - - 65
1,
825 65
1,
825

Fin
cia
l in
s in
f y
ield
-de
nde
tm
ent
ct o
nt c
ont
ts
an
ves
re
spe
pe
rac - - - - - 65
57
0,
44
7
, 65
57
0,
44
7
,

Fin
cia
l in
s fo
r h
old
of
bo
nds
ET
Ns
ho
rt E
TN
tm
ent
an
ves
ers
, s
s,
,

ific
ite
ET
Ns
de
it c
ert
ate
nd
str
uct
d b
ond
com
pos
pos
s a
ure
s
, - - - - 23
9,
000 - 23
9,
000

Ma
rke
tab
le d
ebt
set
as
s 12,
80
9 29
32
6
, 2,
067 - - 8,
05
1,
26
6 8,
095
46
8
,

No
ark
ble
de
bt a
eta
ts
n-m
sse 57
9,
900 195
392
, - - - 13,
23
1,
897 14,
007
189
,

Sh
are
s - - - 39
52
0
, - 1,
860
47
3
, 1,
89
9,
993

Oth
er 21
59
7
, 51
1 - 25
29
7
, - 3,
20
0,
064 3,
24
7,
46
9

En
be
red
sh
and
sh
uiv
ale
fo
r h
old
of
bo
nds
nts
cum
ca
ca
eq
ers
,

han
ded
fu
nds
ho
xch
ded
fu
nds
osi
-tra
rt e
tra
te
exc
ge
, s
an
ge
, co
mp

han
ded
fu
nds
de
it c
ific
nd
d b
ond
-tra
ert
ate
str
uct
exc
ge
pos
s a
ure
s
, - - - - - -

Ca
sh
and
sh
uiv
ale
in
f y
ield
-de
nde
nts
t o
nt c
ont
ts
ca
eq
res
pec
pe
rac

- - - - - 10,
464
21
6
, 10,
464
21
6
,

Oth
h a
nd
h e
iva
len
ts
er
cas
cas
qu 55
7,
159 - 26
59
6
, - - 962
148
, 1,
545
903
,

To
tal
set
as
s 75
005
1,
6, 24
6,
774 63
833
, 1,
423
010
, 23
9,
000 115
435
183
,
, 805
119
163
,
,

Lia
bili
ties
in
f in
d n
ield
t o
tra
cts
res
pec
sur
an
ce
con
an
on
-y

de
nde
inv
nt
est
nt c
ont
ts
pe
me
rac - - - - - 23
46
9,
887
, 23
46
9,
887
,

f in
Lia
bili
ties
in
t o
tra
cts
d y
ield
-de
nde
nt
res
pec
sur
an
ce
con
an
pe

inv
est
nt c
ont
ts
me
rac - - - - - 76
856
913
,
, 76
856
913
,
,

Lia
bili
ties
in
f d
efe
d t
t o
res
pec
rre
axe
s - - - 50
56
7
, - 847
23
7
, 897
804
,

Lia
bili
for
loy
be
nef
its,
ty
t
em
p
ee
ne 14,
035 - - - - 45
32
7
, 59
362
,

of
Lia
bili
ty
in r
ect
nt t
esp
cu
rre
axe
s - 20
422
, - - - 43
022
, 63
444
,

Pa
ble
nd
dit
ba
lan
ya
s a
cre
ces 22
8,
49
8 - - - - 2,
224
353
, 2,
452
85
1
,

Lia
bili
ties
fo
r b
ond
ET
Ns
ho
rt E
TN
ite
ET
Ns
d
s,
, s
s, c
om
pos
an

d b
ond
str
uct
ure
s - - - - 23
8,
000 - 23
8,
000

Fin
cia
l lia
bili
ties
an 1,
26
180
7, 864
958
, 45
50
0
, 8,
000 - 4,
858
076
, 043
714
7,
,

To
tal
lia
bil
itie
s 1,
50
9,
713 885
38
0
, 45
50
0
, 58
567
, 23
8,
000 108
344
815
,
, 111
08
1,
975
,

To
tal
ex
po
su
re 24
6,
292 (
638
606
)
, 18,
333 1,
364
443
, 1,
000 7,
090
36
8
, 8,
08
1,
830

Linkage base reports

7. Corporate Governance Aspects

7.1. Effectiveness of internal control over financial reporting and disclosure

7.1.1. The Securities Regulations

Amendment No. 3 to the Securities Regulations (Periodic and Immediate Reports), 2009 (hereinafter - "ISOX"), which deals with internal controls over financial reporting and the disclosure thereof (hereinafter - the "Regulations"), was published in December 2009. The amendment enacts a number of changes aimed at improving the quality of financial reporting and disclosure by reporting corporations.

As from the publication date of the ISOX amendment, and as set out in the Company's previous Reports of the Board of Directors, the Company has acted and is acting on an ongoing basis to implement the required procedure in The Phoenix Group in accordance with the provisions of the ISOX amendment. In accordance with the provisions of the ISOX amendment, the Company opted to implement to the internal controls of all of its consolidated institutional entities the provisions of the circulars of the Commissioner of the Capital Market, Insurance and Savings applicable thereto - the Institutional Entities Circular 2009-9-10, "Management's Responsibility for Internal Controls over Financial Reporting"; Institutional Entities Circular 2010-9-6, "Management's Responsibility for Internal Controls over Financial Reporting - Amendment"; Circular 2010-9-7 "Internal Controls over Financial Reporting - Statements, Reports and Disclosures"; Circular 2012-9-5 "Internal Controls over Financial Reporting - Statements, Disclosures and Management's Responsibility for Internal Controls over Financial Reporting - Amendments"; and Circular 2015-9-15, "Internal Controls over Financial Reporting - Statements, Reports, Disclosures and Management's Responsibility for Internal Controls over Financial Reporting - Amendments" (hereinafter - "Management's Responsibility Circulars").

The processes relating to the activities of institutional entities are also addressed in the Insurance Commissioner's Circulars, please see Section 7.1.2. below.

7.1.2. The Commissioner's Circulars

Alongside the process described in Section 7.1.1 above, The Phoenix Group's institutional entities apply the provisions of Management's Responsibility Circulars pertaining to controls and procedures regarding disclosure and internal controls over financial reporting of an institutional entity, and implement the procedures required in connection therewith, as described below; this is done in accordance with the stages and dates set out in the abovementioned circulars and in collaboration with external consultants engaged for that purpose. As part of this process, the Group's institutional entities adopted the internal control model of COSO - the Committee of Sponsoring Organization of the Treadway Commission - which is a generally accepted framework for assessment of internal controls.

" Disclosure controls and procedures

Managements of the institutional entities, together with their CEOs and CFOs, assessed the effectiveness of the controls and procedures concerning the said institutional entities' disclosure in their financial statements as of the end of the period covered in this report. Based on this assessment, the CEOs and CFOs of the institutional entities in The Phoenix Group concluded that, as of the end of this period, the controls and procedures as to the institutional entities' disclosure are sufficiently effective for recording, processing, summarizing, and reporting the information that the institutional entities are required to disclose in their quarterly report in accordance with the provisions of the law and the reporting provisions set by the Commissioner of the Capital Market, Insurance, and Savings and on the date set out in these provisions.

Internal controls over financial reporting

During the quarter ending March 31 2021, no changes took place in the internal control over financial reporting of the Group's institutional entities that had a material effect, or is expected to have a material effect, on the institutional entities' internal control over financial reporting. Furthermore, the Group's institutional entities are improving and streamlining processes and/or internal controls and/or customer service.

The reports and statements relating to the relevant processes are attached to the financial statements of The Phoenix Group's institutional entities, in accordance with the provisions of Management's Responsibility Circulars.

8. Disclosure Provisions Relating to the Corporation's Financial Reporting

8.1. Subsequent events

For further details regarding events subsequent to the balance sheet date, please see Note 9 to the Financial Statements.

8.2. Dedicated disclosure for the Company's bondholders

Series/issuance date Bonds Series 3 Bonds Series 4 Bonds Series 5

Rating agency Midroog / Ma'alot Midroog / Ma'alot Midroog / Ma'alot

Rating as of the report
date Aa3.il iIAA /- Aa3.il iIAA /- Aa3.il iIAA /-

Par value on issuance
date 272,191,000 ש"ח NIS 391,384,000 NIS 822,616,000

Interest type Non-linked Non-linked CPI-linked

Nominal interest 2.22% The Bank of Israel's variable
quarterly interest rate plus a
1.28% spread 0.44%

Effective interest rate on
issuance date Approximates the
nominal interest 1.7% 0.55%

Listed on the TASE Yes Yes Yes

Principal payment dates 5
equal
annual
installments of 16.66%
on July 31 of each of
the years 2022 through
and
2026,
one
installment of 16.7%
on July 31 2027. 2 equal annual installments
of 12% on July 31 of each of
the years 2020 and 2021 and
4 equal annual installments
of 19% on July 31 of each of
the years 2025 through 2028. 3
equal
annual
installments of 4% on July
1 of each of the years
2022 through 2024, one
installment of 28% on
May 1 2028, and 2 equal
installments
annual
of
30% on May 1 of each of
the years 2029 through
2030.

Interest payment dates Semi-annual interest
on January 31 and
July 31 Quarterly interest on
January 31, April 30, July
31, and October 31 Semi-annual interest on
May 1 and November 1

Nominal p.v. as of Mar.
31 2021 NIS 272 million NIS 391 million NIS 822 million

CPI-linked nominal p.v.
as of Mar. 31 2021 NIS 272 million NIS 391 million NIS 822 million

Carrying amount of
bonds' outstanding
balances as of Mar. 31
2021 NIS 271 million NIS 389 million NIS 808 million

Series/issuance date Bonds Series 3 Bonds Series 4 Bonds Series 5

Carrying amount of
interest payable as of
Mar. 31 2021 NIS 0.9 million NIS 0.8 million NIS 1.48 million

Market value as of Mar.
31 2021 (*) NIS 284 million NIS 393 million NIS 837 million

Series' materiality The series is material
as this term is defined
in Regulation
10(b)13(a) of the
Securities Regulations
(Periodic and
Immediate Reports),
1970. The series is material as this
term is defined in Regulation
10(b)13(a) of the Securities
Regulations (Periodic and
Immediate Reports), 1970. The series is material as
this term is defined in
Requlation 10(b)13(a) of
the Securities Regulations
(Periodic and Immediate
Reports), 1970.

(*) The market value includes interest accrued as of March 31 2021.

Contractual restrictions and financial covenants

As part of the deed of trust of the Company's Series 3 bonds, the Company undertook not to place a general floating charge on its assets as long as Series 3 bonds are not repaid in full, unless it obtained the bondholders' consent in advance and placed on that date a lien of the same rank in favor of Series 3 bondholders. Furthermore, with respect to Series 3 bonds, the Company assumed restrictions on distribution of dividends and expansion of the bonds series; the Company also undertook to comply with financial covenants whereby its shareholders' equity will not fall below NIS 2.5 billion for two consecutive quarters, and that the Company's net financial debt to total assets ratio will not exceed 50% for two consecutive quarters. For further details, please see the Shelf Offering Report dated January 22 2018.

As part of the deed of trust of the Company's Series 4 bonds, the Company undertook not to place a general floating charge on its assets as long as Series 4 bonds are not repaid in full, unless it has obtained the bondholders' consent in advance and placed on that date a lien of the same rank in favor of Series 4 bondholders. Furthermore, with respect to Series 4 bonds, the Company assumed restrictions on distribution of dividends and expansion of the bonds series; the Company also undertook to comply with financial covenants whereby its shareholders' equity will not fall below NIS 2.9 billion for two consecutive quarters, and that the Company's net financial debt to total assets ratio will not exceed 50% for two consecutive quarters. For further details, please see the Shelf Offering Report dated May 7 2019.

As part of the deed of trust of the Company's Series 5 bonds, the Company undertook not to place a general floating charge on its assets as long as Series 5 bonds are not repaid in full, unless it has obtained the bondholders' consent in advance and placed on that date a lien of the same rank in favor of Series 5 bondholders.

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Condensed Consolidated Interim Financial Statements

Part 2

Table of Contents

Page

Review Report of the Auditors 2-3

Condensed Consolidated Interim Statements of Financial Position 4-5

Condensed Consolidated Interim Income Statements5

Condensed Consolidated interim Statements of Comprehensive Income 6-7

Condensed Consolidated Interim Statements of Changes in Equity 8-10

Condensed Consolidated Interim Statements of Cash Flow11-13

Notes to the Condensed Consolidated Interim Financial Statements14-100

Appendix to the Condensed Consolidated Interim Financial Statements….101-104

Kost Forer Gabbay & Kasierer Tel.+972-3-6232525

Menachem Begin Road 144A, Tel Aviv 6492102

Fax +972-3-5622555 ey.com

Auditors' Review Report to the Shareholders of The Phoenix Holdings Ltd.

Introduction

We have reviewed the accompanying financial information of The Phoenix Holdings Ltd. and subsidiaries ("the Company"), the condensed consolidated statement of financial statement of financial position as of March 31 2021, the related condensed consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the three months period then ended. The Company's Board of Directors and management are responsible for the preparation and presentation of interim financial information for this interim period in accordance with IAS 34, "Interim Financial Reporting", and are responsible for the disclosure requirements set by the Commissioner of the Capital Market, Insurance and Savings and in accordance with the Financial Services (Insurance) Supervision Law, 1981 and they are also responsible for preparing financial information for this interim period under Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970, insofar as these regulations apply to a corporation that consolidates insurance companies. Our responsibility is to express a conclusion regarding the financial information for this interim period based on our review.

We did not review the condensed interim financial information of certain subsidiaries, whose ass ets included in consolidation constitute approximately 1.8% of a total consolidated assets as of March 31 2021 and whose revenues included in consolidation constitute approximately 1.2% of total consolidated revenues for the three months period then ended. respectively. Furthermore, we did not review the condensed interim financial information of certain companies accounted for at equity, the investment in which, at equity, amounted to approximately NIS 240,732 thousand as of March 31 2021, and the Company's share of their earnings amounted to NIS 9,453 thousand for the three months period then ended. The condensed interim financial information of those companies was reviewed by other auditors, whose review reports have been furnished to us, and our conclusion, insofar as it relates to financial information in respect of those companies, is based on the review reports of the other auditors.

Scope of Review

We conducted our review in accordance with Review Standard (Israel) 2410 of the Institute of Certified Public Accountants in Israel, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit performed pursuant to Israeli GAAP and, as a result, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review and the review reports of other auditors, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34 and in accordance with the disclosure requirements prescribed by the Commissioner of the Capital Market, Insurance and Savings, pursuant to the Financial Services Supervision Law (Insurance), 1981.

In addition to that which is stated in the previous paragraph, based on our review and the review reports of other auditors, nothing has come to our attention that causes us to believe that the abovementioned financial information does not comply, in all material respects, with the disclosure provisions of Chapter D of the Israel Securities Regulations (Periodic and Immediate Reports), 1970, insofar as these regulations apply to a corporation consolidating insurance companies.

Emphasis of matter

Without qualifying the above conclusion, we draw attention to Note 7 to the financial statements regarding exposure to contingent liabilities.

Tel Aviv, Kost Forer Gabbay & Kasierer May 26, 2020 Certified Public Accountants

Condensed Consolidated Interim Statements of Financial Position

As of

Mar. 31 2021
Mar. 31 2020

Dec. 31 2020

Unaudited Audited

In NIS thousand

Assets

Intangible assets 2,298,619 1,796,041 2,016,668

Deferred tax assets 57,245 28,870 55,104

Deferred acquisition costs 1,819,463 1,768,459 1,712,630

Property, plant & equipment 916,751 774,361 861,865

Investments in associates 771,110 735,731 756,869

Investment property in respect of yield-dependent contracts 1,853,064 1,631,541 1,839,576

Investment property - other 2,721,934 2,613,378 2,728,710

Reinsurance assets 2,650,209 2,475,063 2,531,659

Credit for purchase of securities 452,000 264,000 403,000

Current tax assets 26,897 161,286 6,422

Receivables and debit balances 552,302 625,312 529,792

Premiums collectible 739,902 823,372 651,825

Held-for-sale assets of disposal group (please see Note 4) 44,473 - -

Financial investments in respect of yield-dependent contracts 69,130,062 55,157,099 65,570,447

Financial investments for holders of deposit certificates and structured

bonds 231,000 275,000 239,000

Other financial investments:

Marketable debt assets 7,491,305 7,521,334 8,095,468

Non-marketable debt assets 14,333,205 13,505,327 14,007,189

Shares 2,117,598 1,435,831 1,899,993

Other 3,535,158 2,484,002 3,247,469

Total other financial investments 27,477,266 24,946,494 27,250,119

Cash and cash equivalents in respect of yield-dependent contracts 11,162,653 7,512,737 10,464,216

Other cash and cash equivalents 2,249,354 1,703,259 1,545,903

Total assets 125,154,304 103,292,003 119,163,805

Total assets in respect of yield-dependent contracts 82,335,416 64,491,785 78,034,084

Condensed Consolidated Interim Statements of Financial Position

As of

Mar. 31 2021 Dec. 31 2020

Unaudited Audited

In NIS thousand

Equity

Share capital 309,961 309,951 309,951

Premium and capital reserves in respect of shares 837,324 826,991 833,592

Treasury shares (26,411) - (26,411)

Capital reserves 955,191 316,490 913,036

Retained earnings 5,875,712 4,602,739 5,939,754

Total equity attributed to the Company's shareholders 7,951,777 6,056,171 7,969,922

Non-controlling interests 117,862 119,801 111,908

Total equity 8,069,639 6,175,972 8,081,830

Liabilities

Liabilities in respect of insurance contracts and non-yield-dependent
investment contracts 23,904,976 23,311,893 23,469,887

Liabilities in respect of insurance contracts and yield-dependent
investment contracts 81,296,403 63,930,828 76,856,913

Liabilities in respect of deferred taxes 934,411 395,785 897,804

Liability for employee benefits, net 76,656 56,769 59,362

Liability in respect of current taxes 70,604 20,753 63,444

Payables and credit balances 2,815,177 2,230,608 2,452,851

Held-for-sale liabilities of disposal group (please see Note 4) 10,458 - -

Liabilities in respect of structured products 228,000 272,000 238,000

Financial liabilities 7,747,980 6,897,395 7,043,714

Total liabilities 117,084,665 97,116,031 111,081,975

Total equity and liabilities 125,154,304 103,292,003 119,163,805

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements.

Executive Vice President, CFO Chief Executive Officer Chairman of the Board of

Eli Schwartz Eyal Ben Simon Benjamin Gabbay

Directors

Date of approval of the financial statements - May 26 2021

Condensed Consolidated Interim Statements of Comprehensive Income

For the three months ended
March 31 For the year
ended
December 31

2021
2020

Unaudited 2020
Audited

In NIS thousand

Premiums earned, gross 2,618,322 2,719,613 10,382,652

Premiums earned by reinsurers 310,944 346,381 1,328,978

Premiums earned - retention 2,307,378 2,373,232 9,053,674

Gains (losses) on investments, net and finance income 3,854,595 (8,153,568) 5,479,706

Income from management fees 486,873 274,397 1,357,189

Income from fees and commissions 167,627 140,371 556,051

Income from other financial services 41,000 46,000 159,000

Other income 12,906 25,952 131,846

Total income 6,870,379 (5,293,616) 16,737,466

Payments and change in liabilities in respect of insurance
contracts and investment contracts, gross 5,805,929 (5,583,282) 12,529,564

Reinsurers' share in payments and in changes in liabilities in
respect of insurance contracts 203,863 256,732 826,690

Payments and change in liabilities in respect of insurance
contracts and investment contracts - retention 5,602,066 (5,840,014) 11,702,874

Fees and commissions, marketing expenses and other purchase
expenses 380,423 458,538 1,750,103

General and administrative expenses 363,731 323,975 1,360,028

Other expenses 10,745 832 54,885

Finance expenses 41,545 26,360 146,509

Total expenses 6,398,510 (5,030,309) 15,014,399

Share in profits of equity-accounted investees 16,027 15,304 39,697

Profit (loss) before income taxes 487,896 (248,003) 1,762,764

Taxes on income 161,769 (94,798) 553,829

Profit (loss) 326,127 (153,205) 1,208,935

Attributed to:

Company's shareholders 315,404 (166,067) 1,169,023

Non-controlling interests 10,723 12,862 39,912

Profit (loss) 326,127 (153,205) 1,208,935

Earnings (loss) per share attributed to the Company's
shareholders (in NIS):

Basic earnings (loss) per share

Earnings (loss) per ordinary share of NIS 1 par value (NIS) 1.24 (0.65) 4.57

Diluted earnings (loss) per share

Earnings (loss) per ordinary share of NIS 1 par value (NIS) 1.23 (0.65) 4.57

Condensed Consolidated Interim Statements of Comprehensive Income

For the three months For the
year ended
December

ended March 31 31

2021 2020 2020

Unaudited Audited

Profit (loss) for the period 326,127 In NIS thousand
(153,205) 1,208,935

Other comprehensive income (loss):

Amounts that will be or that have been reclassified to profit or loss

when specific conditions are met

Net change in fair value of financial assets classified as available for sale,

carried to capital reserves 253,176 (806,319) 455,703

Net change in fair value of financial assets classified as available for sale,

carried to the income statement (230,110) (86,071) (516,761)

Gain on impairment of financial assets classified as available for sale, carried

to the income statement 35,908 260,323 324,220

Company's share in other comprehensive income (loss), net, of equity

accounted companies 1,057 5,185 (3,412)

Tax effect (19,529) 215,048 (89,697)

Total components of net other comprehensive income (loss) subsequently

reclassified to profit or loss 40,502 (411,834) 170,053

Amounts that shall not be subsequently reclassified to profit or

loss

Revaluation of property, plant and equipment - 1,621 17,314

Actuarial gain (loss) in respect of defined benefit plans - - 497

Tax effect - (373) (4,190)

Total components of other comprehensive income, net, that shall not be

subsequently reclassified to profit or loss - 1,248 13,621

Total other comprehensive income (loss), net 40,502 (410,586) 183,674

Total comprehensive income (loss) for the period 366,629 (563,791) 1,392,609

Attributed to:

Company's shareholders 355,906 (576,653) 1,352,697

Non-controlling interests 10,723 12,862 39,912

Comprehensive income (loss) 366,629 (563,791) 1,392,609

Condensed Consolidated Interim Statements of Changes in Equity

Attributed to Company's shareholders

Share
capital Premium
and
capital
reserves
in
respect
of shares Treasury
shares Retained
earnings Capital
reserve
from
transacti
ons with
non
control
ling
interests Capital
reserve from
transaction
with
controlling
shareholder -
bonus Capital
reserve
from
share
based
pay-ment
In NIS thousand Revalu
ation
reserve Principal
from
trans
lation
diffe
rences Capital
reserve
in respect
of
available
for-sale
assets Total Non
controlling
interests Total
equity

Balance as of January
1 2021 (audited) 309,951 833,592 (26,411) 5,939,754 (43,622) 11,000 44,943 114,614 (23,338) 809,439 7,969,922 111,908 8,081,830

Net income - - - 315,404 - - - - - - 315,404 10,723 326,127

Other comprehensive
income - - - - - - - - 1,057 39,445 40,502 - 40,502

Total comprehensive

income - - - 315,404 - - - - 1,057 39,445 355,906 10,723 366,629

Share-based payment
Dividend paid to non 3,635 - - 2,314 - - - 5,949 - 5,949

controlling interests
Commencement of - - - - - - - - - - - (5,177) (5,177)

consolidation
Exercise of employee - - - - - - - - - - - 408 408

options
Transfer from
revaluation reserve in
respect of revaluation
of property, plant and 10 97 - - - - (107) - - - - - -

equipment, at the

depreciation amount
Dividend -
- -
- -
- 554
(380,000) -
- -
- -
- (554)
- -
- -
- -
(380,000) -
- -
(380,000)

Balance as of March 5,875,71

31 2021 (unaudited) 309,961 837,324 (26,411) 2 (43,622) 11,000 47,150 114,060 (22,281) 848,884 7,951,777 117,862 8,069,639

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

Condensed Consolidated Interim Statements of Changes in Equity

Attributed to Company's shareholders

Share
capital Premium
and
capital
reserves
in
respect
of shares Retained
earnings Capital
reserve
from
transa
ctions with
non
controlling
interests Capital
reserve
from
transaction
with
controlling
share
holder -
bonus Capital
reserve
from
share
based
pay
ment Reva
luation
reserve
In NIS thousand Principal
from
trans
lation
diffe
rences Capital
reserve in
respect of
available
for-sale
assets Total Non
contro
lling
interests Total
equity

Balance as of January 1 2020
(audited) 309,951 830,437 4,768,261 (43,622) 11,000 40,047 103,463 (19,926) 635,974 6,635,585 106,939 6,742,524

Net income - - (166,067) - - - - - - (166,067) 12,862 (153,205)

Other comprehensive income
(loss) - - - - - - 1,248 5,185 (417,019) (410,586) - (410,586)

Total comprehensive income
(loss) - - (166,067) - - - 1,248 5,185 (417,019) (576,653) 12,862 (563,791)

Share-based payment - (3,446) - - - 685 - - - (2,761) - (2,761)

Transfer from revaluation
reserve in respect of
revaluation of property, plant
and equipment, at the
depreciation amount - - 545 - - - (545) - - - - -

Balance as of March 31 2020
(unaudited) 309,951 826,991 4,602,739 (43,622) 11,000 40,732 104,166 (14,741) 218,955 6,056,171 119,801 6,175,972

Condensed Consolidated Interim Statements of Changes in Equity

Attributed to Company's shareholders

Share
capital Premium
and
capital
reserves
in
respect
of shares Treasury
shares Retained
earnings Capital
reserve
from
trans
actions
with
non
control
ling
interests Capital
reserve
from
transactio
ns with
controlling
share
holders Capital
reserve
from
share
based
payment
In NIS thousand Reva
luation
reserve Principal
from
translati
on diffe
rences Capital
reserve in
respect of
available
for-sale
assets Total Non
control
ling
interests Total
equity

Balance as of

January 1 2020

(audited)
Net income 309,951
- 830,437
- -
- 4,768,261
1,169,023 (43,622)
- 11,000
- 40,047
- 103,463
- (19,926)
- 635,974
- 6,635,585
1,169,023 106,939
39,912 6,742,524
1,208,935

Other comprehensive

income (loss) - - - 290 - - - 13,331 (3,412) 173,465 183,674 - 183,674

Total comprehensive

income (loss) - - - 1,169,313 - - - 13,331 (3,412) 173,465 1,352,697 39,912 1,392,609

Share-based

payment - 3,155 - - - - 4,896 - - - 8,051 - 8,051

Dividend paid to

non-controlling

interests - - - - - - - - - - - (31,971) (31,971)

Acquisition of

treasury shares - - (26,411) - - - - - - - (26,411) - (26,411)

Acquisition of non
controlling interests

Commencement of - - - - - - - - - (3,000) (3,000)

consolidation - - - - - - - - - - - 28 28

Transfer from

revaluation reserve

in respect of

revaluation of

property, plant and

equipment, at the

depreciation amount - - - 2,180 - - - (2,180) - - - - -

Balance as of

December 31 2020
(audited) 309,951 833,592 (26,411) 5,939,754 (43,622) 11,000 44,943 114,614 (23,338) 809,439 7,969,922 111,908 8,081,830

For the three months ended March 31 For the year
ended
December 31

2021 2020 2020

Unaudited Audited

Appendix In NIS thousand

Cash flows provided by (used in)

operating activities
Profit (loss) for the period
Adjustments required to present 326,127 (153,205) 1,208,935

cash flows from operating activities (a) 1,056,086 1,603,179 3,562,529

Net cash provided by operating
activities 1,382,213 1,449,974 4,771,464

Cash flows from investing activities
Purchase of property, plant and
equipment
Proceeds from disposal of property, (12,389) (8,205) (137,587)

plant and equipment
Investment in associates -
(10,632) -
(20,719) 1,158
(44,845)

Dividend from associates
Acquisition of companies 11,918 4,842 13,089

consolidated for the first time
Acquisition of minority interest in a (b) (337,071) (36,573) (86,665)

consolidated company
Repayment (receipt) of a loan from - - (3,000)

an associate
Proceeds from disposal of 90 (240) (8,173)

investment in associate
Acquisition and capitalization of - 18,445 19,746

intangible assets costs (51,382) (53,730) (233,430)

Net cash used in investing activities
Cash flows from financing activities (399,466) (96,180) (479,707)

Acquisition of Company shares
Assumption of financial liabilities -
117,000 -
- (26,411)
72,097

Repayment of financial liabilities (70,699) (146,291) (572,121)

Repayment of lease liability principal (12,505) (9,655) (41,646)

Issuance of financial liability
Dividend to non-controlling interests 348,457 217,511 585,433

in a consolidated company
Repayment of contingent liability in
respect of a put option to non (5,177) - (31,971)

controlling interests (5,355) - -

Liability for REPO 47,420 456,493 388,837

Net cash from financing activities
Increase in cash and cash 419,141 518,058 374,218

equivalents
Balance of cash and cash 1,401,888 1,871,852 4,665,975

equivalents at beginning of period
Balance of cash and cash (c) 12,010,119 7,344,144 7,344,144

equivalents at end of period (c) 13,412,007 9,215,996 12,010,119

For the three months
ended March 31 For the year
ended
December
31

2021 2020 2020

Unaudited Audited

In NIS thousand

Adjustments required to present cash flows from

(a) operating activities:

Items not involving cash flows

Net (gains) losses on financial investments in respect of

insurance contracts and yield-dependent investment

contract (3,433,370) 7,830,247 (4,356,557)

Change in fair value of investment property in respect of

yield-dependent contracts - 12,998 (25,857)

Net (gains) losses on other financial investments
Marketable debt assets (113,589) 29,555 (166,427)

Non-marketable debt assets (196,537) (116,265) (581,800)

Shares (123,408) 262,429 24,735

Other 78,203 175,127 (228,807)

Depreciation and amortization 76,835 71,703 300,140

Loss (gain) on disposal of property, plant and equipment 5 6 -

Change in fair value of investment property - 7,701 (53,004)

Change in provision for impairment of property, plant

and equipment (2,229) (11,616) (7,957)

Gain from remeasurement of investment in an investee

consolidated for the first time (483) - (67,268)

Change in financial liabilities 240,427 625,848 853,786

Income tax expenses 161,769 (94,798) 553,829

Company's share in the results of associates, net (16,027) (15,304) (39,697)

Payroll expenses in respect of share-based payment 2,314 685 4,896

Changes in other balance sheet line items, net:

Change in liabilities in respect of non-yield-dependent

insurance contracts 435,089 119,703 277,697

Change in liabilities in respect of yield-dependent

contracts 4,439,490 (7,160,049) 5,766,036

Change in liabilities for bonds, ETFs (10,000) (10,000) (44,000)

Change in financial investments for holders of ETFs,

certificates of deposit 8,000 9,000 45,000

Change in deferred acquisition costs (87,786) (34,912) 20,917

Change in reinsurance assets (118,550) (127,342) (183,938)

Change in liabilities for employee benefits, net 12,263 4,216 7,306

Change in accounts receivable, debit balances and

collectible premiums (111,143) (245,001) 28,325

Change in payables and credit balances (44,969) 97,411 306,867

Change in credit for purchase of securities (49,000) 43,000 (96,000)

Revaluation of loans granted to associates (1,098) (528) (1,938)

Financial investments and investment property in respect

of insurance contracts and yield-dependent investment

contracts:
Acquisition of real estate properties (13,488) (90,474) (259,654)

Acquisitions of financial investments, net (126,245) 1,317,569 3,091,025

Financial investments and other investment property:

Acquisitions of financial investments, net 219,579 (1,120,881) (1,264,985)

Acquisition of real estate properties (13,302) (73,723) (128,350)

Cash paid and received during the period for:

Taxes paid (335,118) (45,075) (354,687)

Taxes received 178,454 141,949 142,896

Total cash flows provided by operating activities 1,056,086 1,603,179 3,562,529

For the three months
ended March 31 For the
year ended
December
31

2021 2020 2020

Unaudited Audited

In NIS thousand

(b) Acquisition of companies consolidated for the first time
Assets and liabilities of the consolidated companies as of
acquisition date:

Working capital (excluding cash and cash equivalents)
Deferred acquisition costs 19,959
(19,047) (3,000)
- (4,288)
-

Other financial investments (32,421) - -

Property, plant and equipment, net (35,863) - (10,710)

Goodwill arising from acquisition (138,653) (22,000) (154,549)

Intangible assets (188,317) (11,573) (83,796)

Deferred taxes 9,136 - 22,012

Minority interests 408 - 28

Accounts payable in respect of acquisition of consolidated

companies 271 - -

Disposal of investment in an associate 2,777 - 78,677

Financial liability 34,161 - 12,309

Loan from parent company - - 46,911

Liability for payment in respect of acquisition of an investee 5,487 - 6,741

Liabilities for employee benefits 5,031 - -

(337,071) (36,573) (86,665)

(c) Cash and cash equivalents

Balance of cash and cash equivalents at beginning of period:

Other cash and cash equivalents 1,545,903 1,731,709 1,731,709

Cash and cash equivalents in respect of yield-dependent

contracts 10,464,216 5,612,435 5,612,435

12,010,119 7,344,144 7,344,144

Balance of cash and cash equivalents at end of period:

Other cash and cash equivalents 2,249,354 1,703,259 1,545,903

Cash and cash equivalents in respect of yield-dependent

contracts 11,162,653 7,512,737 10,464,216

13,412,007 9,215,996 12,010,119

(d) Material non-cash activities

Payable dividend (380,000) - -

Recognition of right-of-use asset against a lease liability (5,676) (3,531) (8,383)

Appreciation (impairment) of available-for-sale assets against

a capital reserve 58,974 (417,019) 263,162

Appreciation (impairment) of deferred taxes in respect of

available for sale assets against a capital reserve (19,529) (215,048) (89,697)

(e) Breakdown of amounts included in operating activities

Interest paid 716 4,343 1,611

Interest received 58,582 65,264 608,612

Dividend received 17,687 5,301 32,215

NOTE 1 - GENERAL

A. The Phoenix Holdings Ltd. (hereinafter - the "Company") is an Israeli resident company incorporated in Israel, whose official address is 53 Derech Hashalom St., Givatayim, Israel. These financial statements were prepared in condensed format as of March 31 2021 and for the three-month period then ended (hereinafter - the "Condensed Consolidated Interim Financial Statements"). These financial statements should be read in conjunction with the Company's annual financial statements as of December 31 2020 and for the year then ended and the accompanying notes (hereinafter - the "Consolidated Annual Financial Statements").

B. Definitions

The Company - The Phoenix Holdings Ltd.

The Phoenix
Insurance - The Phoenix Insurance Company Ltd., a wholly-owned subsidiary.

The Phoenix
Investments - The Phoenix Investments and Finances Ltd., a wholly-owned subsidiary of
the Company.

Excellence - Excellence Investments Ltd., a subsidiary of The Phoenix Investments.

The Phoenix
Excellence
Pension and
Provident Funds
Ltd. - The Phoenix Excellence Pension and Provident Funds Ltd., a wholly-owned
subsidiary of The Phoenix Insurance (formerly - Excellence Gemel Ltd.).

Halman Aldubi - Halman Aldubi Investment House Ltd. is a wholly-owned subsidiary of the
Company (for further details, please see Note 4).

Halman Aldubi
Provident Halman Aldubi Provident and Pension Funds Ltd. is a wholly-owned
subsidiary of Halman Aldubi.

The Phoenix
Capital Raising - The Phoenix Capital Raising (2009) Ltd., a wholly-owned subsidiary of The
Phoenix Insurance.

Belenus Lux
S.a.r.l - The controlling shareholder, held indirectly by Centerbridge Partners LP and
Gallatin Point Capital LLC (hereinafter - the "Funds"). The said control is
jointly held with Leolin Lux S.a.r.l, a sister company of Belenus.

Ad 120 - Ad 120 Residence Centers for Senior Citizens Ltd. is a wholly-owned
subsidiary of The Phoenix Insurance.

The Phoenix
Agencies - The Phoenix Insurance Agency 1989 Ltd. - a company wholly-owned by the
Company.

C. Distribution of The Phoenix Excellence Pension and Provident Funds Ltd.'s shares

On December 30 2019, the Board of Directors of The Phoenix Insurance Ltd. approved the distribution of the shares of The Phoenix Excellence Pension and Provident Funds Ltd., constituting approximately 100% of the issued and paid-up share capital of The Phoenix Excellence as dividend in kind to the Company. The actual distribution of the dividend is subject to approval by the Israel Tax Authority and the Capital Market, Insurance and Savings Authority. As of the report publication date, the Capital Market, Insurance and Savings Authority has given approval to execute the distribution, but no such approval has been received as yet from the Israel Tax Authority. For further details, please see the immediate report of the Company dated December 31 2019 (Ref. No. 2019-01-126166).

NOTE 1 – GENERAL (cont.)

D. Acquisition of Halman Aldubi Investment House Ltd.

On December 7 2020, the Company entered into a merger agreement with Halman Aldubi Investment House Ltd. (hereinafter: "Halman Aldubi). Under the merger agreement, a reverse triple merger was carried out, with Halman Aldubi becoming a privately-held company wholly owned by the Company. The consideration of the transaction is approximately NIS 275 million. On February 28 2021, upon meeting the conditions precedent, the merger was completed. For further details regarding the transaction, please see Note 4, "Business Combinations".

E. Examining the possibility of selling Ad 120

In January 2021, The Phoenix Insurance's Board of Directors decided to consider the possibility of selling its control stake, and up to 100%, of Ad 120, as part of the execution of the Company's multi-year strategic plan. As of the report date, the Company is acting to implement the aforesaid with the assistance of an investment bank with which the Company has entered into an agreement in this matter. As of the report publication date, The Phoenix Insurance had received several unbinding initial offers from potential acquirers. The Phoenix Insurance is considering the various offers and alternatives for executing the transaction. Accordingly, as of the report date, The Phoenix Insurance has created a tax reserve in the amount of approximately NIS 46 million in respect of its intended sale of Ad 120; however, at this stage, there is no certainty that the sale will indeed materialize and what its terms and conditions will be. For further details, please see Note 7 to the Annual Report and the immediate report dated January 28 2021 (Ref. No.: 2021-01-011200).

F. Gama - IPO and assuming control

In May 2021, Gama Management and Clearing Ltd. (hereinafter - "Gama") published a draft prospectus for an initial public offering and sale offer (hereinafter - the "Draft Prospectus"). As of the report publication date, the Company indirectly holds, through The Phoenix Investments and Finances Ltd., 49% of Gama's issued and paid-up share capital. According to the draft prospectus, the company intends, concurrently with the execution of the IPO, in accordance with the IPO prospectus, to acquire, through The Phoenix Investments, such that following the IPO anf full dilution, it will hold approximately 60% of Gama's issued and paid up share capital and voting rights, fully diluted, and shall be the controlling shareholder in Gama. To the extent that the IPO will indeed go forward and the Company will gain a holding stake of more than 50% in Gama, the Company is expected to record a one-off capital gain due to gaining control, depending on the IPO proceeds. As of this date, the IPO is scheduled to take place during June 2021; however, it shall be clarified that there is no certainty that the IPO will indeed take place and what its terms and conditions will be.

G. Offer to purchase all shares of Psagot Mutual Funds Ltd.

On May 9 2021, KSM Sal Certificates Holdings Ltd. - a company indirectly controlled by the Company, jointly with YD More Investments Ltd. - filed a binding offer to acquire all shares of Psagot Mutual Funds Ltd., Psagot Securities Ltd. and Psagot Compass Investments Ltd. (hereinafter, collectively - the "Acquired Companies") by Psagot Investment House Ltd. (hereinafter - "Psagot"). The offer reflected an enterprise value of approximately NIS 420 million for the Acquired Companies, on the basis of zero debt and zero cash as of December 31 2020. The offer expired on May 10 2021, in accordance with the terms and conditions of the offer.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

A. Preparation format of the consolidated interim financial statements

The Consolidated Interim Financial Statements have been prepared in accordance with generally accepted accounting principles for the preparation of interim financial statements as prescribed by IAS 34, "Interim Financial Reporting", as well as in accordance with the disclosure requirements set by the Commissioner of the Capital Market, Insurance and Savings in accordance with the Financial Services Supervision Law (Insurance), 1981. In addition, the financial statements were prepared in accordance with the disclosure provisions in Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970, insofar as these regulations apply to a corporation consolidating an insurance company.

In preparing the condensed financial statements in accordance with International Financial Reporting Standards (IFRS), the Company is required to exercise discretion in assessments, estimates and assumptions that affect the implementation of the policy and the amounts of assets and liabilities, income and expenses. It is clarified that the actual results may differ from those estimates. Management's discretion in applying the Group's accounting policies and the key assumptions used in assessments involving uncertainty is consistent with that which is applied in the preparation of the annual financial statements. For further information regarding changes in critical estimates and assumptions used to calculate the insurance reserves, please see Note 8.A.

The accounting policies applied in the preparation of the interim consolidated financial statements are consistent with those implemented in the preparation of the Consolidated Annual Financial Statements, with the exception of new standards that entered into force on January 1 2021, as detailed below:

B. First-time application of amendment to existing accounting standards

Amendments to IFRS 4, IFRS 7, IFRS 9, IFRS 16 and IAS 39 due to the IBOR reform

In August 2020, the IASB issued amendments to IFRS 9, "Financial Instruments", IFRS 7, "Financial Instruments: Disclosures", IAS 39, "Financial Instruments: Recognition and Measurement", IFRS 4, "Insurance Contracts" and IFRS 16, "Leases" (Hereinafter - the "Amendments").

The amendments provide practical expedients that address the effects the replacement of Interbank Offered Rates ((IBORs) by Risk Free Interest Rates (RFRs) on accounting treatment in the financial statements.

According to one of the practical reliefs, the Company will account for contractual amendments or amendments to cash flows resulting directly from the implementation of the reform similarly to the accounting treatment for changes in variable interest rates. In other words, companies are required to recognize the changes in interest rates by adjusting the effective interest rate without changing the book value of the financial instrument. The use of this practical expedient depends on the fact that the transition from IBOR to RFR takes place on the basis of equal economic conditions.

In addition, the amendments allow the changes required by the IBOR reform to be made for hedging designation and documentation purposes without causing hedging relationships to discontinue when certain terms and conditions are met. The amendments also provided temporary practical expedient for the application of hedge accounting relating to the identification of the hedged risk as 'separately identifiable'.

The amendments added disclosure requirements regarding the effect of the expected reform on the Company's financial statements, including reference to the manner in which the Company manages the implementation of the interest rate reform, the risks to which it is exposed as a result of the expected reform and quantitative disclosures regarding financial instruments in IBOR interest rates that are expected to change.

At this stage - since the contractural amendments have yet to be agreed upon - the Company is unable to estimate the accounting implications, if any, of the transition from IBOR interest rates to RFR interest rates on financial instrument contracts that are expected to be in place on the transition date, including the effects of the above Amendments.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (cont.)

C. Disclosure of the new IFRSs in the period prior to their application

Amendment to IAS 8, "Accounting Policies, Changes in Accounting Estimates and Errors"

In February 2021, the IASB issued an amendment to IAS 8: "Accounting Policies, Changes in Accounting Estimates and Errors" (hereinafter - the "Amendment). The purpose of the amendment is to introduce a new definition of the term "accounting estimates".

Accounting estimates are defined as "financial amounts in the financial statements subject to measurement uncertainty." The Amendment clarifies what changes in accounting estimates are and how they differ from changes in accounting policies and corrections of errors.

The Amendment will be applied prospectively to annual periods beginning on January 1 2023 and shall apply to changes in accounting policies and accounting estimates that occur at the beginning of that period or thereafter. Early application is allowed.

D. Changing the designation of Ad 120 from the health segment to the life insurance and long-term savings segment

Beginning in Q2 2020 - in light of the publication of the LAT circular regarding the allocation of assets other than at fair value when performing the liability adequacy test (LAT) - the Company allocated the results of Ad 120 to the life insurance and long-term savings and health insurance segment as well. The following table reconciles the abovementioned change, under the assumption that the Company would have designated Ad 120 to the life insurance and long-term savings and health segment:

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (cont.)

For the three
months ended
March 31 For the year ended
December 31

Life insurance and long-term savings segment 2020

Unaudited Audited

In NIS thousand

Premiums earned, gross 1,259,058 4,765,553

Premiums earned by reinsurers 23,634 99,195

Premiums earned - retention 1,235,424 4,666,358

Investment income, net and finance income (7,191,455) 4,641,250

Income from management fees 202,822 1,106,546

Income from fees and commissions 9,334 39,119

Other income 11,263 22,936

Total income (5,732,613) 10,476,209

Payments and change in liabilities in respect of insurance
contracts and investment contracts, gross (5,879,613) 8,517,055

Reinsurers' share in payments and in changes in liabilities in
respect of insurance contracts 1,655 49,450

Payments and change in liabilities in respect of insurance
contracts and investment contracts - retention (5,881,268) 8,467,605

Fees and commissions and other purchase expenses 182,050 728,085

General and administrative expenses 130,303 548,029

Other expenses (6,814) 26,303

Finance expenses (8,988) 2,185

Total expenses (5,584,717) 9,772,207

Company's share in the net results of investees 6,979 12,006

Net income (loss) before taxes on income (140,916) 716,008

Other comprehensive income (loss) before taxes on
income (99,340) 6,732

Total comprehensive income (loss) before taxes on
income (240,256) 722,740

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (cont.)

D. Redesignation of Ad 120 from the "other" segment to the life insurance and long-term savings segment and health insurance segment (cont.)

For the three
months ended
March 31 For the year ended
December 31

2020

Health insurance segment Unaudited Audited

In NIS thousand

Premiums earned, gross 763,861 2,781,698

Premiums earned by reinsurers 95,200 286,671

Premiums earned - retention 668,661 2,495,027

Investment income, net and finance income (665,410) 473,843

Income from fees and commissions 9,468 44,170

Other income 7,508 12,736

Total income 20,228 3,025,776

Payments and change in liabilities in respect of insurance
contracts and investment contracts, gross (195,410) 2,371,630

Reinsurers' share in payments and in changes in liabilities in
respect of insurance contracts 88,141 234,439

Payments and change in liabilities in respect of insurance
contracts and investment contracts - retention (283,551) 2,137,191

Fees and commissions and other purchase expenses 161,189 497,769

General and administrative expenses 40,223 157,523

Finance expenses (808) (1,112)

Total expenses (82,947) 2,791,371

Company's share in the net results of investees - 2,055

Profit before taxes on income 103,174 236,460

Other comprehensive loss before taxes on income (68,999) (33,485)

Total comprehensive income before taxes on income 34,175 202,975

E. Details of the change rates in the Consumer Price Index and US dollar representative exchange rate

Consumer price index Representative
exchange rate of the
US dollar

Known CPI In lieu CPI

% % %

For the three months ended on:

March 31 2021 0.1 0.8 3.7

March 31 2020 (0.5) (0.1) 3.1

For the year ended December 31 2020 (0.6) (0.7) (7)

Notes to the Condensed Consolidated Interim Financial Statements as of March 31 2021

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (cont.)

The Company operates in the following operating segments:

1. The life insurance and long-term savings segment

The life insurance and long-term savings segment includes the following subsegments: life insurance, related coverages and pension and provident funds management. The segment includes long-term savings (under various categories of insurance policies, pension funds and provident funds), as well insurance coverages in respect of various risks such as: death, disability, permanent health insurance, and more. In accordance with the Commissioner's directives, the long-term savings segment is broken down into life insurance, pension funds and provident funds. For information regarding the allocation of operating results of Ad 120 following the application of the circular regarding the procedure for allocating non-marketable assets, please see Notes 2.D above.

2. Health insurance segment

The health insurance segment includes the Group's health insurance activity. The segment includes longterm care, medical expenses, surgery and transplants, dental, travel and foreign workers insurance and more.

For information regarding the allocation of operating results of Ad 120 following the application of the circular regarding the procedure for allocating non-marketable assets, please see Notes 2.D above.

3. Property and casualty insurance segment

The property and casualty insurance segment includes the liability and property subsegments. In accordance with the Commissioner's directives, the property and casualty insurance segment is broken down into compulsory motor insurance, motor property, other property and other liability subsegments.

Compulsory motor insurance subsegment

The compulsory motor insurance subsegment focuses on coverage, the purchase of which by the vehicle owner or driver is mandatory, in respect of bodily injury caused as a result of the use of a motor vehicle (to the driver, passengers, or pedestrians).

Motor property subsegment

The motor property subsegment focuses on coverage against property damage to the policyholder's vehicle and third-party property damage caused by the insured vehicle.

Other liability subsegments

The liability subsegments provide coverage in respect of the policyholder's liability for any thirdparty damage he/she may cause. These subsegments include: third-party liability, employers' liability, professional liability and product liability.

Property and other subsegments

Property subsegments other than motor and liability as well as other insurance subsegments.

4. Financial services segment

The financial services segment includes Excellence's results. The segment includes investment management activity, including mutual funds, ETFs, brokerage services, underwriting services, market making in various securities and other services.

In addition, the results of this segment include the operations of The Phoenix's investment fund management.

5. Insurance agencies segment

The insurance agencies segment includes the activity of the pension arrangement agencies and other consolidated insurance agencies.

6. Other segment

This segment includes operating segments that do not meet the quantitative threshold for reporting.

7. The activity is not attributed to operating segments

This activity includes part of the Group's HQ function that is not attributed to the operating segments and holding assets and liabilities against the Company's share capital in accordance with the Capital Regulations.

A. Reportable segment

For the three-month period ended March 31 2021

Life insurance
and long
term savings
(a) Health (b) Property
and casualty
insurance
(c) Financial
services Insurance
agencies Other Not
attributed
to
operating
segments Adjustments
and offsets Total

Unaudited

In NIS thousand

Premiums earned, gross 1,261,813 660,630 695,879 - - - - - 2,618,322

Premiums earned by reinsurers 28,018 51,711 231,215 - - - - - 310,944

Premiums earned -
retention 1,233,795 608,919 464,664 - - - - - 2,307,378

Investment income, net and finance income 3,389,444 326,165 94,187 56 4,395 801 43,928 (4,381) 3,854,595

Income from management fees 422,583 - - 64,042 228 12,372 762 (13,114) 486,873

Income from fees and commissions (d) 8,569 12,355 54,179 - 125,314 - - (32,790) 167,627

Income from financial services - - - 41,000 - - - - 41,000

Other income 5,492 338 - 1,000 4,302 327 1,652 (205) 12,906

Total income 5,059,883 947,777 613,030 106,098 134,239 13,500 46,342 (50,490) 6,870,379

Increase in insurance liabilities and payments in respect of
insurance contracts 4,497,410 844,488 464,031 - - - - - 5,805,929

Reinsurers' share in payments and in changes in liabilities in 10,751 54,693 138,419 - - - - - 203,863

respect of insurance contracts

Payments and change in liabilities in respect of insurance

contracts and investment contracts -
retention 4,486,659 789,795 325,612 - - - - - 5,602,066

Fees and commissions and other purchase expenses 171,055 100,930 127,206 11,000 - - - (29,768) 380,423

General and administrative expenses 144,227 37,738 31,255 61,468 80,189 13,711 9,869 (14,726) 363,731

Other expenses 4,325 - - 3,000 3,231 - 304 (115) 10,745

Finance expenses 3,928 51 5,504 1,000 136 80 34,547 (3,701) 41,545

Total expenses 4,810,194 928,514 489,577 76,468 83,556 13,791 44,720 (48,310) 6,398,510

Company's share in the net results of investees 10,521 615 (1,167) 830 1,587 3,641 - - 16,027

Profit before taxes on income 260,210 19,878 122,286 30,460 52,270 3,350 1,622 (2,180) 487,896

Other comprehensive income (loss) before taxes on

income 30,043 3,108 55,236 - - 587 (28,943) - 60,031

Total comprehensive income (loss) before taxes on

income 290,253 22,986 177,522 30,460 52,270 3,937 (27,321) (2,180) 547,927

As of March 31 2021

Unaudited

In NIS thousand

Liabilities, gross in respect of insurance contracts and yield
dependent investment contracts 75,600,323 5,696,080 - - - - - - 81,296,403

Liabilities, gross in respect of insurance contracts and non
yield-dependent investment contracts 13,069,298 4,372,914 6,462,764 - - - - - 23,904,976

(a) For additional data regarding the life insurance and long-term savings subsegments, please see Section B below.

(b) For additional data regarding the health insurance subsegments, please see Section C below.

(c) For additional data regarding the property and casualty insurance subsegments, please see Section D below.

(d) Arises from commission income received from agencies owned by the Group, mainly from activities in the life insurance and long-term savings segment.

A. Reportable Segment (cont.)

For the three-month period ended March 31 2020

Life
insurance
and long
term savings Health Property
and
casualty
insurance Financial Insurance Not
attributed
to
operating Adjust
ments and

(a) (b) (c) services agencies Other segments offsets Total

Unaudited

In NIS thousand

Premiums earned, gross 1,259,058 763,861 696,694 - - - - - 2,719,613

Premiums earned by reinsurers 23,634 95,200 227,547 - - - - - 346,381

Premiums earned -
retention 1,235,424 668,661 469,147 - - - - - 2,373,232

Losses on investments,
net and finance income (7,199,881) (656,984) (73,853) - (4,866) (322) (217,001) (661) (8,153,568)

Income from management fees 202,822 - - 73,000 228 10,617 778 (13,048) 274,397

Income from fees and commissions
(d) 9,334 9,468 54,109 - 97,881 - - (30,421)(1) 140,371

Income from financial services 46,000 - - - - 46,000

Other income - 18,771 - 5,000 2,613 (7) - (425) 25,952

Total income (5,752,301) 39,916 449,403 124,000 95,856 10,288 (216,223) (44,555) (5,293,616)

Payments and change in liabilities in respect of insurance contracts and

investment contracts, gross (5,879,613) (195,410) 491,741 - - - - - (5,583,282)

Reinsurers' share in payments and in changes in liabilities in respect of

insurance contracts 1,655 88,141 166,936 - - - - - 256,732

Payments and change in liabilities in respect of insurance contracts and

investment contracts -
retention (5,881,268) (283,551) 324,805 - - - - - (5,840,014)

Fees and commissions
and other purchase expenses 181,295 161,944 132,548 11,000 - - - (28,249) 458,538

General and administrative expenses 125,840 44,686 32,451 55,000 62,331 9,483 8,849 (14,665) 323,975

Other expenses (income) (6,814) - - 3,000 2,714 - 1,932 - 832

Finance expenses (income) (7,776) (2,020) 5,042 1,000 364 86 30,151 (487) 26,360

Total expenses (5,588,723) (78,941) 494,846 70,000 65,409 9,569 40,932 (43,401) (5,030,309)

Company's share in the net results of investees 6,979 - (463) 513 3,772 4,503 - - 15,304

Net income (loss) before taxes on income (156,599) 118,857 (45,906) 54,513 34,219 5,222 (257,155) (1,154) (248,003)

Other comprehensive income (loss) before taxes on income (99,340) (68,999) (177,397) - - 399 (279,924) - (625,261)

Total comprehensive income (loss) before taxes on income (255,939) 49,858 (223,303) 54,513 34,219 5,621 (537,079) (1,154) (873,264)

As of March 31 2020

Unaudited

In NIS thousand

Liabilities, gross in respect of insurance contracts and yield-dependent

investment contracts 59,845,046 4,085,782 - - - - - - 63,930,828

Liabilities, gross in respect of insurance contracts and non-yield

dependent investment contracts 12,896,492 4,051,357 6,364,044 - - - - - 23,311,893

(a) For additional data regarding the life insurance and long-term savings subsegments, please see Section b below.

(b) For additional data regarding the health insurance subsegments, please see Section c below.

(c) For additional data regarding the property and casualty insurance subsegments, please see Section d below.

(d) Arises from commission income received from agencies owned by the Group, mainly from activities in the life insurance and long-term savings segment.

A. Reportable Segment (cont.)

For the year ended December 31 2020

Life insurance
and long-term Property and
casualty Financial Insurance Not
attributed
to
operating Adjustments

savings (a) Health (b) insurance (c) services agencies Other segments and offsets Total

Audited

In NIS thousand

Premiums earned, gross 4,765,553 2,781,698 2,835,401 - - - - - 10,382,652

Premiums earned by reinsurers 99,195 286,671 943,112 - - - - - 1,328,978

Premiums earned -
retention 4,666,358 2,495,027 1,892,289 - - - - - 9,053,674

Gains (losses) on investments, net and finance income 4,632,824 482,269 130,873 (91) 37 127 239,167 (5,500) 5,479,706

Income from management fees 1,106,546 - - 248,930 1,361 44,915 3,084 (47,647) 1,357,189

Income from fees and commissions (d) 39,119 44,170 214,717 - 389,025 - - (130,980) 556,051

Income from financial services - - - 159,000 - - - - 159,000

Other income 11,673 23,999 - 9,000 89,102 1,137 19 (3,084) 131,846

Total income 10,456,520 3,045,464 2,237,879 416,839 479,525 46,179 242,270 (187,211) 16,737,466

Increase in insurance liabilities and payments in respect of

insurance contracts 8,517,055 2,371,630 1,640,879 - - - - - 12,529,564

Reinsurers' share in payments and in changes in liabilities

in respect of insurance contracts 49,450 234,439 542,801 - - - - - 826,690

Payments and change in liabilities in respect of insurance

contracts and
investment contracts -
retention 8,467,605 2,137,191 1,098,078 - - - - - 11,702,874

Fees and commissions and other purchase expenses 727,330 498,524 597,354 40,000 - - - (113,105) 1,750,103

General and administrative expenses 543,566 161,986 144,083 222,078 237,974 39,466 66,210 (55,335) 1,360,028

Other expenses 26,303 - - 12,000 9,123 409 7,505 (455) 54,885

Finance expenses (income) 3,397 (2,324) (8,021) 5,000 3,314 402 147,191 (2,450) 146,509

Total expenses 9,768,201 2,795,377 1,831,494 279,078 250,411 40,277 220,906 (171,345) 15,014,399

Company's share in the net results of investees 12,006 2,055 (3,592) 3,159 8,670 17,399 - - 39,697

Net income (loss) before taxes on income 700,325 252,143 402,793 140,920 237,784 23,301 21,364 (15,866) 1,762,764

Other comprehensive income (loss) before taxes on

income 6,732 (33,485) 121,690 - (332) 1,467 181,489 - 277,561

Comprehensive income (loss) before taxes on income 707,057 218,658 524,483 140,920 237,452 24,768 202,853 (15,866) 2,040,325

As of December 31 2020

Audited

In NIS thousand

Liabilities, gross in respect of insurance contracts and yield

dependent investment contracts 71,540,354 5,316,559 - - - - - - 76,856,913

Liabilities, gross in respect of insurance contracts and non

yield-dependent investment contracts 13,047,252 4,237,911 6,184,724 - - - - - 23,469,887

(a) For additional data regarding the life insurance and long-term savings subsegments, please see Section B below.

(b) For additional data regarding the health insurance subsegments, please see Section C below.

(c) For additional data regarding the property and casualty insurance subsegments, please see Section D below.

(d) Arises from commission income received from agencies owned by the Group, mainly from activities in the life insurance and long-term savings segment.

B. Additional data regarding the life insurance and long-term savings segment

For the three-month period ended March 31 2021

Provident

Life fund Pension fund

insurance management management Total

Unaudited

In NIS thousand

Premiums earned, gross 1,261,813 - - 1,261,813

Premiums earned by reinsurers 28,018 - - 28,018

Premiums earned - retention 1,233,795 - - 1,233,795

Investment income, net and finance

income 3,372,939 15,033 1,472 3,389,444

Income from management fees 323,424 54,691 44,468 422,583

Income from fees and commissions 8,569 - - 8,569

Other income 5,302 - 190 5,492

Total income 4,944,029 69,724 46,130 5,059,883

Payments and change in liabilities in

respect of insurance contracts and

investment contracts, gross 4,485,338 12,072 - 4,497,410

Share of reinsurers in payments and

changes in liabilities in respect of

insurance contracts 10,751 - - 10,751

Payments and change in liabilities in

respect of insurance contracts and

investment contracts - retention 4,474,587 12,072 - 4,486,659

Fees and commissions, marketing

expenses and other purchase expenses 127,219 22,174 21,662 171,055

General and administrative expenses 98,463 23,482 22,282 144,227

Other expenses 4,049 183 93 4,325

Finance expenses 3,925 3 - 3,928

Total expenses 4,708,243 57,914 44,037 4,810,194

Company's share in the net results of

investees 10,521 - - 10,521

Net income before taxes on income 246,307 11,810 2,093 260,210

Other comprehensive income before

taxes on income 30,043 - - 30,043

Total comprehensive income for the

period before taxes on income 276,350 11,810 2,093 290,253

For the three-month period ended March 31 2020

Provident

Life fund Pension fund

insurance management management Total

Unaudited

In NIS thousand

Premiums earned, gross 1,259,058 - - 1,259,058

Premiums earned by reinsurers 23,634 - - 23,634

Premiums earned - retention 1,235,424 - - 1,235,424

Gains (losses) on investments, net and

finance income (7,198,634) 522 (1,769) (7,199,881)

Income from management fees 109,975 51,091 41,756 202,822

Income from fees and commissions 9,334 - - 9,334

Total income (5,843,901) 51,613 39,987 (5,752,301)

Payments and change in liabilities in

respect of insurance contracts and

investment contracts, gross (5,886,178) 6,565 - (5,879,613)

Share of reinsurers in payments and

changes in liabilities in respect of

insurance contracts 1,655 - - 1,655

Payments and change in liabilities in

respect of insurance contracts and

investment contracts - retention (5,887,833) 6,565 - (5,881,268)

Fees and commissions, marketing

expenses and other purchase expenses 140,121 20,637 20,537 181,295

General and administrative expenses 85,847 17,379 22,614 125,840

Other expenses (income) (6,919) 11 94 (6,814)

Finance expenses (income) (7,805) 15 14 (7,776)

Total expenses (5,676,589) 44,607 43,259 (5,588,723)

The Company's share in the profits of

investees consolidated according to the

equity method, net of investees 6,979 - - 6,979

Profit (loss) before income taxes (160,333) 7,006 (3,272) (156,599)

Other comprehensive loss before

taxes on income (99,340) - - (99,340)

Total comprehensive income (loss)

for the period before taxes on

income (259,673) 7,006 (3,272) (255,939)

B. Additional data regarding the life insurance and long-term savings segment (cont.)

For the year ended December 31 2020

Provident

Life fund Pension fund

insurance management management Total

Audited

In NIS thousand

Premiums earned, gross 4,765,553 - - 4,765,553

Premiums earned by reinsurers 99,195 - - 99,195

Premiums earned - retention 4,666,358 - - 4,666,358

Investment income, net and finance

income 4,592,667 37,459 2,698 4,632,824

Income from management fees 736,673 199,220 170,653 1,106,546

Income from fees and commissions 39,119 - - 39,119

Other income 11,673 - - 11,673

Total income 10,046,490 236,679 173,351 10,456,520

Payments and change in liabilities in

respect of insurance contracts and

investment contracts, gross 8,478,358 38,697 - 8,517,055

Share of reinsurers in payments and

changes in liabilities in respect of

insurance contracts 49,450 - - 49,450

Payments and change in liabilities in

respect of insurance contracts and

investment contracts - retention 8,428,908 38,697 - 8,467,605

Fees and commissions, marketing

expenses and other purchase expenses 554,421 85,389 87,520 727,330

General and administrative expenses 378,758 80,118 84,690 543,566

Other expenses 20,762 733 4,808 26,303

Finance expenses (income) 3,393 21 (17) 3,397

Total expenses 9,386,242 204,958 177,001 9,768,201

Company's share in the net results of

investees 12,006 - - 12,006

Net income (loss) before income tax 672,254 31,721 (3,650) 700,325

Other comprehensive income before

taxes on income 6,732 - - 6,732

Total comprehensive income (loss)

for the year before taxes on income 678,986 31,721 (3,650) 707,057

B. Additional data regarding the life insurance and long-term savings segment (cont.) Breakdown of results by type of policy

Data for the three-month period ended March 31 2021:

Policies including a savings component (including
appendices) by policy issuance date Policies without a
savings component

Since 2004 Life insurance sold
as a single policy

Until 1990
(1) Until 2003 Non yield
dependent Yield
dependent Individual Group Total

Unaudited
In NIS thousand

Gross premiums
Proceeds in respect of
investment contracts 16,354 276,482 - 793,075 142,326 33,576 1,261,813

credited directly to
insurance reserves
Financial margin - - - 1,120,809 - - 1,120,809

including management
fees (2)
Payments and change
in liabilities in respect of 124,289 244,523 (3) - 78,688 - - 447,500

insurance contracts,
gross
Payments and change 137,360 1,687,563 - 2,117,203 71,433 30,319 4,043,878

in liabilities for
investment contracts
Payments and change
in liabilities for - - - 441,460 - - 441,460

guaranteed return
provident fund tracks
Total payments and
change in liabilities from 12,072

life insurance and long
term savings 4,497,410

Total comprehensive
income from life
insurance business 94,979 143,235 - 8,565 23,759 5,812 276,350

Profit from pension and
provident funds
Total profit from life 13,903

insurance and long-term
savings 290,253

Products issued until 1990 (including increases in respect thereof) were mainly guaranteed return policies that were backed mainly by designated bonds.

The financial margin does not include additional income of the Company collected as a percentage of the premium and is calculated before deducting investment management expenses. The financial margin in guaranteed return policies is based on actual investment income for the reporting year less the product of the annual guaranteed rate of return, multiplied by the average reserve per year in the various insurance reserves. In this matter, investment income also includes the change in the fair value of available-for-sale financial assets that is charged to the statement of comprehensive income. In yield-dependent contracts, the financial margin is the total fixed and variable management fees calculated on the basis of the yield and average balance of insurance reserves.

In Q1 2021, variable management fees in respect of participating policies in the amount of approximately NIS 199 million were charged.

B. Additional data regarding the life insurance and long-term savings segment (cont.) Breakdown of results by type of policy

Data for the three-month period ended March 31 2020:

Policies including a savings component (including appendices) by
policy issuance date Policies without a
savings component

Since 2004 Life insurance sold
as a single policy

Until 1990 (1) Until 2003 Non yield
dependent Yield
dependent Individual Group Total

Audited

Gross premiums:
Proceeds in respect
of investment
contracts credited 19,518 295,589 - In NIS thousand
772,695 142,171 29,085 1,259,058

directly to insurance
reserves
Financial margin - - - 487,660 - - 487,660

including
management fees (2)
Payments and
change in liabilities in (139,305) 44,612 (3) - 65,175 - - (29,518)

respect of insurance
contracts, gross
Payments and
change in liabilities 37,975 (3,297,408) (6) - (1,783,126) (6) 42,308 22,758 (4,977,493)

for investment
contracts
Payments and
change in liabilities - - - (908,685) (6) - - (908,685)

for guaranteed return
provident fund tracks
Total payments and
change in liabilities
from life insurance 6,565

and long-term
savings
Total comprehensive
income (loss) from
life insurance (5,879,613)

business (101,451) (5) (75,212) (4) - (78,763) (4,839) 592 (259,673)

Profit from pension
and provident funds
Total loss on life
insurance and long 3,734

term savings (255,939)

Products issued until 1990 (including increases in respect thereof) were mainly guaranteed return policies that were backed mainly by designated bonds.

The financial margin does not include additional income of the Company collected as a percentage of the premium and is calculated before deducting investment management expenses. The financial margin in guaranteed return policies is based on actual investment income for the reporting year less the product of the annual guaranteed rate of return, multiplied by the average reserve per year in the various insurance reserves. In this matter, investment income also includes the change in the fair value of available-for-sale financial assets that is charged to the statement of comprehensive income. In yield-dependent contracts, the financial margin is the total fixed and variable management fees calculated on the basis of the yield and average balance of insurance reserves.

In Q1 2020, the estimated management fees which were not collected due to negative yield in respect of participating policies amounted to approximately NIS 517 million.

The profit includes a loss in respect of a change in the K value, amounting to approximately NIS 94 million, before tax.

The profit includes a loss in respect of the effect of the change in the discount rate in the calculation of the supplementary retirement pension reserve and paid pensions totaling approximately NIS 49 million. For further details, please see Note 8(a)(4).

This amount includes the effect of the decline in the financial markets in Israel and around the world due to the coronavirus crisis and a decrease of approximately 10% in assets under management in respect of participating policies.

B. Additional data regarding the life insurance and long-term savings segment (cont.) Breakdown of results by type of policy

Data for the year ended December 31 2020:

Policies including a savings component (including
appendices) by policy issuance date Policies without a
savings component

Since 2004 Life insurance sold as
a single policy

Until 1990
(1) Until 2003 Non yield
dependent Yield
dependent
Unaudited Individual Group Total

In NIS thousand

Gross premiums:
Proceeds in respect of
investment contracts 73,020 1,133,432 - 2,870,641 563,776 124,684 4,765,553

credited directly to
insurance reserves - - - 1,945,751 - - 1,945,751

Financial margin including
management fees (2)
Payments and change in 185,503 466,855 (3) - 269,041 - - 921,399

liabilities in respect of
insurance contracts, gross
Payments and change in 439,848 2,783,738 - 4,457,267 261,625 112,290 8,054,768

liabilities for investment
contracts
Payments and change in
liabilities for guaranteed - - - 423,590 - - 423,590

return provident fund
tracks
Total payments and
change in liabilities from 38,697

life insurance and long
term savings
Total comprehensive
income (loss) from life 8,517,055

insurance business (4) 108,190 (5) 560,657 (4)(5) - (74,902) 71,566 13,475 678,986

Profit from pension and
provident funds
Total profit from life 28,071

insurance and long-term
savings 707,057

Products issued until 1990 (including increases in respect thereof) were mainly guaranteed return policies that were backed mainly by designated bonds.

The financial margin does not include additional income of the Company collected as a percentage of the premium and is calculated before deducting investment management expenses. The financial margin in guaranteed return policies is based on actual investment income for the reporting year less the product of the annual guaranteed rate of return, multiplied by the average reserve per year in the various insurance reserves. In this matter, investment income also includes the change in the fair value of available-for-sale financial assets that is charged to the statement of comprehensive income. In yield-dependent contracts, the financial margin is the total fixed and variable management fees calculated on the basis of the yield and average balance of insurance reserves.

As of September 30 2020, the estimated management fees which were not collected due to negative yield in respect of participating policies amounted to approximately NIS 101 million; this amount was offset against management fees in the fourth quarter of 2020.

The profit includes a profit in respect of a change in the K value, amounting to approximately NIS 261 million, before tax.

The profit includes a profit in respect of the effect of the changes in assumptions and the effect of the change in the discount rate in the calculation of the supplementary retirement pension reserve and paid pensions totaling approximately NIS 41 million. For further details, please see Note 8(a)(4).

C. Additional data regarding the health insurance segment

Data for the period ended March 31 2021

Long-term care Other (2)

Individual Group Long-term Short-term Total

Unaudited

In NIS thousand

Gross premiums 64,897 239,633 372,814(1) 3,995(1) 681,339

Payments and change in
liabilities in respect of
insurance contracts, gross 103,997 505,115 228,792 6,584 844,488

Total comprehensive
income (loss) from health
insurance business 9,582 (4) 393 14,417 (1,406) 22,986

(1) Of this, individual premiums in the amount of NIS 214,173 thousand and collective premiums in the amount of NIS 162,636 thousand. The decrease in individual premiums is mainly due to a decrease in travel insurance activity following the coronavirus crisis and ceasing to market health insurance policies for Israelis staying abroad permanently or for prolonged periods (relocation) beginning in the second quarter of 2020. In January 2021, the relocation insurance portfolio was transferred from the Company to the DavidShield Insurance Company Ltd.

Data for the period ended March 31 2020

Long-term care Other (2)

Individual Group Long-term Short-term Total

Unaudited

In NIS thousand

Gross premiums 65,459 221,144 430,512(1) 74,757(1) 791,872

Payments and change in
liabilities in respect of
insurance contracts, gross (64,736) (368,987) (3) 185,050 53,263 (195,410)

Total comprehensive
income (loss) from health
insurance business 50,245 (4) (32,912) (3) 39,747 (7,222) 49,858

(1) Of this, individual premiums in the amount of NIS 313,165 thousand and collective premiums in the amount of NIS 192,104 thousand.

C. Additional data regarding the health insurance segment (cont.)

Data for the year ended December 31 2020

Long-term care Other (2)

Individual Group Long-term Short-term Total

Audited

In NIS thousand

Gross premiums 259,764 891,730 1,521,350(1) 83,378(1) 2,756,222

Payments and change in
liabilities in respect of
insurance contracts, gross 271,231 1,224,983 796,511 78,905 2,371,630

Total comprehensive
income (loss) from health
insurance business 41,730 (33,016) 228,886 (18,942) 218,658

(1) Of this, individual premiums in the amount of NIS 1,001,573 thousand and collective premiums in the amount of NIS 603,155 thousand.

(2) The most material coverage included in other long-term health insurance is medical expenses; in short-term health insurance - dental treatment expenses.

(3) The change in the liabilities and loss stem mainly from the effect of the decline in the financial markets in Israel and around the world following the coronavirus crisis.

(4) The profit in the three-month period ended March 31 2021 includes an increase in the insurance reserve (LAT) in the amount of approximately NIS 37 million and in the three-month period ended March 31 2020 - a decrease in LAT of NIS 59 million. The profit for the 3-month period ended on March 31 2020 includes the results of Ad 120, in the amount of approximately NIS 26 million, compared with an immaterial profit during the reporting period; for further details, please see Note 2.D.

D. Additional data regarding the property and casualty insurance segment

For the three-month period ended March 31 2021

Compulsory
motor
insurance Motor
property Property and
other
subsegments
(*) Other
liability
subsegments
(**) Total

Unaudited

In NIS thousand

Gross premiums 185,928 329,441 228,546 163,678 907,593

Reinsurance premiums 79,067 581 150,830 62,327 292,805

Premiums - retention 106,861 328,860 77,716 101,351 614,788

Change in unearned premium balance,

retention 32,037 73,440 19,068 25,579 150,124

Premiums earned - retention 74,824 255,420 58,648 75,772 464,664

Investment income, net and finance income 38,837 13,604 4,044 37,702 94,187

Income from fees and commissions 18,922 16 28,686 6,555 54,179

Total income 132,583 269,040 91,378 120,029 613,030

Payments and change in liabilities in respect of

insurance contracts, gross 153,010 165,817 52,716 92,488 464,031

Reinsurers' share in payments and in changes

in liabilities in respect of insurance contracts 68,792 314 41,040 28,273 138,419

Payments and change in liabilities for insurance

contracts - retention 84,218 165,503 11,676 64,215 325,612

Fees and commissions, marketing expenses

and other purchase expenses 15,410 51,855 36,724 23,217 127,206

General and administrative expenses 7,208 10,968 6,848 6,231 31,255

Finance expenses 2,653 - 276 2,575 5,504

Total expenses 109,489 228,326 55,524 96,238 489,577

Company's share in the net results of

investees (476) (179) (50) (462) (1,167)

Net income before taxes on income 22,618 40,535 35,804 23,329 122,286

Other comprehensive income before

taxes on income 22,537 8,473 2,347 21,879 55,236

Total comprehensive income for the

period before taxes on income 45,155 49,008 38,151 45,208 177,522

Liabilities in respect of insurance

contracts, gross, as of March 31 2021 2,819,358 796,742 703,203 2,143,461 6,462,764

Liabilities in respect of insurance

contracts - retention - as of March 31
2021 1,759,836 795,910 203,665 1,751,326 4,510,737

(*) Property and other insurance subsegments mainly include data from the comprehensive home insurance, comprehensive business insurance and property loss insurance subsegments, whose activity constitutes 82% of total premiums in these subsegments.

(**) Other liability insurance subsegments mainly include data from the following segments: third-party insurance, professional liability insurance and employers' liability insurance, the activity of which constitutes 82% of total premiums in these subsegments.

D. Additional data regarding the property and casualty insurance segment (cont.)

For the three-month period ended March 31 2020

Compulsory
motor Motor Property and
other
subsegments Other
liability
subsegments

insurance property (*)
Unaudited (**) Total

In NIS thousand

Gross premiums 182,069 312,102 235,604 156,783 886,558

Reinsurance premiums 91,498 34 151,731 42,567 285,830

Premiums - retention 90,571 312,068 83,873 114,216 600,728

Change in unearned premium balance,

retention 27,076 49,033 17,270 38,202 131,581

Premiums earned - retention 63,495 263,035 66,603 76,014 469,147

Losses on investments, net and

finance income (30,949) (11,333) (3,047) (28,524) (73,853)

Income from fees and commissions 21,432 - 27,913 4,764 54,109

Total income 53,978 251,702 91,469 52,254 449,403

Payments and change in liabilities in

respect of insurance contracts, gross 118,824 188,630 108,415 75,872 491,741

Reinsurers' share in payments and in

changes in liabilities in respect of

insurance contracts 78,304 (2) 66,307 22,327 166,936

Payments and change in liabilities for

insurance contracts - retention 40,520 188,632 42,108 53,545 324,805

Fees and commissions, marketing

expenses and other purchase

expenses 12,174 60,131 39,338 20,905 132,548

General and administrative expenses 7,008 12,282 7,251 5,910 32,451

Finance expenses 2,496 - 246 2,300 5,042

Total expenses 62,198 261,045 88,943 82,660 494,846

Company's share in the net

results of investees (196) (67) (19) (181) (463)

Profit (loss) before income taxes (8,416) (9,410) 2,507 (30,587) (45,906)

Other comprehensive loss before

taxes on income (75,202) (25,485) (7,403) (69,307) (177,397)

Total comprehensive loss before

taxes on income for the period (83,618) (34,895) (4,896) (99,894) (223,303)

Liabilities in respect of insurance

contracts, gross, as of March 31

2020 2,732,293 757,185 743,277 2,131,289 6,364,044

Liabilities in respect of insurance

contracts - retention - as of

March 31 2020 1,826,246 757,185 232,231 1,763,031 4,578,693

(*) Property and other insurance subsegments mainly include data from the comprehensive home insurance, comprehensive business insurance and property loss insurance subsegments, whose activity constitutes 82% of total premiums in these subsegments.

(**) Other liability insurance subsegments mainly include data from the following segments: third-party insurance, professional liability insurance and employers' liability insurance, the activity of which constitutes 85% of total premiums in these subsegments.

D. Additional data regarding the property and casualty insurance segment (cont.)

For the year ended December 31 2020

Com
pulsory
motor Motor Property and
other
subseg Other
liability
subseg

insurance property ments (*) ments (**) Total

Audited

In NIS thousand

Gross premiums 584,123 1,031,838 772,728 486,363 2,875,052

Reinsurance premiums 288,266 135 527,646 164,581 980,628

Premiums - retention 295,857 1,031,703 245,082 321,782 1,894,424

Change in unearned premium balance, retention 19,988 (15,965) (6,996) 5,108 2,135

Premiums earned - retention 275,869 1,047,668 252,078 316,674 1,892,289

Investment income, net and finance income 46,101 22,236 6,334 56,202 130,873

Income from fees and commissions 86,229 - 111,679 16,809 214,717

Total income 408,199 1,069,904 370,091 389,685 2,237,879

Payments and change in liabilities in respect of

insurance contracts, gross 405,449 700,372 302,746 232,312 1,640,879

Reinsurers' share in payments and in changes in

liabilities in respect of insurance contracts 271,132 (7) 207,374 64,302 542,801

Payments and change in liabilities for insurance

contracts - retention 134,317 700,379 95,372 168,010 1,098,078

Fees and commissions, marketing expenses and

other purchase expenses 66,377 255,818 176,843 98,316 597,354

General and administrative expenses 30,616 54,182 32,096 27,189 144,083

Finance income (3,964) - (411) (3,646) (8,021)

Total expenses 227,346 1,010,379 303,900 289,869 1,831,494

Company's share in the net results of investees (1,519) (519) (157) (1,397) (3,592)

Net income before income tax 179,334 59,006 66,034 98,419 402,793

Other comprehensive income before taxes

on income 51,449 17,583 5,334 47,324 121,690

Total comprehensive income for the year 230,783 76,589 71,368 145,743 524,483

before taxes on income

Liabilities in respect of insurance contracts, 2,731,581 717,570 677,415 2,058,158 6,184,724

gross, as of December 31 2020

Liabilities in respect of insurance contracts -
retention - as of December 31 2020 1,725,755 717,570 190,626 1,710,351 4,344,302

(*) Property and other insurance subsegments mainly include data from the comprehensive home insurance, comprehensive business insurance and property loss insurance subsegments, whose activity constitutes 81% of total premiums in these subsegments.

(**) Other liability insurance subsegments mainly include data from the following segments: third-party insurance, professional liability insurance and employers' liability insurance, the activity of which constitutes 84% of total premiums in these subsegments.

NOTE 4 - BUSINESS COMBINATIONS

A. Acquisition of Halman Aldubi Investment House Ltd.

On December 7 2020, the Company entered into a merger agreement with Halman Aldubi Investment House Ltd. (hereinafter: "Halman Aldubi). Under the merger agreement, a reverse triple merger was carried out, with Halman Aldubi becoming a privately-held company wholly owned by the Company. The consideration of the transaction for Halman Aldubi is NIS 275 million. On February 28 2021, upon meeting the conditions precedent, the merger was completed. As of that date, the Company wholly-owns Halman Aldubi. The consolidation commencement date is March 31 2021.

Total assets under management by Halman Aldubi, net of the assets under management by the default pension fund sold to Meitav Dash (please see Section D below), as of March 31 2021, is approximately NIS 66 billion.

B. Loan extended to Halman Aldubi

On February 18 2021, the Company entered into an agreement with Halman Aldubi Provident and Pension Funds Ltd., a company wholly-owned by Halman-Aldubi (hereinafter - "Halman Provident"), according to which the Company would extend Halman Provident a loan in the amount of approximately NIS 88,633 thousand. The loan principal will be repaid in six unequal annual installments on May 1 of each year. From 2022 to 2024 - 4% of the principal in each payment; in 2028 - 28% of the principal; and in 2029- 2030 - 30% of the principal in each payment. The loan (principal and interest) is linked to the consumer price index; the loan principal will bear a fixed interest rate of 0.45% (base interest rate). If Halman Provident does not meet the financial covenants specified in the loan agreement, the interest rate will increase by up to 0.5%. The loan to Halman Provident, for the purpose of financing the full early redemption of all bonds (Series A) issued by Halman Provident, in the amount of approximately NIS 73.6 million (hereinafter, respectively: the "Bonds" and the "Early Redemption"), as well as to finance the full early repayment of a loan totaling approximately NIS 15 million (hereinafter: the "Bank Loan Amount"), taken by Halman Provident from a local banking corporation. On March 8 2021, the early redemption of the bonds was executed and the Bank Loan Amount was transferred to the local banking corporation.

In addition, on March 25 2021, the Company entered into an agreement with Halman Aldubi to grant an additional loan in the amount of NIS 5 million. The loan principal will be repaid in one lump sum on March 31 2022. The principal will bear a fixed annual interest rate of Prime + 1%. The loan is intended to cover Halman Aldubi's credit line liabilities to a local bank.

C. Merger of Halman Provident into Phoenix Excellence Pension and Provident Funds

On May 23 2021, the Board of Directors of Phoenix Excellence Pension and Provident Funds approved the merger of Halman Provident with and into The Phoenix Provident. According to the merger outline, the provident funds and the old pension funds managed by Halman Provident will be transferred to the management of Phoenix Provident. The merger between the companies - including the merger of the provident funds and the provident funds' investment tracks - is expected to be completed on September 30 2021, subject to obtaining the approvals required by law.

D. Default pension sale - Meitav-Dash deal

On February 22 2021, the Company entered into an agreement with Meitav Dash Provident Funds and Pension Ltd. (hereinafter: "Meitav Dash Provident"), according to which following the completion of the agreement with Halman Aldubi, as aforesaid, the Company will exercise its influence as Halman Aldubi's sole shareholder, such that Halman Provident will sign an agreement for the sale to Meitav Dash Provident of the new pension funds managed by Halman Provident for NIS 45 million, to be paid in one lump sum on the completion date. On March 10 2021, Halman Provident signed the said agreement. The completion of the sale is subject to meeting accepted conditions precedent, and the last date for the completion of the Funds' sale agreement is scheduled for June 30 2021.

Accordingly, in its financial statements as of March 31 2021, the Company classified the assets and liabilities in respect of the default pension activity as a held-for-sale assets and liabilities. Pursuant to a temporary measurement by an external appraiser, the total fair value of the held-for-sale assets and liabilities is approximately NIS 34 million.

NOTE 4 - BUSINESS COMBINATIONS (cont.)

E. The Halman Aldubi business combination

The Company recognized the fair value of the assets acquired and the liabilities assumed as part of the business combination according to a provisional measurement. As of the date of approval of the financial statements, a final valuation has not yet been received by an external appraiser in relation to the fair value of the identified assets acquired and the liabilities assumed. A final adjustment of the consideration for the purchase as well as the fair value of the assets and liabilities purchased can be carried out up to 12 months from the acquisition date. At the final measurement date, the adjustments were made by way of a restating the comparison results previously reported according to the provisional measurement. The Company has opted to measure the non-controlling interests in the acquired company according to the proportionate share of the non-controlling interests in the fair value of the net identified assets of the acquiree.

The fair value of the identified assets and identifiable liabilities of Halman Aldubi at acquisition date is as follows:

Fair value

In NIS thousand

Intangible assets 205,760

Deferred tax assets 2,380

Deferred acquisition costs 19,047

Property, plant & equipment 34,901

Investments in associates (271)

Current tax assets 1,952

Receivables and debit balances 18,056

Financial investments 32,421

Cash and cash equivalents 35,239

Total assets 349,485

Liabilities in respect of deferred taxes (55)

Liability for employee benefits, net (5,018)

Liability in respect of current taxes (2,637)

Payables and credit balances (35,205)

Financial liabilities (34,161)

Total liabilities (77,076)

Assets, net in Halman's books of accounts 272,409

Non-controlling interests 206

Intangible assets arising from the acquisition, net of tax 96,018

Total acquisition cost, including loan to Halman Provident 368,633

NOTE 4 - BUSINESS COMBINATIONS (cont.)

E. The Halman Aldubi business combination (cont.)

The total cost of the business combination amounted to NIS 369 million, and included a cash payment of NIS 275 million, a loan to Halman Provident in the amount of NIS 94 million and direct acquisition costs attributed to the transaction in the amount of approximately NIS 1 million, charged as an expense and included in the general and administrative expenses line item.

In NIS thousand

Total acquisition cost in cash 275,000

Loan to Halman Provident (*) 93,633

Total investment 368,633

Cash arising from the acquisition/used for the acquisition:

Cash and cash equivalents in the acquiree as of the acquisition date 35,239

Cash paid as acquisition proceeds (368,633)

Cash, net (333,394)

(*) For further details regarding the terms and conditions of the loans, please see Section B above.

As stated above, the consolidation commencement date is March 31 2021; therefore, the results of Halman Aldubi for the period ended March 31 2021 were not included in the Company's results.

Had the business combination taken place at the beginning of the year, the effect of the comprehensive income after tax and the income of Halman Aldubi on the after tax comprehensive income and income of the Group would have been immaterial.

NOTE 5 - FINANCIAL INSTRUMENTS

A. Assets for yield-dependent contracts

Following is a breakdown of assets held against insurance contracts and investment contracts presented at fair value through profit and loss:

As of March 31 As of
December
31

2021 2020 2020

Unaudited Audited

In NIS thousand

Investment property 1,853,064 1,631,541 1,839,576

Financial investments:

Marketable debt assets 20,920,260 20,169,999 21,761,391

Non-marketable debt assets 7,513,185 7,145,477 7,119,613

Shares 19,514,158 13,790,691 18,045,043

Other financial investments 21,182,459 14,050,932 18,644,400

Total financial investments 69,130,062 55,157,099 65,570,447

Cash and cash equivalents 11,162,653 7,512,737 10,464,216

Other 189,637 190,408 159,845

Total assets for yield-dependent contracts 82,335,416 64,491,785 78,034,084

Fair value of financial assets by level:

The following table presents an analysis of assets held against insurance contracts and investment contracts presented at fair value through profit and loss. The different levels were defined as follows:

Level 1 - fair value measured using quoted prices (unadjusted) in an active market for identical instruments.

Level 2 - fair value measured using observable inputs, either directly or indirectly, that are not included in Level 1 above.

Level 3 - fair value measured using inputs that are not based on observable market inputs.

For financial instruments periodically recognized at fair value, the Company estimates, at the end of each reporting period, whether transfers have been made between the various levels of the fair value hierarchy.

During the reporting periods there were no material transfers between Level 1 and Level 2.

A. Assets for yield-dependent contracts (cont.)

The Company holds the financial instruments measured at fair value according to the following classifications:

As of March 31 2021

Level 1 Level 2 Level 3 Total

Unaudited

In NIS thousand

Financial investments:

Marketable debt assets 15,606,411 5,313,849 - 20,920,260

Non-marketable debt assets - 5,780,945 1,732,240 7,513,185

Shares 17,616,224 667,087 1,230,847 19,514,158

Other financial investments 8,692,736 1,408,113 11,081,610 21,182,459

Total 41,915,371 13,169,994 14,044,697 69,130,062

Level 1

Level 2 Level 3 Total

Unaudited

In NIS thousand

16,170,342 3,999,657 - 20,169,999

- 6,149,514 995,963 7,145,477

12,575,472 220,261 994,958 13,790,691

4,705,344 837,343 8,508,245 14,050,932

33,451,158 11,206,775 10,499,166 55,157,099

(*) Reclassified.

As of December 31 2020

Level 1 Level 2 Level 3 Total

Audited

In NIS thousand

Financial investments:

Marketable debt assets 16,507,724 5,253,667 - 21,761,391

Non-marketable debt assets - 5,427,432 1,692,181 7,119,613

Shares 16,277,954 518,085 1,249,004 18,045,043

Other financial investments 7,395,216 1,101,059 10,148,125 18,644,400

Total 40,180,894 12,300,243 13,089,310 65,570,447

A. Assets for yield-dependent contracts (cont.)

Assets measured at fair value - Level 3

Fair value measurement at the reporting date

Financial assets at fair value through profit and loss

Non Other

Marke marke financial

table debt table debt invest

assets assets Shares ments Total

Unaudited

In NIS thousand

10,148,12 13,089,31

Balance as of January 1 2021 - 1,692,181 1,249,004 5 0

Total gains recognized in profit and loss

(*) - 30,563 49,908 663,592 744,063

Purchases - 357,168 69,658 992,481 1,419,307

Proceeds from interest and dividend - (14,068) (7,306) (154,689) (176,063)

Redemptions / sales - (208,876) (41,597) (393,378) (643,851)

Transfers from Level 3 (**) - (124,728) (88,820) (174,521) (388,069)

Balance on March 31 2021 - 1,732,240 1,230,847 11,081,610 14,044,697

(*) Of which:

Total unrealized gains for the period

included in profit and loss in respect of

assets held as of March 31 2021 - 25,022 42,660 519,689 587,371

(**) Transfers from Level 3 stem mainly from securities whose rating changed and from securities issued for the first time.

Fair value measurement at the reporting date

Financial assets at fair value through profit and loss

Non Other

Marke marke financial

table debt table debt invest

assets assets Shares ments Total

Unaudited

In NIS thousand

Balance as of January 1 2020 - 599,815 945,002 8,082,717 9,627,534

Total gains (losses) recognized in profit

and loss (*) - (25,993) 13,119 42,240 29,366

Purchases - 483,540 122,937 807,632 1,414,109

Proceeds from interest and dividend - (4,175) (4,981) (92,110) (101,266)

Redemptions / sales - (57,224) (81,119) (337,591) (475,934)

Transfers into Level 3 - - - 5,357 5,357

Balance on March 31 2020 - 995,963 994,958 8,508,245 10,499,166

(*) Of which:

Total unrealized gains (losses) for the

period included in profit and loss in

respect of assets held as of March 31

2020 - (26,098) 5,201 63,982 43,085

A. Assets for yield-dependent contracts (cont.)

Assets measured at fair value - Level 3 (cont.)

Fair value measurement at the reporting date

Financial assets at fair value through profit and loss

Marketable
debt
assets Non
marketable
debt assets Shares Other
financial
investments Total

Audited

In NIS thousand

Balance as of January 1 2020 - 599,815 945,002 8,082,717 9,627,534

Total gains recognized in
profit and loss (*) - 87,999 149,858 1,072,694 1,310,551

Purchases - 1,274,640 285,357 2,804,880 4,364,877

Proceeds from interest and
dividend - (21,774) (20,877) (439,476) (482,127)

Redemptions / sales - (373,618) (51,059) (1,390,789) (1,815,466)

Transfers into Level 3 (**) - 125,119 - 18,099 143,218

Transfers from Level 3 (**) - - (59,277) - (59,277)

Balance on December 31
2020 - 1,692,181 1,249,004 10,148,125 13,089,310

(*) Of which:

Total unrealized gains for the
period included in profit and
loss in respect of assets held
as of December 31 2020 - 54,547 119,291 606,432 780,270

(**) Transfers to Level 3 stem mainly from securities the rating of which was changed; transfers from Level 3 stem from a security issued for the first time.

B. Other financial investments (cont.)

Non-marketable debt assets

Composition:

As of March 31 2021

Carrying
amount Fair value

Unaudited

In NIS thousand

Loans and receivables:

Designated bonds and treasury deposits (*) 8,300,630 12,268,566

Other non-convertible debt assets, excluding deposits with banks 4,887,646 5,186,548

Deposits with banks 1,144,929 1,193,076

Total non-marketable debt assets 14,333,205 18,648,190

Impairments carried to profit and loss (cumulative) 62,066

(*) The fair value is calculated according to the contractual repayment date.

As of March 31 2020

Carrying
amount Fair value

Unaudited
In NIS thousand

Loans and receivables:

Designated bonds and treasury deposits (*) 8,251,293 11,661,134

Other non-convertible debt assets, excluding deposits with banks 4,618,967 4,665,090

Deposits with banks 635,067 674,364

Total non-marketable debt assets 13,505,327 17,000,588

Impairments carried to profit and loss (cumulative) 29,278

(*) The fair value is calculated according to the contractual repayment date.

B. Other financial investments (cont.)

As of December 31 2020

Carrying
amount Fair value

Audited

Loans and receivables:

Designated bonds and treasury deposits (*) 8,190,398 12,193,361

Other non-convertible debt assets, excluding deposits with banks 4,708,119 5,039,280

Deposits with banks 1,108,672 1,153,929

Total non-marketable debt assets 14,007,189 18,386,570

Impairments carried to profit and loss (cumulative) 60,343

(*) The fair value was calculated according to the contractual repayment date.

2. Fair value of financial assets by level

The tables below depict an analysis of the financial instruments presented at fair value. During the reporting periods there were no material transfers between Level 1 and Level 2.

As of March 31 2021

Level 1 Level 2 Level 3 Total

Unaudited

In NIS thousand

Marketable debt assets 6,128,980 1,362,325 - 7,491,305

Shares 1,551,492 237,290 328,816 2,117,598

Other 848,678 500,340 2,186,140 3,535,158

Total 8,529,150 2,099,955 2,514,956 13,144,061

As of March 31 2020

Level 1 Level 2 Level 3 Total

Unaudited

In NIS thousand

Marketable debt assets (*) 6,427,288 1,094,046 - 7,521,334

Shares (*) 1,114,880 53,332 267,619 1,435,831

Other 468,558 413,738 1,601,706 2,484,002

Total 8,010,726 1,561,116 1,869,325 11,441,167

(*) Reclassified.

B. Other financial investments (cont.)

Fair value of financial assets by level (cont.)

As of December 31 2020

Level 1 Level 2 Level 3 Total

Audited

In NIS thousand

Marketable debt assets 6,732,438 1,363,030 - 8,095,468

Shares 1,414,649 155,336 330,008 1,899,993

Other 716,580 493,072 2,037,817 3,247,469

Total 8,863,667 2,011,438 2,367,825 13,242,930

Assets measured at fair value - Level 3

Financial assets at fair value through profit and loss and
available-for-sale financial assets

Marketable
debt
assets Non
marketable
debt assets Shares Other
financial
investments Total

Unaudited

In NIS thousand

Balance as of January 1 2021 - - 330,008 2,037,817 2,367,825

Total profits recognized:

In profit and loss (*) - - 16,265 38,058 54,323

In other comprehensive income - - 6,674 67,686 74,360

Purchases - - 17,572 192,484 210,056

Proceeds from interest and
dividend - - (1,388) (37,411) (38,799)

Redemptions / sales - - (18,071) (54,288) (72,359)

Transfers from Level 3 (**) - - (22,244) (58,206) (80,450)

Balance on March 31 2021 - - 328,816 2,186,140 2,514,956

(*) Of which:

Total unrealized gains (losses) for
the period included in profit and
loss in respect of assets held as of
March 31 2021 - - (1,311) 18,242 16,931

(**) Transfers from Level 3 stem from a securities issued for the first time.

B. Other financial investments (cont.)

Fair value of financial assets by level (cont.)

Financial assets at fair value through profit and loss and
available-for-sale financial assets

Marke
table
debt
assets Non
marke
table
debt
assets Shares Other
financial
invest
ments Total

Unaudited

In NIS thousand

Balance as of January 1 2020
Gains (losses) recognized: - - 241,569 1,498,494 1,740,063

In profit and loss (*) - - 11,261 (84,084) (72,823)

In other comprehensive income - - 3,552 29,545 33,097

Purchases - - 56,969 189,937 246,906

Proceeds from interest and

dividend - - - (9,164) (9,164)

Redemptions / sales - - (45,732) (23,022) (68,754)

Balance on March 31 2020
(*) Of which: - - 267,619 1,601,706 1,869,325

Total unrealized losses for the
period recognized in profit and
loss in respect of assets held as of

March 31 2020 - - (1,427) (94,563) (95,990)

Financial assets at fair value through profit and loss and available-for-sale financial assets

Marke
table
debt
assets Non
marke
table
debt
assets Shares
Audited Other
financial
invest
ments Total

In NIS thousand

Balance as of January 1 2020 - - 241,569 1,498,494 1,740,063

Total profits recognized:

In profit and loss (*) - - 15,954 65,621 81,575

In other comprehensive income - - 30,695 90,028 120,723

Purchases - - 98,720 619,384 718,104

Proceeds from interest and

dividend - - (6,250) (81,452) (87,702)

Redemptions / sales - - (33,570) (163,976) (197,546)

Transfers into Level 3 (**) - - - 9,718 9,718

Transfers from Level 3 (**) - - (17,110) - (17,110)

Balance on December 31 2020 - - 330,008 2,037,817 2,367,825

(*) Of which:

Total unrealized gains (losses) for

the period recognized in profit and

loss in respect of assets held as of

December 31 2020 - - (6,574) (13,350) (19,924)

(**) Securities issued for the first time and securities classified from investment in an associate

C. FINANCIAL LIABILITIES (cont.)

Breakdown of financial liabilities

As of March 31 2021

Carrying
amount Fair value

Unaudited

In NIS thousand

Financial liabilities presented at amortized cost:

Short-term credit from banking corporations 128,673 128,673

Bonds (please see Note 8.G) 1,467,650 1,513,765

Subordinated bonds (1) 3,376,344 3,631,801

Deposits from tenants 578,621 578,621

Liability for REPO 434,113 434,113

Other (3) 26,434 26,434

6,011,835 6,313,407

Financial liabilities presented at fair value through profit and loss

Derivatives (4) 652,113 652,113

Liability for short sale of marketable securities 952,406 952,406

Total financial liabilities presented at fair value through profit and loss 1,604,519 1,604,519

Lease liabilities (2) 131,626 -

Total financial liabilities 7,747,980

(1) The bonds were issued for the purpose of complying with the capital requirements

(2) No fair value disclosure is required.

(3) Mainly provision in respect of an option to acquire an investee.

(4) Including financial liabilities in respect of yield-dependent contracts totaling approximately NIS 533 million.

C. FINANCIAL LIABILITIES (cont.)

Breakdown of financial liabilities (cont.)

As of March 31 2020

Carrying
amount Fair value

Unaudited

In NIS thousand

Financial liabilities presented at amortized cost:

Loans from non-bank entities 4,020 4,020

Short-term credit from banking corporations 38,000 38,000

Bonds (1) 1,127,565 1,095,521

Subordinated bonds (1)(2) 3,370,823 3,479,761

Repurchase commitment (REPO) (3) 456,712 456,712

Deposits from tenants 617,059 617,059

Other 20,942 20,942

Total financial liabilities presented at amortized cost 5,635,121 5,712,015

Financial liabilities presented at fair value through profit and loss

Derivatives (3) (4) 821,219 821,219

Short sale of securities 319,423 319,423

Total financial liabilities presented at fair value through profit and loss 1,140,642 1,140,642

Lease liabilities (5) 121,632 -

Total financial liabilities 6,897,395

(1) The bonds were issued in order to comply with the capital requirements.

(2) In view of the effect of the coronavirus crisis, in March 2020 the Bank of Israel extended to authorized entities (pension funds, provident funds, mutual funds and insurance companies) a proposal to enter into a repurchase transaction (REPO) - for the sale and repurchase of government bonds and zero-coupon bonds. Accordingly, The Phoenix Insurance entered into a REPO transaction totaling approximately NIS 457 million (of which NIS 98 million in respect of yield-dependent contracts). Liabilities for derivatives increased as well, by approximately NIS 632 million, mainly due to the sharp declines in financial markets and due to changes in exchange rates.

(3) Including financial liabilities in respect of yield-dependent contracts totaling approximately NIS 582 million.

(4) No disclosure of fair value was required.

C. FINANCIAL LIABILITIES (cont.)

Breakdown of financial liabilities (cont.)

As of December 31 2020

Carrying
amount Fair value

Audited

In NIS thousand

Financial liabilities presented at amortized cost:

Loans from non-bank entities 80,796 80,796

Bonds 1,118,538 1,146,475

Subordinated bonds (1) 3,374,460 3,675,933

Liability for REPO 389,315 389,315

Deposits from tenants 589,726 589,726

Other (3) 24,583 24,583

Total financial liabilities presented at amortized cost 5,577,419 5,906,829

Financial liabilities presented at fair value through profit and loss

Derivatives (4) 436,818 436,818

Liability for short sale of marketable securities 924,088 924,088

Total financial liabilities presented at fair value through profit and loss 1,360,906 1,360,906

Lease liabilities (2) 105,390 -

Total financial liabilities 7,043,714

(1)
The bonds were issued in order to comply with the capital requirements.

(2) No disclosure of fair value was required. (3) Mainly provision in respect of an option to acquire an investee.

(4) Including financial liabilities in 2020 in respect of yield-dependent contracts totaling approximately NIS 362 million.

2. Fair value of financial liabilities by level

As of March 31 2021

Level 1 Level 2 Level 3 Total

Unaudited

In NIS thousand

Liability for short sale of
marketable securities 952,406 - - 952,406

Derivatives 165,869 482,181 4,063 652,113

Financial liabilities presented at
fair value 1,118,275 482,181 4,063 1,604,519

C. FINANCIAL LIABILITIES (cont.)

Fair value of financial liabilities by level (cont.)

As of March 31 2020

Level 1 Level 2 Level 3 Total

Audited

In NIS thousand

Liability for short sale of marketable
securities 319,423 - - 319,423

Derivatives 185,309 635,910 - 821,219

Financial liabilities presented at fair value 504,732 635,910 - 1,140,642

As of December 31 2020

Level 1 Level 2 Level 3 Total

Audited

In NIS thousand

Liability for short sale of marketable
securities 924,088 - - 924,088

Derivatives 148,018 283,617 5,183 436,818

Financial liabilities presented at fair value 1,072,106 283,617 5,183 1,360,906

3. Valuation techniques

The fair value of investments traded actively in regulated financial markets is determined based on market prices as of the reporting date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using transactions that were recently made at market terms, reference to the current market value of another instrument which is substantially the same, discounting of cash flows, or other valuation methods.

a) Non-marketable debt assets

The fair value of non-marketable debt assets, which are measured at fair value through profit and loss, and the fair value of non-marketable financial debt assets, for which fair value information is provided solely for disclosure purposes, is determined by discounting the estimated future cash flows from those assets. The discount rates are based primarily on yields on government bonds and spreads of corporate bonds as measured on the TASE. The quoted prices and interest rates used for discounting purposes are determined by a company which won the tender, published by the Ministry of Finance, for the setting up and operating a database of quoted prices and interest rates for institutional entities.

C. FINANCIAL LIABILITIES (cont.)

Valuation techniques (cont.)

b) Non-marketable shares

The fair value of the investment in non-marketable shares was estimated using the discounted cash flow model (DCF). The estimate requires management to make certain assumptions regarding the model's data, including expected cash flows, discount rates, credit risk and volatility. The probabilities in respect of the estimates in the range can be measured reliably, and management uses them to determine and evaluate the fair value of these investments in nonmarketable shares.

c) Derivatives

The Company enters into transactions involving derivative financial instruments with multiple parties, especially financial institutions. The derivatives were valued using valuation models with observable market inputs are mainly interest rate swap contracts and foreign currency forwards. The most frequently used valuation techniques include prices of forwards and swap models using present value calculations. The models combine a number of inputs, including the credit rating of the parties to the financial transaction, spot/forward exchange rates, prices of forward contracts and interest rate curves. All derivative contracts are fully back against cash; therefore, there is no counterparty credit risk and non-performance risk of the Company itself in respect thereof.

NOTE 6 - SHAREHOLDERS' EQUITY AND CAPITAL REQUIREMENTS

A. It is management's policy to maintain a strong capital base in order to retain Company's ability to continue its activities such that it will be able to generate returns to its shareholders and support future business activities. The Phoenix Insurance, the Excellence Group, pension and provident funds management companies and other institutional entities consolidated in the financial statements are subject to capital requirements set by the Commissioner of the Capital Market, Insurance and Savings (hereinafter - the "Commissioner").

In October 2020, The Phoenix Insurance's Board of Directors set a minimum economic solvency ratio target and target range based on Solvency II. The minimum economic solvency ratio target, taking into account the transitional provisions, is set at 135% while the minimum solvency ratio target without taking into account the provisions during the transitional period is set at 105%, set to reach 135% at the end of the transitional period according to The Phoenix Insurance's capital plan.

Furthermore, The Phoenix Insurance's Board of Directors approved an economic solvency ratio target range of 150%-170%, within which The Phoenix Insurance aspires to be during and at the end of the transitional period, taking into account the Deduction During the Transitional Period and its gradual reduction.

B. Principles of the Solvency II-based Economic Solvency Regime

The Phoenix Insurance is subject to the Solvency II-based Economic Solvency Regime in accordance with implementation provisions as published in June 2017 and revised in October 2020 (hereinafter the "Economic Solvency Regime").

Economic solvency ratio

The economic solvency ratio is calculated as the ratio between the insurance company's recognized economic equity and the capital required for solvency purposes.

The recognized economic equity is determined as the sum of the core tier 1 capital derived from the economic balance sheet and debt instruments that include loss absorption mechanisms (Additional Tier 1 capital, Tier 2 capital instruments, Subordinated Tier 2 capital, Tier 2 capital and Tier 3 capital).

Notes to the Condensed Consolidated Interim Financial Statements as of March 31 2021

NOTE 6 - SHAREHOLDERS' EQUITY AND CAPITAL REQUIREMENTS (cont.)

Economic balance sheet items are calculated based on economic value, with insurance liabilities calculated on the basis of a best estimate of all expected future cash flows from existing businesses, without conservatism margins, and plus a risk margin.

The solvency capital requirement (SCR) is designed to estimate the economic equity's exposure to a series of scenarios set out in the Economic Solvency Regime provisions, and which reflect insurance, market and credit risks as well as operational risks.

The Economic Solvency Regime includes, among other things, transitional provisions in connection with compliance with capital requirements, and which allow increasing the economic equity by deducting from the insurance reserves an amount calculated in accordance with the Economic Solvency Regime provisions (hereinafter: the "Deduction"). The Deduction will decrease gradually until 2032 (hereinafter: the "Transitional Period"). In addition to a reduced capital requirement, that will increase gradually until 2023, in respect of certain investment types.

In accordance with the Consolidated Circular, the Economic Solvency Ratio Report in respect of the December 31 and June 30 data of each year shall be included in the first periodic report published after the calculation date. Despite the above, on March 19 2020, the Commissioner published a letter, Ref. No. SH 2020-2031, stipulating that an insurance company is exempt from publishing an Economic Solvency Ratio Report as of June 30 2020 and from filing solvency reporting files in for that date.

On March 14 2021, a letter from the Commissioner was published, Ref. No. 2021-423, stating that the deadline for publication of the Economic Solvency Ratio Report as of December 31 2020, as well as the accompanying files reported to the Commissioner, shall be filed no later than June 30 2021. In addition, the letter states that an insurance company may refrain from publishing an Economic Solvency Ratio Report as of June 30 2021.

The Phoenix Insurance published its Solvency Ratio Report as of December 31 2020 along with the publication of the Financial Statements.

In accordance with the Solvency Ratio Report as of December 31 2020, The Phoenix Insurance has surplus capital, both when calculation is made having no regard to the transition provisions and when it is made taking into account the transition provisions. The calculation made by The Phoenix Insurance as described above, was reviewed by The Phoenix Insurance's independent auditors, in accordance with International Standard on Assurance Engagements (ISAE 3400) - the Examination of Prospective Financial Information. This standard is relevant to audits of solvency calculations and does not constitute part of the auditing standards that apply to financial statements.

It should be emphasized that the projections and assumptions on the basis of which the Economic Solvency Ratio Report was prepared are based mainly on past experience as arising from actuarial studies conducted from time to time. In view of the reforms in the capital market, insurance and savings, and the changes in the economic environment, past data do not necessarily reflect future results. The calculation is sometimes based on assumptions regarding future events, steps taken by management, and the pattern of the future development of the risk margin, that will not necessarily materialize or will materialize in a manner different than the assumptions used in the calculation. Furthermore, actual results may materially vary from the calculation, since the combined scenarios of events may materialize in a manner that is materially different than the assumptions made in the calculation.

In their special report, the independent auditors noted that they did not review the appropriateness of the Deduction During the Transitional Period as of December 31 2020, except for verifying that the Deduction amount does not exceed the expected discounted amount of the risk margin and the capital required for solvency in respect of life and health insurance risks arising from existing businesses during the Transitional Period in accordance with the pattern of future development of the required capital, which affects both the calculation of the expected capital release and the release of the expected risk margin as described in the provisions on calculation of risk margin. Furthermore, attention is drawn to what is stated in the Economic Solvency Ratio Report regarding the uncertainty derived from regulatory changes and exposure to contingent liabilities, the effect of which on the solvency ratio cannot be estimated.

For further details, please see Section 2.1 to the Report of the Board of Directors, and the Economic Solvency Ratio Report as of December 31 2020 published on The Phoenix Insurance's website.

NOTE 6 - SHAREHOLDERS' EQUITY AND CAPITAL REQUIREMENTS (cont.)

C. Dividend

According to the letter published by the Commissioner, in October 2017, (hereinafter - the "Letter") an insurance company shall be entitled to distribute a dividend only if, following the distribution, the company has a solvency ratio - according to the provisions of the Economic Solvency Regime - of at least 100%, calculated without taking into account the transitional provisions and subject to the economic solvency ratio target set by the Company's Board of Directors. The aforesaid ratio shall be calculated without the relief granted in respect of the original difference attributed to the acquisition of the provident funds and management companies. In addition, the letter set out provisions for reporting to the Commissioner.

On October 27 2020, The Phoenix Insurance's Board of Directors approval of the dividend distribution whereby, as from 2021, The Phoenix Insurance shall distribute an annual dividend at a rate of 30% to 50% of its distributable comprehensive income as per its audited annual consolidated financial statements for the relevant year, so long as The Phoenix Insurance meets the minimum economic solvency ratio targets in accordance with Solvency II. ---

The minimum economic solvency ratio target, taking into account the transitional provisions, is set at 135% while the minimum solvency ratio without taking into account the provisions during the transitional period is set at 105%,¹ set to reach 135% at the end of the transitional period according to The Phoenix Insurance's capital plan.

It is hereby clarified that this policy should not be viewed as an undertaking by The Phoenix Insurance to distribute dividends, and that any actual distribution shall be individually subject to the Board of Directors' approval, at its sole discretion; the Board of Directors of The Phoenix Insurance may decide on actual distribution at different (higher or lower) rates, or not to distribute any dividend. Furthermore, the execution of any actual distribution shall be subject to compliance with the provisions of the law applicable to any dividend distribution, including, among other things, the provisions of the Companies Law, 1999, and to compliance with the financial covenants The Phoenix Insurance has undertaken or/or will undertake to comply with, to The Phoenix Insurance's having sufficient distributable profits on the relevant dates, to the condition that the distribution shall not adversely affect the terms of The Phoenix Insurance's bonds and/or its cash flows, and to the extent to which the The Phoenix Insurance needs cash to finance its activities, including future investments, as shall be from time to time, and/or its expected and/or planned future activities.

The Board of Directors of The Phoenix Insurance may review the dividend distribution policy from time to time and decide, at any given time, taking into account business considerations and the legal and regulatory provisions applicable to The Phoenix Insurance, to change the dividend distribution policy, including the rate of dividend to be distributed.

On March 24 2021, the Board of Directors of The Phoenix Insurance approved the distribution of a dividend in the amount of NIS 200 million, in accordance with the audited results as of December 31 2019, and in accordance with the results of an estimate to calculate the Solvency II-based economic solvency ratio as of December 31 2020. The dividend was paid in April 2021.

As stated, in accordance with the audited economic solvency ratio as of December 31 2020, the Company meets the requirements of the letter published by the Commissioner in October 2017 regarding the restrictions on dividend distribution, as stated above.

The solvency ratio as of December 31 2020 does not include the effect of the business activity of The Phoenix Insurance subsequent to December 31 2020 until the report publication date, changes in the mix and amounts of insurance investments and liabilities, exogenous effects - including changes in the risk-free interest rate curve, and regulatory changes affecting the business environment.

¹ On December 30 2019, the Board of Directors of The Phoenix Insurance approved the transfer of Excellence Pension and Provident Funds to the Company as distribution of a dividend in kind. The transfer was approved by the Commissioner; however, the Israel Tax Authority's approval for the execution of the transfer has not yet been received, and therefore the transfer has not yet been made. In view of the above, on October 27 2020, The Phoenix Insurance's Board of Directors passed a resolution whereby the target is inapplicable to the transfer. Upon receipt of the Israel Tax Authority's approval, the execution of the abovementioned transfer shall be assessed subject to the provisions of the Solvency Circular and letter. It should also be noted that this transfer is expected to reduce The Phoenix Insurance's capital surplus.

Notes to the Condensed Consolidated Interim Financial Statements as of March 31 2021

NOTE 6 - SHAREHOLDERS' EQUITY AND CAPITAL REQUIREMENTS (cont.)

D. The Phoenix Insurance has undertaken to supplement, at any given time, The Phoenix Excellence Pension and Provident Funds' equity to the amount set in the Income Tax (Rules for the Authorization and Management of Provident Funds) Regulations, 1964. This commitment shall be in effect so long as The Phoenix Insurance controls The Phoenix Excellence Pension and Provident Funds, whether directly or indirectly. The Phoenix Insurance will be required to fulfill this commitment only when The Phoenix Excellence Pension and Provident Funds Ltd.'s equity will be negative, provided that the supplement amount does not exceed the liabilities limit as aforesaid; the commitment will be in effect so long as The Phoenix Insurance is the controlling shareholder of this entity. Further to what is stated in Note 1C about the transfer of control in The Phoenix Excellence Pension and Provident Funds to the Company, the Company will be committed, at any given time, to supplement Excellence Pension and Provident Funds' equity to the amount set in the Income Tax (Rules for the Authorization and Management of Provident Funds) Regulations, 1964.

F. Phoenix Excellence Pension and Provident Funds and Halman Aldubi Provident are required to maintain minimum equity in accordance with the Supervision of Financial Services Regulations (Provident Funds) (Minimum Equity Required from a Provident Fund or a Pension Fund's Management Company), 2012, and the Commissioner's Firectives, the directives of the Israel Securities Authority and/or the TASE Rules and Regulations. As of March 31 2021, the companies meet these requirements.

G. The Phoenix Insurance through The Phoenix Capital Raising is considering the issuance of an Additional Tier 1 capital instrument, recognized as regulatory capital under the Economic Solvency Regime, in order to strengthen its capital and improve its solvency ratio. In March 2021, the Board of Directors approved continuing the issuance procedure. The recognition of the instrument as an Additional Tier 1 capital instrument is subject to the approval of the Commissioner of the Capital Market, Insurance and Savings. The issuance amount is expected to be approximately NIS 400 million. The terms and conditions of the instrument, including the redemption period, are in accordance with the provisions of Part B ("Provisions in respect of Equity Capital of Insurance Companies") to Insurance Circular 2020-1- 15, "Provisions for Applying Economic Solvency Regime Based on Solvency II for Insurance Companies". The Phoenix Insurance works to obtain the regulatory approvals required for the issuance.

H. For further details regarding the acquisition of the company's shares, please see Note 9.C.

I. For further details regarding the Company's dividend distribution, please see Note 8.J.

NOTE 7 - CONTINGENT LIABILITIES

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions

In recent years, there has been a significant increase in the number of petitions to approve class actions filed against the Group and in the number of lawsuits recognized as class actions. This is part of an overall increase in petitions to approve lawsuits as class actions in general, including against companies engaged in the Group's areas of activity, which stems mainly from the enactment of the Class Actions Law, 2006. This trend substantially increases the Group's potential exposure to losses in the event of a ruling against the Group companies in class actions.

Petitions to approve lawsuits as class actions are filed through the hearing procedure mechanism set forth in the Class Action Law, 2006 (hereinafter: the "Class Actions Law"). The hearings procedure for petitions to approve lawsuits as class actions is divided into two main stages: The first stage is the approval petition (hereinafter: the "approval petition" or the "approval stage", respectively.) If the approval petition is rejected by the court, the hearing stage at the class action level ends. A ruling at the approval stage may be subject to a request for appeal to the appellate courts. In the second stage, if the approval petition is accepted, the class action will be heard (hereinafter: the "class action stage"). A judgment at the class action stage can be appealed to the appellate courts. Within the mechanism of the Class Actions Law, there are, inter alia, specific settlement agreements, both in the approval stage and in the class action stage, as well as arrangements with regard to the plaintiff's withdrawal of the approval petition or class action lawsuit.

In the State of Israel, filing class action lawsuits does not entail payment of a fee derived from the claim amount; therefore the amounts of such claims may be significantly higher than the actual exposure for that claim.

Petitions to approve lawsuits as class actions (including lawsuits approved as class actions and the approval of which is under appeal) are set out in Sections 13-1, 32-17, 34, 43-36, 47-45, 50, 52, 56, 57 to the following table; for such lawsuits, which, in management's opinion - that is based, inter alia, on legal opinions whereby the Group's defense claims are more likely than not to be accepted and the petitions to approve the lawsuit as class actions will be rejected - no provision was included in the financial statements, except for petitions to approve class actions in which the Group is willing to reach a settlement. For petitions to approve lawsuits as class actions (including lawsuits approved as class actions and the approval of which is under appeal), in which the Group's defense claims - in whole or in part - are more likely than not to be rejected, and in which the Group is willing to reach a compromise, provisions were included in the financial statements to cover the exposure as assessed by the Group or a provision in the amount for which the Group is willing to settle, as the case may be.

Management's assessment, which is based, inter alia, on legal opinions received, is included in the financial statements under adequate provisions, where such provisions were required, to cover the exposure as assessed by the Group or the amount for which the Group is willing to settle, as the case may be.

Many of the petitions to approve lawsuits as class actions have been filed against the Group on various matters related to insurance contracts and the Group's ordinary course of business, for which the Group has allocated insurance reserves.

In petitions to approve lawsuits as class actions as set out in Sections 16-14, 33, 35, 44, 48, 49, 51, 55-53, 66-58 in the table below, at this preliminary stage, the chances of the petitions to approve lawsuits as class actions cannot be assessed and therefore no provision is included in respect thereof in the Financial Statements.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

Following is more information about the petitions to approve lawsuits as class actions:

No. Date,1 court,2 defendants and
claim amount3 Main arguments Details

1. January 2008
Tel Aviv District Court
The Phoenix Insurance and other
insurance companies
Approximately NIS 1.67 billion of all
defendants, with about NIS 277 million
attributed to The Phoenix Insurance.4 Unlawful collection of
payments known as
"sub-annuals" for life
insurance policies, in an
amount that exceeds
the permitted one. In May 2018, the Supreme Court granted the defendants' motion for leave to appeal and dismissed the
plaintiffs' appeal, such that the District Court's judgment was quashed and the motion for approval of the
claim as a class action was denied.
On July 2 2019, the Supreme Court upheld the plaintiffs' request for a further hearing (before a seven
judge panel) on the question set forth in the Judgment regarding the regulator's position filed with the
court regarding its instructions, and on
the question of de minimis defense in a monetary class action.
On February 2 2020, the Attorney General submitted his position in the additional hearing, according to
which he supports the stipulations made in the Judgment as to the weight that should be
given to the
regulator's position in relation to its guidelines; the Attorney General also stated that in his view there is
no room to interfere with the Judgment's adoption of the Capital Market Authority's interpretive position.
An additional hearing was held on July 26 2020, and the parties await a judgment.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

⁴ The amounts were assessed by the plaintiffs in the class action statement of claim. It should be noted that the amounts in the motion to approve the claim as a class action were different and higher; those amounts also referred to the claim of collecting handling fees on policies and interest on annual premium, which is paid in installments, at a rate higher than the rate permitted by law, which, as stated, has been rejected.

A.
Class actions -
petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

---------------------------------------------------------------------------------------------------------------- --------- --

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

2. February 2010
Central District Court
The Phoenix Insurance (and other insurance companies
in a parallel case, in light of filing a consolidated class
action statement of claim)
Approximately NIS 1.47
billion of all defendants
(includling the defendants in the corresponding case),
of which approximately NIS 238 million is attributed to
The Phoenix Insurance.4 The cause of the lawsuit, as approved
by
the
District
Court
(in
the
corresponding case) was breach of
insurance policies due to unlawful
collection of handling fees in a manner
that reduced the saving amount
accrued in favor of the policyholder for
a period starting seven years before
the claim was filed. In November 2016, the District Court -
in
a parallel case filed against
several other insurance companies -
partially approved motions to approve
the claims as class actions.
The class action -
both in the corresponding case and in the case heard
against The Phoenix Insurance -
continues to be heard jointly by the
District Court. At the same time, the parties conduct a mediation process.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

⁴ The amounts are the amounts assessed by the plaintiffs in the consolidated class action statement of claim filed in March 2019 against the insurance companies sued in the corresponding case and against The Phoenix. It should be noted that the amounts in the motion for approval of the claim as a class action were different and higher.

A.
Class actions -
petitions to approve lawsuits as class actions and lawsuits approved as class actions
(cont.)

---------------------------------------------------------------------------------------------------------------------------

No. Date,1 court,2
defendants and claim
amount3 Main arguments Details

3. April 2010
Central District Court
The Phoenix Insurance
and other insurance
companies
NIS 225.2 million from all
the defendants. Non-refund of
premium for the
relative portion of the
month in which the
insurance ended (due
to cancellation by the
policyholder) and/or
refund of premium
(where the premium is
refunded) at nominal
values (without
linkage differences
and interest). In June 2015, the district court partially affirmed the petition to approve the claim as a class action lawsuit.
In September 2016, the parties filed with the District Court an application for approval of a settlement agreement, at
amounts that are immaterial to The Phoenix Insurance, which includes: the appointment of an examining party who
will review the collection amounts in respect of which the claim was approved as a class action; consent to a contribution
of 80% of the amount of the refund to be determined by the examining party; provisions regarding future conduct in
cases of cancellation of policies that are the subject matter of the lawsuit and a recommendation regarding the payment
of compensation to the plaintiffs, legal fees, etc. The settlement agreement is subject to the Court's approval. In June
2017, the Court appointed a reviewer to review the settlement agreement; the reviewer filed the review on The Phoenix
Insurance in December 2020. The settlement agreement has not yet been approved by the court.

4. May 2013
Tel Aviv District Court
The Phoenix Insurance
Approximately NIS 220
million or alternatively NIS
90 million.4 Non-payment of
interest in respect of
insurance benefits
from the date of the
insurance event, or
alternatively from the
end
of 30 days from
the date on which the
claim was filed and
until actual payment
date. On February 28 2021, the District Court handed down a partial judgment, according to which it has approved the
class action, in respect of any entitled party (policyholder, beneficiary or third party), who -
during the period starting
three years prior to the filing of the lawsuit and ending on judgment date -
received insurance benefits from The
Phoenix Insurance (not in accordance with a judgment rendered in his case) without being duly paid interest thereon.
It was also established that, for the purpose of implementing the judgment, calculation and manner of restitution, an
expert will be appointed and that the class plaintiffs will be awarded legal expenses and legal fees.
On May 18 2021, The Phoenix Insurance filed an appeal with the Supreme Court against the judgment handed down
by the District Court as well as a motion to stay the execution of the judgment.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

⁴ The amounts are those amounts that were estimated by the plaintiff in the class action statement of claim - NIS 220 million (if it was ruled that interest should be calculated from the date of occurrence of the insurance event) and NIS 90 million (if it is ruled that interest should be calculated starting 30 days from the delivery date of the claim). It should be noted that the amounts in the motion for approval of the class action lawsuit were different and higher and also related to the linkage claim, which was rejected as described above.

A.
Class actions -
petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

---------------------------------------------------------------------------------------------------------------- ---------

No. Date,1 court,2 defendants
and claim amount3 Main arguments Details

5. July 2014
Central District Court
The Phoenix Pension and Gemel
Ltd. (currently: Phoenix
Excellence Pension and Provident
Funds Ltd.) and management
companies of other pension
funds.
NIS 48 million from all
defendants. Acting in bad faith when using the right -
under
the pension fund's rules and regulations -
to
increase management fees paid by pensioners
from the accrual to the maximum amount
allowed, as from the date they become
pensioners. The parties are awaiting the court's decision on the application for approval of the
claim as a class action.

6. June 2015
Beer Sheva District Court
The Phoenix Insurance
Approximately NIS 125 million. The cause of action, as approved by the District
Court, is a violation of the provisions of the
policy regarding special compensation
(reimbursement) for performing surgery in a
private hospital funded by "additional insurance
services" (SHABAN) and the questions common
to the group members are: what is the value of
the commitment form on behalf of a health
maintenance organization in respect of a
privately-owned hospital (Form 17), according
to which the amount to be reimbursed to the
policyholder is calculated; how The Phoenix
Insurance in effect calculated the amount
reimbursed to policyholders who underwent
surgeries as part of SHABAN; and whether The
Phoenix Insurance violated the provisions of the
policy, and did not reimburse the full amount to
the policyholders. In December 2019, the District Court approved the petition to approve the claim as a
class action lawsuit.
The group on whose behalf the class action will be conducted will include all
policyholders who were insured under a health insurance policy with The Phoenix
Insurance, which included a reimbursement arrangement for performing surgery at a
private hospital funded by SHABAN, based on a commitment form/Form 17, and in
respect of whom an insurance event occurred from June 25 2012 through June 25
2015.
The parties are in a mediation procedure.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A.
Class actions -
petitions to approve lawsuits as class actions and lawsuits approved as class actions
(cont.)

--------------------------------------------------------------------------------------------------------------------------- --

No. Date,1 court,2 defendants and
claim amount3 Main arguments Details

7. September 2015 The claim is that the defendants pay agents fees
and commissions calculated as a percentage of the The petition for approval of the claim as a class action lawsuit continues to be
heard in court.

Tel Aviv District Court management fees charged by them, thus allegedly
violating their fiduciary duties, and that, as a result,
the management fees that planholders
are charged
are higher than the appropriate rate.

The Phoenix Pension and
management companies of

additional pension funds

Approximately NIS 300 million per

year since 2008 of all the
defendants.

8. December 2015 Alleged unlawful collection of "sub-annuals" in life
insurance at a rate that is higher than the permitted
one. On May 27 2020, the court issued a ruling rejecting the motion for approval of the
claim as a class action, on the grounds that the plaintiffs do not have a cause of
action.

Tel Aviv District Court

The Phoenix Insurance and
another insurance company In September 2020, the plaintiff filed an appeal with the Supreme Court. An
appeal hearing is scheduled for March 7 2022.

Approximately NIS 100 million
from all defendants, of which NIS
50 million is attributed to The
Phoenix Insurance.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim
amount3 Main arguments Details

9. February 2016
Central District Court
The Phoenix Insurance
NIS 100 million. The plaintiffs argue that The Phoenix Insurance does not link the
payments it must pay policyholders under life insurance policies (which it
issued until July 19 1984) due to an insurance event or due to the
redemption of the policy, to the correct basic CPI in accordance with the
linkage terms and conditions set out in the policies; i.e., the latest CPI
published before the first day of the month in which the insurance term
begins; the plaintiffs argue that this has a significant effect on the
benefits to which the policyholders will be entitled. The parties are in a mediation procedure.

10. February 2016
Tel Aviv Regional Labor Court (the hearing was
transferred from the Central District Court due to
substantive jurisdiction)
The Phoenix Pension and Gemel Ltd. (currently:
Phoenix Excellence Pension and Provident Funds
Ltd.) and management companies of additional
pension funds.
Approximately NIS 1 billion of all the defendants. The plaintiffs argue that the defendants are acting inappropriately by
charging management fees in respect of disability and survivors benefits,
and do not disclose that fact, and that the rate of management fees
collected from such benefit recipients is the maximum permitted rate,
taking advantage of the fact that benefit recipients cannot transfer their
funds and/or entitlement to such benefits elsewhere. The petition for approval
of the claim as a
class action lawsuit continues to be heard in
court.

11. September 2016
Tel Aviv District Court
The Phoenix Insurance and other insurance
companies
NIS 4.45 billion from all defendants, of which NIS
943 million is attributed to The Phoenix
Insurance. Collection of premiums on health insurance policies, for unnecessary
coverages that the policyholders do not need, and alleged sale of health
insurance policies despite being aware that they include coverages that
the policyholders have no need for, since they have supplementary
health insurance from the health maintenance organization they are a
member of. In addition, according to the defendants, they also tied
services since customers were unable to purchase a reduced-coverage
policy that will include only coverages that are not included in the
supplementary health insurance of their health maintenance
organizations, thus creating "overlapping insurance". In October 2020, the District Court ruled
that the motion for approval of the claim as
a class action was denied.
In November 2020, the plaintiffs filed an
appeal to the Supreme Court. An appeal
hearing is scheduled for December 6 2021.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2
defendants and claim
amount3 Main arguments Details

The motions to approve the lawsuits as class actions that appear in Sections 12-16 below were submitted on the grounds of unlawful collection of investment management expenses which are not sanctioned by the policies or bylaws.

12. September 2016
Central District Court
The Phoenix Insurance
NIS 14.7 million. Collecting investment
management expenses in
the individual saving
policy Excellence Invest
in addition to collecting
management fees,
without a provision in the
policy expressly
permitting to do so. In May 2019, the District Court approved the petition to approve the claim as a class action lawsuit filed against
The Phoenix Insurance and three other insurance companies (hereinafter: the "Defendants"), for breaching the
provisions of the insurance policy due to unlawful collection of investment management expenses. The class on
whose behalf the class action lawsuit against The Phoenix Insurance will be conducted includes all policyholders
of the individual savings policy Excellence Invest issued by The Phoenix Insurance at present and in the seven
years prior to the date of submission of the motion for approval as
class action. The remedies claimed are the
reimbursement of the investment management expenses that were overcharged in addition to interest
differentials; and an order directing the defendants to stop collecting such fees.

In September 2019, The Phoenix Insurance (along with the other defendants) filed a motion for leave to appeal
to the Supreme Court against the decision approving the class action lawsuit.

At the request of the Supreme Court, on August 13 2020, the Attorney General submitted his position on the
proceedings and announced his attendance. According to the position, the Attorney General is of the opinion that
the court should accept the motion for leave to appeal and the appeal itself and order the rejection of the
motions for approval as class actions, for the reasons set out in the position.

A hearing on the request for leave to appeal took place on February 11 2021, and the parties are awaiting the
decision of the Supreme Court.

At this point, the hearing on the class action in the District Court was postponed.

It should be noted that requests for approval of class actions regarding investment management expenses are
also pending against Excellence Gemel (please see Section 13 in
the table below), The Phoenix Insurance (see
Section 14 in the table below) and Halman Aldubi Provident and Pension Funds Ltd. (see Sections 15 and 16 in
the table below).

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and
claim amount3 Main arguments Details

13. November 2016
Jerusalem Regional Labor Court
Excellence Nessuah Gemel Ltd.
(currently: Phoenix Excellence
Pension and Provident Funds Ltd.)
Approximately NIS 215 million. The plaintiffs argue that under the rules and
regulations of the Excellence Gemel provident fund,
which were in effect until January 1 2016, and
according to the rules and regulations of the
Excellence Advanced Education fund, Excellence
Gemel may not collect investment management
expenses from planholders, since collection of such
expenses had to stipulated clearly and expressly in the
rules and regulations of the funds. The parties filed a motion for a hearing arrangement with the court, according
to which the hearings to approve the claim as a class action will be postponed
until a decision has been made in connection with the motion for leave to
appeal against the May 2019 District Court decision to approve as petitions to
approve lawsuits as class actions filed for similar causes of action against The
Phoenix Insurance, among others (see Section 12 above, in the table).

14. June 2019
Tel Aviv Regional Labor Court
The Phoenix Insurance
Approximately NIS 351 million. According to the plaintiff, The Phoenix Insurance
charges policyholders of insurance policies which
combine a life insurance component and a pension
saving component (executive insurance) for
investment management expenses without such
charges being included in the terms and conditions of
the policy. The Phoenix Insurance has not yet submitted its response to the motion to
approve the claim as a class action, and on October 2019, it submitted a motion
for stay of proceedings until a decision is made in connection with the motion
for leave to appeal against the May 2019 District Court decision to approve as
class actions claims filed for similar causes of action (see Section 12 above, in
the table).
A final decision has yet to be made in connection with the stay of proceedings
motion.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A.
Class actions -
petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

---------------------------------------------------------------------------------------------------------------- ---------

No. Date,1 court,2 defendants and
claim amount3 Main arguments Details

15. June 2019
Jerusalem Regional Labor Court
Halman Aldubi Provident and
Pension Funds Ltd.
NIS 17.5 million. The statement of claim alleges that IBI Provident and
Study Fund Management Company Ltd. (which was
merged with Halman Aldubi on July 1 2018) charged
the plaintiff and the other planholders
of the study
fund under its management, investment
management expenses, in addition to the fund
management fees, contrary to the fund's bylaws. Halman Aldubi has not yet submitted its response to the petition for approval
of the claim as a class action lawsuit; in September 2019, it submitted a
motion for a stay of proceedings until a final decision has been made on ten
petitions to approve claims as class action lawsuits which are being heard in
Labor Court (including against Excellence Nessuah (see Section 13 above in
the table) regarding the collection of management expenses in provident
funds and advanced education funds.

A final decision has yet to be made in connection with the stay of proceedings
motion.

16. July 2019
Jerusalem Regional Labor Court
Halman Aldubi Provident and
Pension Funds Ltd.
No estimate was provided, but it
was noted that the damage to all
class members exceeds NIS 3
million. According to the statement of claim, Halman Aldubi
charged the plaintiff and the other planholders of the
Halman-Aldubi comprehensive pension fund (the
"Fund") investment management expenses, in
addition to the management fees charged by the
Fund, contrary to the Fund's bylaws; the practice
continued until May 2017, at which time the Fund's
bylaws were changed so as to include the specific
provision for charging direct investment management
expenses. Halman Aldubi has not yet submitted its response to the petition for approval
of the claim as a class action lawsuit; in September 2019, it submitted a
motion for a stay of proceedings until a final decision has been made on ten
petitions for approval of claims as class action lawsuits which are being heard
in Labor Court (including against Excellence Nessuah (see Section 13 above in
the table) regarding the collection of management expenses in provident
funds and advanced education funds.
A final decision has yet to be made in connection with the stay of proceedings
motion.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

17. January 2017
Central District Court
The Phoenix Insurance and other insurance companies
At least approximately NIS 12.25 million in respect of
each of the defendants. According to the plaintiffs, insurance companies overcharge
insurance premiums since they do not disclose to
policyholders a "practice" in the motor insurance subsegment
that allows updating the age of the young driver insured
under the policy and/or the years of driving experience when
moving into another age bracket and/or years of driving
experience bracket which can potentially result in a reduction
of the insurance premium. The petition for approval of the claim as a class
action lawsuit continues to be heard in court.

It should be noted that the plaintiffs refer in their claim to a
decision approving a motion for approval of a claim as a
class action dealing with the same issue and filed against
another insurance company, in which the said practice had
allegedly been proven.

18. April 2017
Tel Aviv Regional Labor Court (the hearing was
transferred from the Tel Aviv Central District due to
substantive jurisdiction)
Shekel Insurance Agency (2008) Ltd. (hereinafter:
"Shekel"), Agam Liderim (Israel) Insurance Agency
(2003) Ltd. (hereinafter: " Agam Liderim"), second-tier
companies of The Phoenix Holdings, and other insurance
agencies.
Approximately NIS 357 million of all defendants, of
which NIS 47.81 million is attributed to Agam Liderim
and NIS 89.64 million to Shekel. According to the plaintiffs, until the regulator intervened and
legislative changes were made in connection with this issue,
managers of pension arrangements in general and the
defendants in particular, provided employers with operating
services involving preparing and managing pension insurance
for employees without the employers paying any
consideration in respect thereof to the pension arrangement
managers, and that all costs pertaining to the operating
services are paid by the employees through management
fees they pay for the products marketed to them by the
managers of the pension arrangement. In August 2020, the court issued a ruling rejecting
the motion for approval of the claim as a class
action.
On October 5 2020, the plaintiffs filed an appeal
with the National Labor Court.
An appeal hearing is scheduled for June 9 2021.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and
claim amount3 Main arguments Details

19. June 2017
Central District Court
The Phoenix Insurance
The amount of the claim was not
estimated. The lawsuit concerns improper and unlawful actions of The Phoenix Insurance in the process of
marketing and selling the service contracts it sells as part of comprehensive motor insurance.
According to the claim, The Phoenix Insurance markets, either directly or through agents acting
on its behalf, comprehensive insurance plans that include service contracts, as an inherent and
integral part thereof; these marketing activities are carried out without presenting customers
with the price of the service contracts during the marketing process, without allowing them to
give up the service contracts in exchange for a lower price that will reflect the cost of the service
removed, while tying the purchase of a package of service contracts to the insurance plan,
failing to provide reliable information, failing to match the insurance to the needs of the
insurance applicant, etc. The parties are awaiting the
court's decision on the application
for approval of the claim as a class
action.
It should be noted that in July
2018, the Capital Market,
Insurance and Savings Authority
published an amendment to the
circular on the introduction of
service contracts and the methods
employed to market them. The
objective of the circular
amendment was to prescribe
additional provisions regarding the
marketing of service contracts.

20. June 2017
Central District Court (sitting as an
Administrative Court).
The National Insurance Institute
(hereinafter: the "National
Insurance Institute")
The Phoenix Insurance and
additional insurance companies
(hereinafter, jointly: the "Official
Respondents")
The amount of the claim was not
estimated. According to the plaintiffs, the National Insurance Institute collects national insurance
contributions and health insurance contributions illegally from the tax-exempt income of class
members as defined below, in addition to collecting the minimum rate of health insurance
contributions from class members' disability pension. According to the plaintiffs, the National
Insurance Institute overcharges class
members for these contributions through the pension
fund, the employer or any other third party.
The plaintiffs point out that the Official Respondents are entities through which the insurance
premiums were collected from the plaintiffs, and clarify that
any employer and any entity paying
an early pension and any entity paying a PHI benefit in Israel may be in a similar position to that
of the Official Respondents. According to the plaintiffs, it is impossible to add all the parties as
respondents and the
court is asked to consider the Official Respondents that were added and
which are related to the plaintiffs' case as class action defendants. The plaintiffs also stated that
no operative remedy is requested in the case of the Official Respondents in the framework of the
above claim. The petition for approval of the
claim as a class action lawsuit
continues to be heard in court.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim
amount3 Main arguments Details

21. August 2017
Tel Aviv Regional Labor Court (the hearing
was transferred from the Central District Court
due to substantive jurisdiction)
Excellence Gemel &
Hishtalmut Ltd.
(currently: Phoenix Excellence Pension and
Provident Funds Ltd.)
The claim amount was not estimated but it
was stated as approximately NIS 1 million or
more than NIS 2.5 million. Increasing management fees without sending prior notice as
required by law. The petition for approval of the claim as a class action
lawsuit continues to be heard in court.
It should be noted that in May 2021, the National Court
rejected the request for leave to appeal of Excellence
Gemel in relation to the Regional Court's decision to reject
its claim for the statute of limitations on the petition to
approve the claim as a class action. It shall be clarified
that the decision of the National Court did not directly
address the substance of the statute of limitations
argument and determined that the latter claim will be
decided as part of the proceedings, without prejudice to
the parties' arguments.

22. July 2017
Jerusalem District Court
PassportCard Israel General Insurance Agency
(2014) (hereinafter: "PassportCard") and The
Phoenix Insurance
The claim amount was not estimated, but it
was stated that it exceeds NIS 2.5 million of
all the defendants. The plaintiff claims that as part of travel insurance it provides
PassportCard effectively records confidential medical
conversations held between its policyholders and physicians,
listens to these conversations and transfers them to The
Phoenix Insurance, while breaching policyholders' privacy
without their consent and while conducting wiretapping.
In addition, the plaintiff claims that the defendants retain the
recorded conversations, maintain an illegal database and even
use the recordings. In October 2019, the court issued a judgment rejecting the
motion for approval of the claim as a class action lawsuit.
On
January 6 2020 the plaintiff filed an appeal against the
judgment to the Supreme Court. An appeal hearing is
scheduled for June 16, 2021.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

23. September 2017
Jerusalem District Court
The Phoenix Insurance and other insurance
companies
The claim amount was not estimated, but it was
stated that it was in the tens of millions of shekels or
more. According to the plaintiffs, the defendants breach the provisions of
Section 5(b) of the Adjudication of Interest and Linkage Differentials Law,
1961 (hereinafter: the "Interest and Linkage
Differentials Law"), by
implementing a policy whereby they do not add any linkage differences
and/or interest and/or linked interest to amounts ruled against them by a
judicial authority, in cases where the defendants pay such amounts to
class members at a later date than the date set for such payment. On March 4 2021, the parties
submitted to the court a motion for
approval of a settlement agreement
for an amount that is immaterial to
The Phoenix Insurance, under which
The Phoenix Insurance will amend
the
settlement deeds as outlined in
the settlement agreement; the
parties also recommended the
payment of compensation to the
class action plaintiff and legal fees for
his/her attorneys.
The settlement agreement has not
yet been approved by the court.

24. January 2018
Central District Court
The Phoenix Insurance and other insurance
companies
Approximately NIS 82.2 million per year from all the
defendants, of which approximately NIS 22.3 million
per year is attributed to The Phoenix Insurance. According to the
plaintiff, The Phoenix Insurance unlawfully refrains from
paying its policyholders and third parties the VAT component applicable
to the cost of damages when the damages have not been effectively
repaired. The petition for approval of the claim
as a class
action lawsuit continues to
be heard in court.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

25. February 2018
Tel Aviv District Court
The Phoenix Insurance
The Group's aggregate damage was not estimated,
but it was stated that it can be assumed to exceed
NIS 2.5 million. According to the plaintiffs, The Phoenix Insurance
misleads
those who purchased health insurance and/or those for
whom health insurance was purchased, where such
insurance is in effect only, or also, during the policyholder's
time in mandatory military service, career military service or
reserve military service and/or when the policyholder is a
policeman and/or a member of the security forces of the
State of Israel; the plaintiffs claim that The Phoenix
Insurance sells to the class members in general and IDF
soldiers in particular an insurance product that is almost
impossible to use due to various reasons as specified in the
lawsuit. The petition for approval of the claim as a class action
lawsuit continues to be heard in court.
In November 2020, the position of the Capital Market,
Insurance and Savings
Authority was submitted, which
supports the position of The Phoenix Insurance.

26. February 2018
Jerusalem District Court
The Phoenix Insurance
The amount of the claim was not estimated. According to the plaintiffs, The Phoenix Insurance continues
to charge life insurance premiums from its deceased
policyholders. On January 25 2021, the parties submitted a motion for
approval of a settlement agreement for an amount that
is immaterial to The Phoenix Insurance, under which
The Phoenix Insurance committed to reimburse
insurance premiums to the class members, as outlined
in the settlement agreement; the parties also
recommended the payment of compensation to the
class action plaintiff and legal fees for his/her attorneys.
The settlement agreement has yet to be approved by
the court.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim
amount3 Main arguments Details

27. February 2018
Tel Aviv District Court
Excellence Nessuah Gemel Ltd. (currently:
Phoenix Excellence Pension and Provident
Funds Ltd.) and additional companies
NIS 21 million from all defendants, of
which NIS 6 million is attributed to
Excellence Gemel. According to the plaintiffs, the claim deals with the unlawful collection of
handling fees /collection fees/operating fees/fees and commissions/early
repayment fees or any other payment (whatever its name may be)
collected by the defendants from planholders thereof to whom they
extended loans. Excellence Gemel has not yet submitted its
response to the petition for approval of the claim
as a class action lawsuit.
The parties are negotiating.
It should be noted that similar motions for
approval of claims as class actions filed against
The Phoenix Pension and The Phoenix Insurance
were concluded with a settlement agreement.

28. March 2018
Tel Aviv Regional Labor Court
The Phoenix Pension
Ltd. (currently:
Phoenix Excellence Pension and Provident
Funds Ltd.) and additional companies
The amount of the claim was not
estimated. According to the plaintiffs, the claim deals with collection of insurance
premiums in respect of survivors' insurance
(life insurance coverage)
from policyholders who have no survivors; which results with the
policyholders paying insurance premiums without receiving anything in
return. The parties are awaiting the court's decision on the
petition for approval of the claim as a class action
lawsuit.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

29. May 2018
Haifa Regional Labor Court
The Phoenix Pension and Gemel Ltd. (currently: Phoenix
Excellence Pension and Provident Funds Ltd.)4
NIS 200 million. According to the plaintiffs, contrary to that which is stated in its
rules and regulations, The Phoenix Pension has refrained from
paying or from paying in full the partial contributions towards
benefits to anyone who does not receive a full disability pension. In
any case, The Phoenix Pension refrained from reporting to
policyholders -
either in pay slips or in annual statements -
about
the payments it made, to the extent that it did, indeed, make such
payments. The parties are in a mediation
procedure.

30. June 2018
Jerusalem District Court
The Phoenix Insurance and another insurance company
The amount of the claim was not estimated. According to the plaintiff, the claim deals with the defendants'
unjustified refusal to recognize a surgical procedure that had
medical justification as an insurance event according to the health
policies issued, by claiming that it is a "preventive surgical
procedure". The petition for approval of the claim as
a class action lawsuit continues to be
heard in court.
In February 2021, the position of the
Capital Market, Insurance and Savings
Authority was submitted. The Phoenix
Insurance is preparing a response to the
position.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

⁴ The petition for approval of the claim as a class action lawsuit was originally filed against The Phoenix Insurance. The plaintiffs filed an amended petition for approval of the claim as a class action lawsuit, in which they changed the identity of the defendant and also added to their previous allegations and to the definition of the class they seek to represent.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim
amount3 Main arguments Details

31. September 2018
Tel Aviv Regional Labor Court
The Phoenix Insurance
The amount of the claim was not estimated. According to the plaintiff, The Phoenix Insurance breached its good faith and
fiduciary duties towards its policyholders by automatically depositing the additional
contributions it received following the expansion order that required an increase in
contributions towards benefits for all Israeli workers, for policyholders in managers
insurance policies taken out before June 1 2001 (with guaranteed annuity
conversion factors) in new policies referred to by the plaintiff as "contribution
policies", without carrying out a pension marketing procedure that includes a
justification document, and also by determining the management fees in the policy
unilaterally at the maximum rate permitted by law. On April 18 2021, the parties filed
with the court an agreed motion to
approve the plaintiff's withdrawal
of the petition to approve the claim
as
a class action.
The withdrawal motion has not yet
been approved by the court.

32. December 2018
Tel Aviv District Court
The Phoenix Insurance, other insurance
companies and banks
NIS 280 million from all defendants. According to he plaintiffs, the claim deals with unlawful overcharging of insurance
premiums for unnecessary building insurance policies issued to building owners
(who took out a mortgage loan and were required to insure the building with a
building policy in favor of the lending bank), despite the fact that at the time of
issuance of such policies, there was already and insurance policy covering that
building, regardless of whether that policy was taken out with the same insurance
company or with another insurance company. The petition for
approval of the
claim as a class action lawsuit
continues to be heard in court.

33. March 2019
Central District Court
The Phoenix Insurance
Approximately NIS 2.6 million. According to the plaintiff, the claim deals with The Phoenix Insurance's practice to
delay the repayment of the relative portion of insurance premiums upon cancellation
of compulsory motor and property insurance policies rather than paying it within the
period set by law; the plaintiff also claims that The Phoenix Insurance repays the
said amount without adding linked interest. The plaintiff also claims that The
Phoenix Insurance refrains from repaying full linkage when refunding the relative
portion of the insurance premiums. The parties are in a mediation
procedure.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and
claim amount3 Main arguments Details

34. May 2019
Tel Aviv District Court
The Phoenix Insurance
Approximately NIS 766.8 million. According to the plaintiff, the claim deals with The Phoenix
Insurance's not paying policyholders in participating life insurance
policies which include an Rm formula their full share of the profits
and full payments to which they are entitled under the insurance
contracts; the plaintiff also claims that The Phoenix Insurance does
not fulfill its reporting and disclosure obligations towards
policyholders regarding their policies
and rights. The petition for approval of the claim as a class action lawsuit
continues to be heard in court.
It should be noted that the plaintiff stated that a similar motion
for approval of a claim as class action, which was filed against
another insurance company, had recently been approved.

35. July 2019
Tel Aviv District Court
The Phoenix Insurance and other
insurance companies
Approximately NIS 264.5 million
from all the defendants, of which
approximately NIS 67.5 million is
attributed to The Phoenix
Insurance. The plaintiffs claim that the defendants do not pay their
policyholders interest as required by law in respect of insurance
benefits for the period starting 30 days after the date of delivery of
the claim until the date of actual payment. The Phoenix Insurance has yet to submit its response to the
petition to approve the class action lawsuit.
It should be noted that according to the plaintiffs, this claim is
based on the same cause of action as the class action described in
Section 4 above in the table; however, it was nevertheless
decided to file this claim for the sake of caution only, given the
doubt as to whether the class of plaintiffs seeking the approval of
this motion is included in the previous class action. In light of this,
at
the request of The Phoenix Insurance, in July 2020 the
proceedings in this claim were delayed until a judgment will have
been rendered in the previous claim.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A.
Class actions -
petitions to approve lawsuits as
class actions and lawsuits approved as class actions (cont.)

------------------------------------------------------------------------------------------------------------------- -- ---------

No. Date,1 court,2 defendants and claim
amount3 Main arguments Details

36. May 2019
Nazareth Magistrate Court
The Phoenix Insurance
The amount of the claim was not
estimated. According to the
plaintiff, this claim deals with The Phoenix
Insurance's failure to pay in full insurance benefits under the
insurance policy in respect of damage caused to a vehicle, on
the grounds that the ownership class of the vehicle is "leasing
-
sale of a new vehicle with 0 km or formerly" even though
the ownership of the vehicle is not and/or never was of such
ownership class, and the permanent owner of the vehicle's
license as "Owner 00" was the first purchaser, who is not the
leasing company. The petition for approval of the claim as a class action
lawsuit continues to be heard in court.

37. August 2019
Central District Court
The Phoenix Insurance and other insurance
companies
The claim amount was not estimated, but it
was stated that it was NIS 1 million or
more. The claim is that in insurance polices covering mechanical
engineering equipment the defendants determine the value of
the equipment for the purpose of determining the premium
according to the value of new equipment, disregarding the
age of the equipment; however, in the event of total loss of
equipment the defendants pay the policyholders insurance
benefits in accordance with the equipment's actual value
upon the occurrence of the insurance event, taking into
consideration the age of the equipment. The petition for approval of the claim as a class action
lawsuit continues to be heard in court.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim
amount3 Main arguments Details

38. August 2019
Central District Court
The Phoenix Insurance and other insurance
companies
The claim amount was not estimated, but it
was stated that it was in the tens of millions of
shekels or more. The plaintiffs claim that in case of vehicle theft or total loss as a result of an
accident, the defendants refuse to reimburse policyholders for the proportionate
share of the insurance premiums (the premium) paid for service contracts (road
recovery services, windscreen repair, towing, etc.) in respect of the period
subsequent to the theft or total loss, despite the fact that the service contract is
cancelled and the risk it covers no longer exists. The petition for approval of the
claim
as a class action lawsuit
continues to be heard in court. A
pre-trial hearing is scheduled for
July 19 2021.
In February 2020, the position of the
Capital Market, Insurance and
Savings Authority was submitted,
which is not in line with the
plaintiffs' position.

39. December 2019
Central District Court
PassportCard Israel General Insurance Agency
(2014) (hereinafter: "PassportCard") and The
Phoenix Insurance
The amount of the claim was not estimated. According to the plaintiff, the defendants sell travel insurance without informing
their customers -
at the time of issuing the insurance policy -
about the fact that
the "search and rescue" component can be excluded if it is not required by the
customers;
the plaintiff also claims that the defendants do not inform customers
about price changes they make in insurance policies' components; furthermore,
the defendants do not inform customers in a clear manner about the right to
reimbursement of a proportionate share of the insurance premiums in the event
that the actual trip is shorter than planned, and in the event that the insurance
period is shortened for any reason whatsoever (inlcuding due to cancellation of
the insurance policy).
The plaintiff also claims that even when the defendants reimburse insurance
premiums to policyholders who shortened their travel period and at the same
time also shortened the insurance period for any reason whatsoever, they do not
reimburse the full insurance premium for the shortened insurance period,
contrary to law and the insurance policy. The parties are in a mediation
procedure.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and
claim amount3 Main arguments Details

40. January 2020
Central District Court
The Phoenix Insurance, other
insurance companies and a road
recovery and towing services
company. The plaintiff claims that, in cases where vehicles' windscreens broke, the
defendants had provided and still provide alternative windscreens, which do not
meet Israeli standards and
are not manufactured by the same maker as the car;
by doing so, the defendants allegedly breach their obligations under the insurance
policies and coverage contracts. The petition for approval of the claim as a class
action lawsuit continues to be heard in court.

The claim amount was not estimated
but it was stated that it significantly
exceeds NIS 2.5 million.

41. February 2020
Central District Court
The Phoenix Insurance
The claim amount was not estimated,
but it was stated that it is in the
millions of shekels
or more. The plaintiff claims that starting in early 2016 or thereabouts, The Phoenix
Insurance ceased to fulfill its obligation in health insurance policies marketed prior
to February 1 2016, in which it undertook to provide insurance coverage, at no
additional cost, to all children born to the principal policyholder (starting with the
fourth child), until they reach the age of 21. The parties are in a mediation procedure.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A.
Class actions -
petitions to approve
lawsuits as class actions and lawsuits approved as class actions
(cont.)

------------------------------------------------------------------------------------------------------------------------------

No. Date,1 court,2 defendants
and claim amount3 Main arguments Details

42. February 2020
Tel Aviv Regional Labor Court
The Phoenix Insurance
No less than NIS 25 million. The claim is that The Phoenix Insurance refuses to pay its life
insurance policyholders the benefit they are entitled to in
respect of the first month after the end of the insurance
period (the first month of their retirement). The petition for approval of the claim as a class action lawsuit continues
to be heard in court.

43. February 2020
Central District Court
PassportCard Israel General
Insurance Agency (2014)
(hereinafter: "PassportCard") and
The Phoenix Insurance
NIS 6.125 million. The claim is that the defendants violate the provisions of the
travel insurance policy, since when an insurance event occurs
to a policyholder and insurance benefits are claimed in
respect of expenses of a person who travelled with the
policyholder or accompanied him/her on their trip, the
defendants deduct from the insurance benefits double the
deductible -
one for the policyholder and the other for another
person covered by the insurance, i.e. the policyholder or
person who travelled with the policyholder or the person who
accompanied him/her. The petition for approval of the claim as a class action lawsuit continues
to be heard in court.

The plaintiff also claims that the defendants violate various
provisions of insurance circulars regarding the claim filing
form, the data included therein, receiving a copy thereof; the
plaintiff further claims that the defendants refrain from
informing policyholders who file claims of their right to obtain
a copy of the decision made regarding their claim and/or
appeal against the decision to various parties, nor do they
inform policyholders of the period of time they have to do so.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

o. Date,1 court,2 defendants and
claim amount3 Main arguments Details

44. February 2020
Tel Aviv Regional Labor Court (the
hearing was transferred from the Tel
Aviv District Court)
Halman Aldubi Provident and Pension
Funds Ltd.
NIS 335 million (or alternatively, NIS
58 million or NIS 36 million). The claim is that Halman Aldubi allegedly violated its duty to the plaintiff
and to all beneficiaries in the provident funds of Halman Aldubi, of
deceased planholders, and any planholder of the Halman Aldubi provident
funds with whom contact was lost, to locate and inform the said
beneficiaries, as well as the planholders with whom contact was lost, that
they are entitled to funds in the Halman Aldubi funds, on the dates set
forth to that effect in the Supervision of Financial Services Regulations
(Provident Funds) (Locating Planholders and Beneficiaries), 2012, in the
period beginning on January 1 2013 until the date of the ruling in the
lawsuit. Halman Aldubi has not yet filed its response to the
amended approval petition filed by the plaintiff.
A hearing on the petition to approve the lawsuit as a
class action is scheduled for February 3 2022.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

The petitions to approve claims as class actions listed in Sections 45-47 below were filed following the coronavirus pandemic which broke out in March 2020. The petitions were submitted in the fields of motor, home and business (employers' liability and third parties) insurance; the plaintiffs argue in these motions that insurance companies in general and The Phoenix Insurance in particular should reimburse policyholders for premiums paid during the period in which restrictions were in place due to the coronavirus pandemic in view of the reduced insurance risk in these fields during that period.

45. April 2020
Tel Aviv District Court
The Phoenix Insurance, other insurance companies
and the managing corporation of the Compulsory
Motor Insurance Pool (the "Pool") Ltd.
Approximately NIS 1.2 billion of all the defendants,
of which NIS 145 million is attributed to The Phoenix
Insurance or, alternatively, NIS 719 million of all the
defendants, of which NIS 113 million is attributed to
The Phoenix Insurance. The subject matter of the lawsuit is that the defendants
unjustly profited,4 allegedly, by failing to reduce car insurance
premiums (for compulsory and/or comprehensive and/or third
party policies) during the mobility restrictions imposed due to
the coronavirus pandemic. This was done, argued the plantiffs,
despite a decrease in mileage travelled and the level of risk to
which the defendants are exposed. The Phoenix Insurance has yet to submit its
response to the petition to approve the class action
lawsuit.

----- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

⁴ The petition to approve the claim as a class action includes two petitions to approve claims as class actions filed against The Phoenix Insurance and other defendants, which were merged into a single claim in February 2021 by the Tel Aviv District Court (see Note 42(a) (1) in Sections 42 and 44 of the class actions table in the Company's financial statements as of December 31 2020, published on March 25 2021 (Ref. No. 2021-01-044709).

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

46. April 2020
Tel Aviv District Court
The Phoenix Insurance and other insurance
companies
Approximately NIS 886 million of all the defendants,
approximately NIS 107 million is attributed to The
Phoenix Insurance. The argument is that the defendants must
reimburse premiums they overcharged
policyholders in motor and home insurance, due
to a decrease in the risk they are exposed to as a
result of the restrictions imposed following the
coronavirus pandemic, which led to a decline in
trips and a decline in bodily harm and damage to
property. The Phoenix Insurance has yet to submit its response to the
petition to approve the class action lawsuit.
On February 2021, the court ruled that the petition to approve
the claim as a class action in relation to motor insurance was
dismissed and will continue to be heard in relation to home
insurance.
On April 25 2021, the plaintiff filed an appeal with the Supreme
Court against the decision regarding the dismissal of the petition
to approve the claim as a class action regarding car insurance.

47. April 2020
Haifa District Court
The Phoenix Insurance and other insurance
companies
Approximately NIS 81 million of all the defendants,
of which approximately NIS 13 million is attributed
to The Phoenix Insurance. The plaintiff claims that the defendants
overcharged insurance premiums in their
employer liability insurance and third-party
insurance (as part of business insurance
policies), despite the drop in the number of
employees, suppliers, customers, etc. who attend
businesses due to the coronavirus pandemic and
the restrictions imposed as a result thereof,
which constitutes is a material decrease in the
risk to which the defendants are exposed. An appeal hearing is scheduled for May 22 2022.
The petition for approval of the claim as a class action lawsuit
continues to be heard in court.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

48. May 2020
Tel Aviv District Court
Phoenix Excellence Pension and Provident Funds
Ltd. and other management companies
The claim amount was not estimated, but it was
stated that it is estimated, at a minimum, in the
hundreds of millions of shekels. According to the plaintiffs, the claim deals with
the defendants' classifying some of the
contributions transferred to an advanced
education fund on behalf of their customers as
taxable provisions, even though they are not
taxable. Phoenix Excellence filed its response to the petition for approval
of the claim as a class action lawsuit as well as a motion for
leave to file a third-party notice against the State -
the Israel
Tax Authority. A decision is yet to be issued on the request.
A pre-trial hearing is scheduled for July 11 2021.

49. May 2020
Tel Aviv District Court
Halman Aldubi Provident and Pension Funds Ltd.
and other management companies and
additional
management companies
The claim amount was not estimated, but it was
stated that it is estimated, at a minimum, in the
hundreds of millions of shekels. According to the plaintiffs, the claim deals with
the defendants' classifying some of the
contributions transferred to an advanced
education fund on behalf of their customers as
taxable provisions, even though they are not
taxable. Halman Aldubi filed its response to the petition for approval of
the claim as a class action lawsuit as well as a motion for leave
to file a third-party notice against the State -
the Israel Tax
Authority. A decision is yet to be issued on the request.
A pre-trial hearing is scheduled for July 11 2021.
It should be noted that a similar petition to approve a claim as
class action was filed against Phoenix Excellence (see Section
48 above in the table).

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

50. June 2020
Tel Aviv District Court
PassportCard Israel General Insurance Agency
(2014) (hereinafter: "PassportCard") and The
Phoenix Insurance
At least NIS 10 million. According to the plaintiff, the claim deals with
non-payment of insurance benefits in respect of
cancellation of a trip due to a pandemic (the
coronavirus pandemic) under travel insurance
that the plaintiff purchased through
PassportCard. The Phoenix Insurance has yet to submit its response to the
petition to approve the class action lawsuit.

51. June 2020
Tel Aviv Regional Labor Court
The Phoenix Insurance
The amount of the claim was not estimated. According to the claim, after a policyholder
passes away, The Phoenix Insurance links the
funds accrued in the policy to the consumer price
index, instead of linking them to the investment
track selected by the policyholder, as it
previously did. The petition for approval of the claim as a class action lawsuit
continues to be heard in court. A hearing is scheduled for
November 15 2021.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A.
Class actions -
petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

---------------------------------------------------------------------------------------------------------------- ---------

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

52. June 2020
Central District Court
The Phoenix Insurance and another insurance
company
Approximately NIS 10.5 million for each defendant. According to the claim, the defendants
overcharge customers in loan agreements they
enter into with their customers; overcharging
takes place due to a one-way linkage
mechanism, which is in place under those
agreements, whereby if the CPI increases above
the base CPI, the defendants collect the linkage
differences due to the increase; however, if the
CPI decreases below the base index, they do not
credit their customers for the said decrease. The petition for approval of the claim as a class action lawsuit
continues to be heard in court.

53. July 2020
Haifa Magistrate Court
PassportCard Israel General Insurance Agency
(2014) (hereinafter: "PassportCard") and The
Phoenix Insurance
NIS 1.84 million. According to the claim, when travel insurance
benefits are paid late, the defendants do not pay
interest in respect
of the delay; the plaintiff also
claims that the defendants usually pay the
insurance benefits according to the exchange
rate on the day of the insurance event rather
than the exchange rate on repayment date. In
addition, it was argued that the disclosure
duty
regarding the deductible and the limitation of the
insurer's liability with regard to the "winter
sports" component is violated as part of a
representation made prior to entering into the
insurance contract. The Phoenix Insurance has not yet submitted its response to
the motion to approve the claim as a class action, and on
January 10 2021, it submitted a motion for stay of proceedings
until a final decision has been made in connection with the class
action outlined in Section 4 above in the table.
A decision has not yet been issued in connection with the stay
of proceedings motion and a hearing was scheduled for October
11 2021.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim
amount3 Main arguments Details

54. July 2020
Central District Court
The Phoenix Insurance and other insurance
companies
About 1.9 billion of all defendants, with the
share of each of the defendants being in
accordance with its market segment;
according to the plaintiffs, The Phoenix's share
is approximately 19%. According to the claim, the defendants must charge reduced
insurance premiums in cases of insurance policies with exclusions
due to an existing medical condition compared to policies in which
no such exclusion is present, since exclusions mitigate the
defendants' insurance risk. The Phoenix Insurance submitted its response to
the petition for approval of the claim as a class
action lawsuit. A pre-trial hearing is scheduled for
July 1 2021.

.55 September 2020
Tel Aviv District Court (the hearing was
transferred from the Tel Aviv Regional Labor
Court)
Phoenix Excellence Pension and Provident
Funds Ltd.
No estimate was provided for the claim
amount. The subject matter of the lawsuit, according to the plaintiff, is the
following: provision of incorrect statements and/or incorrect
calculations of the linkage differences credited to planholders;
incorrect calculations and presentation of real profits; incorrect
recording of deposits, causing the profits in respect thereof to be
taxed unlawfully; causing pecuniary damage to planholders due to
failure to monitor employers inadequate contributions and failure
to require them to complete such contributions, whether by
sending appropriate notices to employers and planholders or by
making up the difference by the fund itself; and recording deposit
dates that are different than the actual ones. Excellence Gemel has not yet submitted its response
to the petition for approval of the claim as a class
action lawsuit.
On March 3 2021, at the request of Excellence
Gemel, the Court transferred the petition for
approval of the claim as a class action
lawsuit to the
Tel Aviv District Court and the panel which heard a
similar petition for approval of the claim as a class
action lawsuit that was filed against Excellence
Gemel (see Section 48 above in the table).

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

56. September 2020
Tel Aviv District Court
The Phoenix Insurance
NIS 92.7 million. According to the claim, The Phoenix Insurance does not pay
policyholders insured under a long-term care policies the full
amount due to them under their policies, since it offsets these
amounts against proceeds received from the National Insurance
Institute; it is also claimed that The Phoenix Insurance does not
indemnify policyholders for certain medical treatments. The petition for approval of the claim as a class
action lawsuit continues to be heard in court.

57. September 2020
Central District Court
The Phoenix Insurance and another insurance
company
NIS 84 million from all the defendants, of which
NIS 67.2 million is attributed to The Phoenix
Insurance (a total of NIS 16.8 million in respect of
critical illness insurance and a total of NIS 50.4
million in respect of permanent health insurance). According to the claim, the defendants acted in violation of the
provisions of critical illness insurance policies when they continued
to charge policyholders the full amount of the monthly premium
even after the first insurance event had occurred.
It was also alleged against The Phoenix Insurance that contrary to
its obligations, it charges its policyholders a monthly PHI insurance
premium, even after the period of insurance coverage has ended. The Phoenix Insurance has yet to submit its
response to the petition to approve the class
action lawsuit. A pre-trial hearing is scheduled
for October 28 2021.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

58. October 2020
Tel Aviv District Court
The Phoenix Insurance
It is noted that the amount of the claim cannot be
estimated accurately for all groups as defined in the
claim; however, it is noted that the amount of the
claim in relation to the cosmetic surgery cause of
action is NIS 7.53 million. According to the plaintiff, The Phoenix Insurance does not link
the liability limits in its health insurance policies to the Consumer
Price Index, thereby preventing policyholders from obtaining full
recovery of their damages; the plaintiff also claims that The
Phoenix Insurance does not provide insurance coverage to
policyholders, claiming that the procedure in question is a
cosmetic surgery, thereby breaching the provisions of the
insurance contract; the plaintiff further claims that The Phoenix
Insurance does not provide fair disclosure of the definition of
cosmetic surgery and of the fact that it is excluded from the
policy. The Phoenix Insurance has yet to submit its
response to the petition to approve the class action
lawsuit. A hearing date has not yet been scheduled.

59. November 2020
Tel Aviv District Court
PassportCard Israel General Insurance Agency
(2014) (hereinafter: "PassportCard") and The
Phoenix Insurance
The amount of the claim was not estimated. According to the plaintiff, in the event of a flight cancellation,
The Phoenix Insurance conditions the payment of insurance
benefits upon a onerous condition whereby the policyholder is
required to present an official confirmation on the flight
cancellation from the airline; the plaintiff claims that insurance
benefits are not paid due to a concealed, unlawful reason,
whereby the policy only covers the cancellation of scheduled
flights. By doing so, The Phoenix Insurance allegedly sold a
product that has no value and does not cover the flight
cancellation risk. The Phoenix Insurance has yet to submit its
response to the petition to approve the class action
lawsuit. A pre-trial hearing is scheduled for July 18
2021.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

60. December 2020
Haifa Magistrate Court
The Phoenix Insurance
NIS 1.75 million According to the plaintiff, who is insured in a health insurance policy
comprising of a list of surgical procedures, The Phoenix Insurance
does not pay insurance benefits in respect of invasive surgical
procedure involving a further medical procedure to policyholders
who took out the insurance before 2014. The Phoenix Insurance has yet to submit its
response to the petition to approve the class
action lawsuit. A pre-trial hearing is scheduled
for September 14 2021.

61. December 2020
Central District Court
The Phoenix Insurance
The aggregate claim amount was not estimated
but it was stated that it exceeds NIS 2.5 million. According to the plaintiff, The Phoenix Insurance allegedly does not
indemnify its policyholders in motor insurance policies relating to
vehicles other than private and commercial cars weighing up to 3.5
tons (such as trucks, taxis, etc.), in respect of the damage caused
to their vehicle due to the insurance event -
which, the plaintiff
claims, is in breach of the policy and the law. It is further claimed
that The Phoenix Insurance does not provide its policyholders with
an appraiser's report, which includes an estimate of the impairment
to the vehicle's value due to the insurance event nor its manner of
calculation. The Phoenix Insurance has yet to submit its
response to the petition to approve the class
action lawsuit. A pre-trial hearing is scheduled
for October 14 2021.

NOTE 7 - CONTINGENT LIABILITIES (cont.)

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

62. February 2021
Central District Court
The Phoenix Insurance
No estimate was provided for the claim amount,
but it was stated that the damage exceeds NIS 2.5
million. According to the plaintiff, the claim deals with the increasing of
insurance premiums by more than 75% than the agreed premiums
in life, long-term care, and PHI insurance policies taken out as part
of a special deal for members of the Israel Bar Association (and
potentially in other insurance policies) in 2016, without informing
policyholders, obtaining their consent and providing them with any
explanations. The Phoenix Insurance has yet to submit its
response to the petition to approve the class
action lawsuit. A pre-trial hearing is scheduled for
October 14 2021.

63. March 2021
Tel Aviv District Court
The Phoenix Insurance and other insurance
companies
Approximately NIS 79 million from all defendants The subject matter of the claim, according to the plaintiffs, is that
the defendants refuse to pay for the policyholders' expenses for the
purchase of medical cannabis, contrary to the provisions of the
policy to cover drugs excluded from the Healthcare Services Basket,
and since medical cannabis is recognized for medical use in Western
countries. The Phoenix Insurance has yet to submit its
response to the petition to approve the class
action lawsuit; a hearing date has not yet been
scheduled.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and
claim amount3 Main arguments Details

64. March 2021
Central District Court
The Phoenix Insurance
No estimate was provided for the
claim amount, but it was stated that
the damage exceeds NIS 2.5 million. The subject matter of the claim, according to the plaintiff, is that The
Phoenix Insurance allegedly unlawfully rejects claims by its
policyholders in "personal accident" policies to pay for hospitalization
at a "non-general hospital", claiming that a "hospital", as defined in
the policy, is a medical institution whose underlying meaning is a
"general hospital only". The Phoenix Insurance has yet to submit its response to the
petition to approve the class action lawsuit. A pre-trial
hearing is scheduled for December 21 2021.

65. April 2021
Central District Court
The Phoenix Insurance
Approximately NIS 36.25 million. The subject matter of the claim, according to the plaintiff, is failure
to reduce management fees for a savings policy, contrary to the
agreement between the policyholders and The Phoenix Insurance. The Phoenix Insurance has yet to submit its response to the
petition to approve the class action lawsuit. A pre-trial
hearing is scheduled for January 26 2022.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

A. Class actions - petitions to approve lawsuits as class actions and lawsuits approved as class actions (cont.)

No. Date,1 court,2 defendants and claim amount3 Main arguments Details

66. April 2021
Central District Court According to the plaintiffs, when using the defendants' digital
services (while browsing their personal accounts), customers'
private, personal and confidential information is transferred to third
parties without the customers' consent, violating their privacy. The Phoenix Insurance has yet to submit its
response to the petition to approve the class
action lawsuit. A hearing date has not yet been
scheduled.

The Phoenix Insurance, banks, investment houses,
credit card companies and other insurance
companies

The damage was not estimated but it was stated
that it amounts to millions of shekels.

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

B. Concluded claims*

No. Date,1 court,2 defendants and claim
amount3 Main arguments Details

1. May 2020
Tel Aviv District Court
Excellence Gemel & Hishtalmut Ltd.
(currently: Phoenix Excellence Pension and
Provident Funds Ltd.) and additional
insurance companies and management
companies The claim is that the Law Enforcement and Collection
Authority overcharges those who submit foreclosure
applications in respect of financial instruments managed
by the defendants; overcharging is allegedly carried out
through an automated system and amounts overcharged
are transferred to the defendants. On April 7 2021, the Court handed down a decision to strike the
petition to approve the claim as a class action.

2. The amount of the claim was not estimated.
May 2020
Tel Aviv District Court
Halman Aldubi Provident and Pension Funds
Ltd. and additional insurance companies
and management companies
The amount of the claim was not estimated. The claim is that the Law Enforcement and Collection
Authority overcharges those who submit foreclosure
applications in respect of financial instruments managed
by the defendants; overcharging is allegedly carried out
through an automated system and amounts overcharged
are transferred to the defendants. On April 7 2021, the Court handed down a decision to strike the
petition to approve the claim as a class action.
It should be noted that a similar petition to approve a claim as
class action was filed and withdrawn against Phoenix Excellence
(see Section 1 above in the table).

¹ The date on which the petition for approval of the claim as a class action lawsuit was originally filed.

² The court with which the petition for approval of the claim as a class action lawsuit was originally filed.

³ The claim amount as assessed (if assessed) by the plantiff(s) in the petition for approval of the claim as a class action lawsuit.

^* For additional claims concluded between January 1 2021 and March 25 2021, please see Note 42(a)(2), Sections 10 and 11 of the table of concluded claims in the Company's financial statements as of December 31 2020, published on March 25 2021 (Ref. No. 2021-01-044709).

C. Legal Proceedings

Set forth below is a description of legal and other proceedings against the Group. For proceedings where, in the opinion of management - which is based, among other things, on the legal opinion it has received - it is more likely than not that the Group's defense claims will be allowed and the proceeding will be dismissed, no provision was included in the financial statements.

For proceedings where it is more likely than not that the Group's defense claims will be dismissed, in whole or in part, the financial statements include provisions to cover the exposure estimated by the Group. In management's opinion, which is based, among other things, on legal opinions it received, the financial statements include adequate provisions, where provisions were required, to cover the exposure estimated by the Group.

On November 11 2020, an insurance agency filed a lawsuit in the amount of approximately NIS 17.6 million against The Phoenix Insurance and nine other defendants, including an agency which is part of The Phoenix Group, alleging misuse of the plaintiff's trade secrets and list of customers. It should be noted that the plaintiff had previously filed a motion for a temporary injunction in respect of the subject matter of the claim - and the motion was dismissed. The lawsuit continues to be heard in court.

On December 30, 2020, a lawsuit was filed against Excellence Nessuah Services Ltd. ("Excellence") and Ms. Hannah Hollander by OSR R&D Israel (the "Plaintiff" or "OSR") for a restraining order and financial relief in the amount of NIS 5,167,962, with the Tel Aviv District Court, claiming that Excellence violated the lease agreement with it. Excellence, on the other hand, demanded that the plaintiff evict the leased premises since it violated the terms of the lease, including failure to pay rent on time. The plaintiff rejected the claim, and Excellence filed an eviction notice against OSR with the Magistrates Court. On May 4 2021, the Court ruled that the hearing of the OSR claim will take place in conjunction with the hearing of the eviction claim filed by Excellence, on June 14 2021.

On January 29 2017, Pilat Group Ltd. (hereinafter "Pilat Group") and Pilat Holdings (1986) Ltd. (jointly, - "Pilat Group" and/or the "Plaintiffs") filed a lawsuit with the District Court, against Halman Aldubi Provident and Pension Funds Ltd. (by virtue of its merger with Hadas Arazim Provident Funds Ltd. on April 30 2013), and against 17 other defendants, including Oracle Solutions Ltd. (hereinafter - "Oracle"). The main arguments of the claim was that some of the defendants joined Oracle in purchasing shares of the Pilat Group, constituting approximately 17.9% of the voting rights in Pilat Group (hereinafter - the "Oracle Group"), and that Hadas Provident joined forces with the Oracle Group to acquire control of Pilat Group, such that Oracle would hold 20% of the voting rights, and Hadas Provident - approximately 17%, while obtaining the approval of the Israel Securities Authority (ISA) that the Oracle Group and Hadas Provident not be considered "joint holders" under the Securities Law, 1968. At the same time, the plaintiffs claim, data and documents regarding collaboration between the parties were concealed from the ISA. In addition, allegations were made regarding a series of appointments and interested party transactions made in Pilat Group in violation of the law, which contributed significantly to the collapse of Pilat Group.

C. Legal Proceedings (cont.)

In the statement of claim, the Court is requested to order the defendants, jointly and severally, to compensate the plaintiffs for the damage caused to them, according to the claim, due to the impairment of Pilat Group's value, in the total amount of NIS 35.9 million. The lawsuit continues to be heard in court.

The Group is a party to legal and other proceedings, which are not insurance claims, including, among other things, claims made by customers, former customers, agents and various third parties in immaterial amounts and for a total amount of approximately NIS 27.9 million. The causes of action against the Group in these proceedings are different.

D. Other Proceedings

On July 13 2020, following an audit conducted by the Capital Market Authority regarding marketing phone calls held in respect of personal accident insurance, taking place between September 1 2016 and November 30 2017, The Phoenix Insurance received a notice from the Capital Market Insurance and Savings Authority to the effect that it intends to impose a NIS 8 million monetary sanction on the Company due to alleged violations identified in the audit (hereinafter: the "Notice"). The Phoenix Insurance submitted its written response to said Notice, and on October 28 2020, a hearing was held before the Authority. On May 9 2021, the Capital Market, Insurance and Savings Authority decided to impose a monetary sanction of NIS 4.875 million on The Phoenix Insurance.

On October 13 2020, the Israel Securities Authority (hereinafter: the "ISA") notified Excellence Nessuah Brokerage Services Ltd. that a request to impose a monetary sanction on Excellence Nessuah had been submitted to the Monetary Sanctions Committee following an audit conducted by the ISA from November 2018 to May 2019 in connection with issues related to the prohibition of money laundering. In January 2021, Excellence Nessuah submitted its written position to the ISA. The committee has yet to discuss the position.

E. Complaints

Complaints are filed against the Group from time to time, including complaints to the Commissioner of the Capital Market, Insurance and Savings (hereinafter: the "Commissioner") in relation to policyholders' rights under insurance policies and/or the law. These complaints are handled on an ongoing basis by the Group's Public Complaints Department. The Commissioner's decisions with regard to these complaints, to the extent that a decision has been made in respect thereof, are sometimes issued as sweeping decisions relating to a group of policyholders. Before issuing a final version of his decisions, the Commissioner usually issues a draft decision.

Furthermore, as part of the Commissioner's inquiries with the group, following complaints and/or audits on his behalf, demands are made from time to time to receive various data regarding the Group's handling of insurance policies in the past and/or a demand to reimburse funds to groups of policyholders and/or other guidelines. ----

E. Complaints (cont.)

In addition, the Commissioner has the power, among other things, to impose monetary sanctions on the Group in accordance with the data that was and/or will be transferred thereto following inquiries as described above. In addition to the petitions to approve lawsuits as class actions filed against the Group and the legal and other proceedings, there is a general exposure, which cannot be assessed and/or quantified, due to, among other things, the complexity of the services provided by the Group to its policyholders. The complexity of these services inevitably leads to interpretive claims and other claims due to information gaps between the Group and third parties to the insurance contracts in connection with a long list of commercial and regulatory terms. This exposure is reflected, among other things, in the areas of pension savings and long-term insurance, including health and long-term care insurance, in which the Group operates. Insurance policies in these areas of activity are assessed over many years in which policies, regulation and legislation change and new court rulings are issued. These changes are implemented by automated systems that undergo frequent changes and adjustments. The complexity of these changes and the application of the changes over many years lead to an increased operational exposure. In addition, allowing new interpretations for the provisions of insurance policies and long-term pension products sometimes affects the Group's future profits in respect of its existing portfolio, in addition to the exposure embodied in claims for compensation for customers in respect of past activity.

It is impossible to anticipate the types of claims that will be raised in this area or the exposure arising from these and other claims in connection with insurance contracts - claims which are raised through, among other things, the procedural mechanism set forth in the Class Actions Law.

In addition, some of the Group's products have long terms and are particularly complex in light of the various legislative arrangements both in the field of product management and in the field of taxation, attribution of contributions, investment management, the policyholder's employment status, his contributions and more.

The Wage Protection Law, 1958 imposes a liability on the Group's institutional entities, in accordance with the circumstances specified in the law, in respect of employers' debts to the institutional bodies, where such debts have not been repaid on time. The Group is in the process of improving the data on employers' debts and policyholders' rights, during the course of which lawsuits were filed against employers and the debts of other employers were rescheduled. Once this process is completed, the Group will complete the handling of employers' debts in accordance with the provisions of the law.

F. Summary table

The following table summarizes the amounts claimed in pending petitions to approve lawsuits as class actions, claims approved as class actions and other material claims against the Group, as noted by the plaintiffs in the statements of claim filed on their behalf. It is hereby clarified that the amounts claimed do not necessarily reflect the amounts of exposure assessed by the Group, since these are assessments on behalf of the plaintiffs which will be resolved as part of the legal proceedings. It is further clarified that the table below does not include proceedings that have been concluded, including proceedings that concluded after a compromise agreement was approved in respect thereof.

Type No. of
claims Amount
claimed in NIS
thousand
(unaudited)

Claims approved as a class actions:

A specific amount was attributed to the Company 4 597,700

The claim pertains to several companies and no
specific amount was attributed to the Company 1 225,200

The amount of the claim was not specified - -

Pending petitions to approve lawsuits as class actions:

A specific amount was attributed to the Company 27 4,503,654

The claim pertains to several companies and no
specific amount was attributed to the Company 8 3,825,000

The amount of the claim was not specified 26 -

Other material claims:

A specific amount was attributed to the Company 1 5,167

The claim pertains to several companies and no
specific amount was attributed to the Company 1 35,900

The amount of the claim was not specified - -

Claims and other requirements 26 27,895

The total provision amount in respect of class actions, legal proceedings and others, filed against the Group as specified above as of March 31 2021 and December 31 2020, amounted to approximately NIS 183,274 thousand (of which a total of approximately NIS 3,970 thousand is in respect of concluded class actions) and approximately NIS 185,444 thousand, respectively.

NOTE 8 - SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

A. Changes in estimates and principal assumptions used to calculate the insurance reserves:

Effect of interest rate on pension reserves

A decrease (increase) in long-term interest rates may increase (decrease) the paid pension reserve and the supplementary pension reserve is deferred due to the use of a lower (higher) discount rate, to the extent that a change in the discount rate is required due to changes in market interest rates.

In addition, the supplementary reserve for deferred pensions is affected by future income expectations (using K factor), so that the decrease (increase) in interest rates may decrease (increase) the expected future income, and if according to the new projection it will be impossible to continue funding the provisions to the reserve, the Company will increase the reserve in order to reduce future provision amounts (or vice versa).

K factor values used by the Company

March 31

2021 2020 2020

Unaudited

%

In respect of yield-dependent insurance
policies - - -

In respect of yield-dependent insurance
policies 0.85 0.58 0.85

For further details regarding changes in the K factor for the reporting periods, please see Section D below.

Reserve in respect of liability adequacy test (LAT)

The Company tests the adequacy of the reserves for life insurance and LTC and where necessary, increases the reserves. Testing is performed according to the regulatory guidelines and on the basis of actuarial assumptions and a risk-free yield curve plus an illiquidity premium. To the extent that there are changes in these assumptions, the supplement required according to the test will change.

A decrease (increase) in the risk-free interest rate curve and/or in the rate of illiquidity premium will increase (decrease) the supplement for the reserves required according to the LAT test (to the extent that a supplement is required).

Regarding the retrospective application of Insurance Circular 2020-1-5, Amendment of the Provisions of the Consolidated Circular regarding Measurement of Liabilities - Liability Adequacy Test (LAT) (hereinafter – the "LAT Circular "- please see Note 2.DD to the Annual Financial Statements.

NOTE 8 - SIGNIFICANT EVENTS DURING THE REPORTING PERIOD (cont.)

Following is the effect of the main changes described above on retention insurance liabilities:

For the 3 months
ending March 31 For the
year ended
December
31

2021 2020 2020

Unaudited In NIS million Audited

Life insurance segment:

Effect of updating other assumptions on the supplementary
pension reserve and paid pensions (12)

Effect of updating of assumptions on the cancellation rates - - -

Effect of updating assumptions on the expense rates - 5 (54)

Effect of updating assumptions on the mortality rates - - -

Change in the discount rate used in the calculation of the
supplementary retirement pension reserve and paid pensions. 5 44 25

Change in K value - 94 (261)

Total increase (decrease) in liabilities on retention in the
life insurance segment 5 143 (302)

Health insurance segment:
Effect of updating of assumptions on the cancellation rates:

LAT
Other -
- -
- (24)
(43)

Effect of updating assumptions on the expense rates:

LAT
Other -
- (46)
(17) (54)
(12)

Effect of updating assumptions on the mortality and morbidity
rates:

LAT
Other -
- -
- -
-

Change in reserve (LAT) following a change in the discount rate 24 97(*) 173(*)

Change in reserve (LAT) following re-application of illiquidity
premium - - (110)

Total increase (decrease) in liabilities on retention in

health insurance segment 24 34 (70)

P&C insurance segment:

Change in discount rate
Effect of the discount rate applied to National Insurance allowances -
- (11)
- 1
(74)

Total decrease in liabilities on retention in P&C insurance

segment - (11) (73)

Total increase (decrease) in liabilities on retention before
tax 29 166 (445)

Total increase (decrease) in liabilities on retention, after tax 19 109 (293)

(*) This effect includes the effect of classifying the excess value of assets from the life insurance segment to the health insurance segment in the amount of approximately NIS 121 million, with the addition of approximately NIS 47 million from excess value of other non-marketable assets as a result of the first-time application of the LAT Circular and the amendment of the Circular on Allocation of Non-Marketable Assets. For further details, please see the Annual Financial Statements, Note 2.DD.

NOTE 8 - SIGNIFICANT EVENTS DURING THE REPORTING PERIOD (cont.)

B. On January 11 2021, Midroog announced it is reiterating the rating of Series 3 and 4 bonds at Aa3.il, with a stable outlook. On January 31 2021, Midroog announced it has rated the extension of up to NIS 350 million in Series 4 and 5 bonds issued by the Company at Aa3.il, with a stable outlook. For further details, please see the Company's immediate reports dated January 11 2021 (Ref. No. 2021-15-004746) and January 31 2021 (Ref. No. 2021-15-012981).

C. On January 20 2021, Universal Motors Israel Ltd. (hereinafter: "UMI"), a related party, purchased from a third party and as part of an off-floor transaction 12,478,168 ordinary Company shares in consideration for NIS 26 per share - for a total of approximately NIS 324.43 million. Subsequent to the acquisition, UMI will hold 4.9% of the Company's share capital. For additional details see the Company's immediate report dated January 20 2021 (Ref. No. 2021-01-009007).

D. Regarding the acquisition of Halman Aldubi, please see Note 4, Business Combinations, above.

E. Regarding the possibility of selling Ad 120, please see Note 1.E above.

F. On January 31 2021, Ma'alot S&P reiterated The Phoenix Insurance's rating at -ilAA and ilAA+, respectively, with a stable outlook; it rated the extension of Series 4 and 5 bonds in the amount of up to NIS 350 million at -ilAA. For additional details see the Company's immediate report dated January 31 2021 (Ref. No. 2021-15-012963).

G. In February 2021, the Company extended, by NIS 127,384 thousand, registered Series 4 bonds of NIS 1 par value each and NIS 222,616 thousand of NIS 1 par value each registered (Series 5) bonds, which were issued pursuant to the Company's shelf offering report dated February 3 2021 (Ref. No. 2021-01- 013684). The proceeds of the offering were used by the Company for its ongoing needs and those of its subsidiaries, including the acquisition of Halman Aldubi's entire share capital.

H. In February 2021, the Company's Board of Directors approved the adoption of a voluntary reporting policy in English on the English-language MAYA website of the Tel Aviv Stock Exchange, beginning on the date of publication of the Company's annual Financial Statements for 2020. The adoption of the said policy is based, inter alia, on a notice published by the Israel Securities Authority on June 30 2020 - "Notice to Companies: Voluntary Publication of Translations of Reports into English." For further details, please see the Company's immediate report dated February 25 2021 (Ref. No. 2021-01-023287). The Company follows the said policy and on April 22 2021, published its 2020 Periodic Report in English for the first time.

I. On March 10 2021, the Company announced that the agreement for the acquisition of the new pension funds by Meitav Dash Provident was signed; for further details, please see Note 4, Business Combinations, above. For further details, see the Company's immediate reports dated February 23 2021 and March 11 2021 (Ref. Nos. 2021-01-022078 and 2021-01-031812).

J. On March 24 2021, the Company's Board of Directors approved a dividend distribution in the amount of NIS 380 million. The dividend per share of NIS 1 par value is NIS 1.49213. The record date for the distribution is April 5 2021. The dividend will be paid on April 18 2021.

K. The Phoenix Insurance through The Phoenix Capital Raising is considering the issuance of an Additional Tier 1 capital instrument, recognized as regulatory capital under the Economic Solvency Regime, in order to strengthen its capital and improve its solvency ratio. In March 2021, the Board of Directors approved continuing the issuance procedure. The recognition of the instrument as an Additional Tier 1 capital instrument is subject to the approval of the Commissioner of the Capital Market, Insurance and Savings. The issuance amount is expected to be approximately NIS 400 million. The terms and conditions of the instrument, including the redemption period, are in accordance with the provisions of Part B ("Provisions in respect of Equity Capital of Insurance Companies") to Insurance Circular 2020-1-15, "Provisions for Applying Economic Solvency Regime Based on Solvency II for Insurance Companies". The Phoenix Insurance works to obtain the regulatory approvals required for the issuance.

Notes to the Condensed Consolidated Interim Financial Statements as of March 31 2021

NOTE 9 - SIGNIFICANT EVENTS AFTER BALANCE SHEET DATE

A. Following the Company's share buyback plan of up to NIS 100 million as of October 1 2020, the Company purchased a total of 1,704 thousand shares in April and May for 2021, for a total of approximately NIS 49 million. Following these purchases, the Company holds approximately 3,201 thousand of the Company's shares and the plan's current performance rate is 75.86%.

B. On May 26 2021, the Company's Board of Directors approved, after receiving the approval of Compensation Committee, to allocate the employees of the Company and its subsidiaries - some of whom are officers of the Company (including the Company's CEO) as well as some of the Company's service providers (hereinafter - the "Offerees") up to 3,937,000 options, not listed for trading, offered at no cash monetary consideration (offered in consideration for work performed or service rendered to the Company by the Offerees) exercisable into up to 3,937,000 registered ordinary shares of NIS 1 par value each of the Company, out of the Company's reserved shares.

Assuming that all options exercisable under this outline are to be exercised, immediately after exercise thereof and taking into account the issued and paid-up capital of the Company to date, the shares arising from the exercise of the options shall constitute approximately 2.6% of the issued and paid-up capital of the Company and approximately 2.5% of its voting rights (and approximately 1.6% and 1.5%, respectively, on a fully diluted basis). In practice, no allotment will be made to the offerees who will realize the full stock options arising from them, but only shares in an amount that reflects the amount of the monetary benefit inherent in the options.

In accordance with the Board of Directors' decision, out of the amount of 3,937,000 options offered to offerees a total of 88,000 options will be allotted to the Company's CEO. The fair value at the Award Date is calculated based on a appraisal received from an external appraiser who used the binomial model. The average value of one option was estimated at approximately NIS 3.24, and the total value of the options allotted was estimated at that date at approximately NIS 12.8 million.

C. During May 2021, following a military escalation in Israel, rockets were fired into the country over a period of 11 days. During this period, the Company continued to provide full service to its customers. To the best of the Company's knowledge, as of the report publication date, the event does not have a material effect on the Company's performance. In addition, we note that the State of Israel covers property damage, if any.

D. In connection with class actions filed and developments in lawsuits after the balance sheet date, see Note 7 above.

Details of assets for assets and other financial investments

A. Details of other financial investments

As of March 31 2021

Presented
at fair
value
through
profit and
loss Available
for-sale Loans and
receivable
s Total

Unaudited

In NIS thousand

Marketable debt assets (A.1) 119,151 7,271,495 - 7,390,646

Non-marketable debt assets - - 13,524,006 13,524,006

Shares (A.2) 7,791 2,048,579 - 2,056,370

Other (A.3) 581,679 2,908,999 - 3,490,678

Total 708,621 12,229,073 13,524,006 26,461,700

As of March 31 2020

Presented
at fair
value
through
profit and
loss Available
for-sale Loans and
receivables Total

Unaudited

In NIS thousand

Marketable debt assets (A.1) 56,770 7,401,994 - 7,458,764

Non-marketable debt assets - - 13,213,841 13,213,841

Shares (A.2) 2,691 1,381,887 - 1,384,578

Other (A.3) 396,502 2,071,970 - 2,468,472

Details of assets for assets and other financial investments (cont.)

As of December 31 2020

Presented
at fair
value
through
profit and
loss Available
for-sale Loans and
receivables Total

Audited

In NIS thousand

Marketable debt assets (A.1) 108,809 7,942,457 - 8,051,266

Non-marketable debt assets - - 13,231,897 13,231,897

Shares (A.2) 5,860 1,854,613 - 1,860,473

Other (A.3) 604,573 2,595,491 - 3,200,064

Total 719,242 12,392,561 13,231,897 26,343,700

A1. Marketable debt assets

As of March 31 2021

Carrying
amount Amortized
cost

Unaudited

In NIS thousand

Government bonds 4,308,126 4,294,987

Other debt assets:

Other non-convertible debt assets 2,994,773 2,768,550

Other convertible debt assets 87,747 82,677

Total marketable debt assets 7,390,646 7,146,214

Impairments carried to profit and loss (cumulative) 93,385

As of March 31 2020

Carrying
amount Amortized
cost

Unaudited

In NIS thousand

Government bonds 4,343,238 4,346,161

Other debt assets:

Other non-convertible debt assets 3,097,633 3,142,198

Other convertible debt assets 17,893 19,790

Total marketable debt assets 7,458,764 7,508,149

Impairments carried to profit and loss (cumulative) 196,544

Details of assets for assets and other financial investments (cont.)

As of December 31 2020

Carrying
amount Amortized
cost

Audited
In NIS thousand

Government bonds 4,974,270 4,817,279

Other debt assets:

Other non-convertible debt assets 3,008,147 2,597,370

Other convertible debt assets 68,849 49,863

Total marketable debt assets 8,051,266 7,464,512

Impairments carried to profit and loss (cumulative) 98,984

A2. Shares

As of March 31 2021

Carrying
amount Cost

Unaudited

In NIS thousand

Marketable shares 1,738,462 1,308,569

Non-marketable shares 317,908 201,263

Total shares 2,056,370 1,509,832

Impairments carried to profit and loss (cumulative) 186,848

Details of assets for assets and other financial investments (cont.)

As of March 31 2020

Carrying
amount Cost

Unaudited

In NIS thousand

Marketable shares 1,133,724 1,097,592

Non-marketable shares 250,854 155,157

Total shares 1,384,578 1,252,749

Impairments carried to profit and loss (cumulative) 319,849

As of December 31 2020

Carrying
amount Cost

Audited

In NIS thousand

Marketable shares 1,545,485 1,177,687

Non-marketable shares 314,988 185,520

Total shares 1,860,473 1,363,207

Impairments carried to profit and loss (cumulative) 213,115

Details of assets for assets and other financial investments (cont.)

A.3. Other financial investments

As of March 31 2021

Carrying
amount Cost

Unaudited

In NIS thousand

Total marketable financial investments 815,655 753,094

Total non-marketable financial investments 2,675,023 2,124,970

Total other financial investments 3,490,678 2,878,064

Impairments carried to profit and loss (cumulative) 121,315

As of March 31 2020

Carrying
amount Cost

Unaudited

In NIS thousand

Total marketable financial investments 462,075 440,383

Total non-marketable financial investments 2,006,397 1,714,853

Total other financial investments 2,468,472 2,155,236

Impairments carried to profit and loss (cumulative) 105,246

As of December 31 2020

Carrying
amount Cost

Audited
In NIS thousand

Total marketable financial investments 660,178 503,235

Total non-marketable financial investments 2,539,886 1,880,737

Total other financial investments 3,200,064 2,383,972

Impairments carried to profit and loss (cumulative) 116,453

Part 3

Data from the Consolidated Interim Financial Statements

Attributed to the Company

As of March 31 2021 (Unaudited)

Table of Contents

Page

Auditors' Review Report2

Condensed Interim Data on Financial Position3

Condensed Interim Data about Profit and Loss
4

Condensed Interim Data about Comprehensive Income5

Condensed Interim data about Changes in Equity
6-8

Condensed Interim data about Changes in Cash Flows
9-10

Additional Information regarding the Condensed Interim
Standalone Financial Information11

Kost Forer Gabbay & Kasierer Menachem Begin Road 144A, Tel Aviv 6492102

Tel. +972-3-6232525 Fax +972-3-5622555 ey.com

To the Shareholders of The Phoenix Holdings Ltd.

Dear Sir/Madam,

Re: Special report to the review of the separate interim financial information in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970

Introduction

We have reviewed the separate interim financial information disclosed in accordance with Regulation 38D to the Securities Regulations (Periodic and Immediate Reports), 1970 of The Phoenix Holdings Ltd. ("the Company") as of March 31 2021 and for the three months period then ended. The Company's board of directors and management are responsible for the separate interim financial information. Our responsibility is to express a conclusion on the separate interim financial information based on our review.

We did not review the separate interim financial information taken from the interim financial information of investees, the total investment in which amounted to approximately NIS 1,602,529 thousand as of March 31 2021, and the Company's share in of their earnings amounted to approximately NIS 27,467 thousand for the three months period then ended, respectively. The separate interim financial information of those companies was reviewed by other auditors, whose review reports have been furnished to us, and our conclusion, insofar as it relates to the financial information in respect of those companies, is based on the review reports of the other auditors.

Scope of Review

We conducted our review in accordance with Review Standard (Israel) 2410 of the Institute of Certified Public Accountants in Israel, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted pursuant to Israeli GAAP and, as a result, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review and the review reports of other auditors, nothing has come to our attention that causes us to believe that the accompanying separate interim financial information is not prepared, in all material respects, in accordance with Regulation 38D to the Securities Regulations (Periodic and Immediate Reports), 1970.

Tel Aviv, May 26, 2021 Kost Forer Gabbay & Kasierer Certified Public Accountants

Condensed Standalone Interim Financial Information on Financial Position as of March 31 2021

As of

Mar. 31
2021 Mar. 31
2020 Dec. 31
2020

Unaudited Audited

In NIS thousand

Assets

Investments in investees 8,159,355 5,885,860 7,861,266

Loans and capital notes to investees 1,286,069 1,192,756 1,192,107

Total non-current assets 9,445,424 7,078,616 9,053,373

Other financial investments 31,856 37,854 22,986

Current tax assets 1,159 1,163 1,159

Dividend receivable from investees (see Note 2(b)) 338,000 - -

Receivables and debit balances 1,479 841 14,482

Cash and cash equivalents 33,233 71,188 40,270

Total current assets 405,727 111,046 78,897

Total assets 9,851,151 7,189,662 9,132,270

Equity attributed to Company's shareholders

Share capital 309,961 309,951 309,951

Premium on shares and capital reserves 837,324 826,991 833,592

Treasury shares (26,411) - (26,411)

Capital reserves 955,191 316,490 913,036

Retained earnings 5,875,712 4,602,739 5,939,754

Total equity 7,951,777 6,056,171 7,969,922

Liabilities

Non-current liabilities 0 0 0

Bonds 1,414,279 1,004,080 1,082,538

Current liabilities

Bonds 53,371 123,485 36,000

Payables and credit balances 13,869 5,926 5,955

Dividend payable (see Note 2(c)) 380,000 - -

Liabilities in respect of deferred taxes 37,855 - 37,855

Total current liabilities 485,095 129,411 79,810

Total liabilities 1,899,374 1,133,491 1,162,348

Total capital and liabilities 9,851,151 7,189,662 9,132,270

(*) For further details, please see Note 4 to the consolidated financial statements.

The attached additional information is an integral part of the Company's standalone interim financial information.

Eli Schwartz Eyal Ben Simon Benjamin Gabbay

Executive Vice President, CFO Chief Executive Officer Chairman of the Board of Directors

Date of approval of the financial statements - May 26, 2021

Condensed Standalone Interim Financial Information on Comprehensive Income as of March 31 2021

For the three
months ended
March 31 For the
year
ended
December
31

2021 2020 2020

Unaudited

In NIS thousand

Company's share in the profits of investees, net of tax 308,171 (167,584) 1,210,661

Investment income, net and finance income 12,562 7,999 42,353

Income from management fees of investees 750 750 3,000

Total revenue 321,483 (158,835) 1,256,014

General and administrative expenses 1,997 2,304 8,164

Finance expenses 4,082 4,928 40,972

Total expenses 6,079 7,232 49,136

Profit before taxes on income 315,404 (166,067) 1,206,878

Taxes on income - - 37,855

Profit (loss) for the period attributed to the Company's owners 315,404 (166,067) 1,169,023

Condensed Standalone Interim Financial Information on Comprehensive Income as of March 31 2021

For the three
months ended
March 31 For the
year
ended
December
31

2021 2020 2020

Unaudited Audited

In NIS thousand

Profit (loss) for the period 315,404 (166,067) 1,169,023

Other comprehensive income (loss):

Amounts that will be or that have been reclassified to profit or

loss when specific conditions are met

Net change in fair value of financial assets classified as available for sale,
carried to capital reserves

1,663 (4,058) (1,307)

Net change in fair value of financial assets classified as available for sale,
carried to the income statement

- 573 585

Gain on impairment of financial assets classified as available for sale,
carried to the income statement - - 937

The Group's share in other comprehensive income (loss) of investees 38,839 (408,349) 169,838

Total components of income (loss) items, subsequently

reclassified to profit or loss 40,502 (411,834) 170,053

Amounts that shall not be subsequently reclassified to profit or
loss

The Group's share in other comprehensive income of equity-accounted

investees - 1,248 13,621

Other comprehensive income (loss) for the period, net 40,502 (410,586) 183,674

Total comprehensive income (loss) for the period 355,906 (576,653) 1,352,697

Share
capital Premium
and
capital
reserves
in
respect
of
shares Treasury
shares Retained
earnings Capital
reserve
from
transactions
with non
controlling
interests Reserve
from
transaction
with
controlling
shareholder Capital
reserve
from
share
based
payment Revaluation
reserve Reserve
from
translation
differences Capital
reserve
in
respect
of
available
for-sale
financial
assets Total
equity

In NIS thousand

Balance as of January 1
2021 (audited)
Loss for the period 309,951
- 833,592
- (26,411)
- 5,939,754
315,404 (43,622)
- 11,000
- 44,943
- 114,614
- (23,338)
- 809,439
- 7,969,922
315,404

Other comprehensive
income (loss) - - - - - - - - 1,057 39,445 40,502

Total comprehensive
income (loss) - - - 315,404 - - - - 1,057 39,445 355,906

Share-based payment
Transfer from revaluation
reserve in respect of
revaluation of property,
plant, and equipment, at
the depreciation amount - 3,635
- -
- -
554 -
- -
- 2,314
- -
(554) -
- -
- 5,949
-

Exercise of employee
options 10 97 - - - - (107) - - - -

Dividend - - - (380,000) - - - - - - (380,000)

As of March 31 2021
(unaudited) 309,961 837,324 (26,411) 5,875,712 (43,622) 11,000 47,150 114,060 (22,281) 848,884 7,951,777

Share
capital Premium
and
capital
reserves
in
respect
of
shares Retained
earnings Capital
reserve
from
transactions
with non
controlling
interests Reserve
from
transaction
with
controlling
shareholder
In NIS thousand Capital
reserve
from
share
based
payment Revaluation
reserve Reserve
from
translation
differences Capital
reserve
in
respect
of
available
for-sale
financial
assets Total
equity

Balance as of January 1 2020
(audited) 309,951 830,437 4,768,261 (43,622) 11,000 40,047 103,463 (19,926) 635,974 6,635,585

Net income for the period - - (166,067) - - - - - (166,067)

Other comprehensive income (loss) - - - - - - 1,248 5,185 (417,019) (410,586)

Total comprehensive income (loss) - - (166,067) - - - 1,248 5,185 (417,019) (576,653)

Share-based payment - (3,446) - - - 685 - - - (2,761)

Transfer from revaluation reserve in
respect of revaluation of property,
plant, and equipment, at the
depreciation amount - - 545 - - - (545) - - -

As of March 31 2020 (unaudited) 309,951 826,991 4,602,739 (43,622) 11,000 40,732 104,166 (14,741) 218,955 6,056,171

Condensed Standalone Interim Financial Information on Changes in Equity as of March 31 2021

Share
capital Premium
and
capital
reserves
in respect
of shares Treasury
shares Retained
earnings Capital
reserve
from
transactions
with non
controlling
interests Reserve
from
transaction
with
controlling
shareholder Capital
reserve
from
share
based
payment Revaluation
reserve Reserve
from
translation
differences Capital
reserve in
respect of
available
for-sale
financial
assets Total
equity

In NIS thousand

Balance as of
January 1 2020
(audited)
Net income for the
year
Other 309,951
- 830,437
- -
- 4,768,261
1,169,023 (43,622)
- 11,000
- 40,047
- 103,463
- (19,926)
- 635,974
- 6,635,585
1,169,023

comprehensive
income (loss) - - - 290 - - - 13,331 (3,412) 173,465 183,674

Total
comprehensive
income (loss) for
the year
Transfer from
revaluation reserve
in respect of
revaluation of
property, plant,
and equipment, at
the depreciation - - - 1,169,313 - - - 13,331 (3,412) 173,465 1,352,697

amount - - - 2,180 - - - (2,180) - - -

Share-based
payment
Acquisition of
treasury shares -
- 3,155
- -
(26,411) -
- -
- -
- 4,896
- -
- -
- -
- 8,051
(26,411)

Balance as of
December 31 2020
(audited) 309,951 833,592 (26,411) 5,939,754 (43,622) 11,000 44,943 114,614 (23,338) 809,439 7,969,922

Condensed Standalone Interim Financial Information on the Company's Cash Flow as of March 31 2021

For the three
months ended March
31 For the
year
ended
December
31

2021 2020 2020

Appendix Unaudited Audited

In NIS thousand

Cash flows for operating activities

Profit (loss) 315,404 (166,067) 1,169,023

Adjustments required to present cash flows (for) from operating
activities: (a) (295,339) 172,401 (1,163,853)

Net cash from operating activities of the Company 20,065 6,334 5,170

Cash flows from investing activities

Net cash used in investing activities in investees - 12,000 12,000

Investment in a capital note of an investee - (220,000) (220,000)

Sales (acquisitions) of financial investments by the Company, net (6,925) 65,540 83,085

Acquisition of a subsidiary (*) (275,000) - -

Loan to subsidiary (*) (93,633) - -

Net cash used in investing activities (375,558) (142,460) (124,915)

Cash flows for financing activities

Issuance of a bond, less issuance expenses 348,457 217,511 585,433

Repayment of bonds - (88,291) (477,101)

Share buyback by the Company - - (26,411)

Net cash from financing activities 348,457 129,220 81,921

Decrease in cash and cash equivalents (7,037) (6,906) (37,824)

Balance of cash and cash equivalents at beginning of

period 40,270 78,094 78,094

Balance of cash and cash equivalents at end of period 33,233 71,188 40,270

(*) For further details, please see Note 4 to the consolidated financial statements.

Condensed Standalone Interim Financial Information on the Company's Cash Flow as of March 31 2021

For the three
months ended
March 31 For the
year
ended
December
31
2020
Audited

2021
2020

Unaudited

In NIS thousand

Adjustments required to present cash flows (for) from

(a) operating activities:

Items not involving cash flows:

Net (gains) losses on financial investments (282) 323 1,346

Income and expense items not involving cash flows:

Accrued interest and appreciation of bonds 655 (573) 11,289

Income tax expenses - - 37,859

Company's share in the (profits) losses of investees, net (308,171) 167,584 (1,210,661)

Changes in other balance sheet line items, net:

Change in receivables and debit balances 4,871 8,869 (562)

Change in payables and credit balances 7,914 (5,572) (5,543)

Changes in loans to investees (326) 1,770 2,419

Total cash flows from (for) operating activities (295,339) 172,401 (1,163,853)

(b) Material non-cash activities

Dividend declared and not yet paid (*) (380,000) - -

Dividend receivable from subsidiaries (**) 338,000 - -

(*) For further details, please see Note 2.C below.

(**) Does not include repayment of a capital note from The Phoenix Investments; for further details, please see Note 3.A below.

Note 1 - GENERAL

The Interim Standalone Financial Information is presented in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970 and does not include all the information required under Regulation 9C and the Tenth Addendum to the Securities Regulation (Periodic and Immediate Reports), 1970, "Standalone Financial Information of the Corporation". This standalone financial information should be read in conjunction with the standalone financial information as of the date and year ended December 31 2019 and in conjuction with the consolidated condensed interim financial statements as of March 31 2020 (hereinafter: the "Consolidated Financial Statements").

Definitions

The Company - The Phoenix Holdings Ltd.

"Investee companies" - Consolidated companies and companies the Company's investment in which is included, whether directly or indirectly, in the financial statements based on the equity method.

NOTE 2: SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

A. On January 27 2021, the Company's Board of Directors approved a credit line agreement for subsidiary Phoenix Excellence Pension and Provident Funds Ltd. The credit line will be used by Phoenix Excellence Pension and Provident Funds Ltd. according to its needs, for a total of up to NIS 100 million for a period of two years. The credit terms and conditions shall be identical, back to back, in respect of Series 5 Bonds issued by the Company.

B. On March 21, The Phoenix Agencies's Board of Directors approved a dividend distribution in the amount of NIS 138 million. The dividend will be paid on April 11 2021. This dividend is subject to profit tax of approximately NIS 15.5 million. On March 24, The Phoenix Insurance's Board of Directors approved a dividend distribution in the amount of NIS 200 million. The dividend will be paid on April 11 2021.

C. On March 24 2021, the Company's Board of Directors approved a dividend distribution in the amount of NIS 380 million. The dividend per share of NIS 1 par value is NIS 1.49213. The record date for the distribution is April 5 2021. The dividend will be paid on April 18 2021.

D. For other material events during the reporting period, please see Note 8 to the consolidated financial statements.

NOTE 3 - SUBSEQUENT EVENTS

A. On April 12 2021, a total of approximately NIS 67 million in capital notes issued by The Phoenix Investments to the Company was repaid.

B. On May 26 2021, the Company approved an investment in The Phoenix Investments against the issuance of a perpetual capital note in the amount of up to NIS 145 million.

C. For further details regarding subsequent events, please see Note 9 to the consolidated financial statements.

May 26, 2021

To: The Board of Directors of The Phoenix Holdings Ltd. (hereinafter: the "Company") Dear Madam/Sir,

Re: Shelf Prospectus of The Phoenix Holdings Ltd. (hereinafter: the "Shelf Prospectus") published on August 15 2019

We hereby inform you that we agree to the inclusion (including by way of reference) of our reports outlined below in a shelf offering based on the Shelf Prospectus:

Review Report dated May 26 2021, on the Condensed Consolidated Financial Information of The Phoenix Holdings Ltd. as of March 31 2021 and for the three-month period then ended.

Special report dated May 26 on the Standalone Interim Financial Information in accordance with Regulation 9C to the Securities Regulations (Periodic and Immediate Reports), 1970 of The Phoenix Holdings Ltd. of The Phoenix Holdings Ltd. as of March 31 2021 and for the threemonth period ended on that date.

Kost Forer Gabbay & Kasierer Certified Public Accountants

Part 4

Report and Statements regarding the Internal Controls over Financial Reporting and Disclosure

Quarterly Report on the Effectiveness of the Internal Control over Financial Reporting and Disclosure in accordance with Regulation 38C(a):

Management, under the supervision of the Board of Directors of The Phoenix Holdings Ltd. (hereinafter: the "Corporation") is responsible for establishing and maintaining adequate internal control over financial reporting and disclosure in the Corporation.

For this matter, the members of management are as follows:

Eyal Ben Simon, CEO of the Company and The Phoenix Insurance.

Eli Schwartz, Executive Vice President, Chief Financial Officer of the Company and The Phoenix Insurance.

Daniel Cohen, Executive Vice President and Head of Long Term Savings and Life at The Phoenix Insurance

Haggai Schreiber, Executive Vice President, Chief Investment Manager, CEO The Phoenix Investments Ltd.

Dafna Shapira-Layla, Executive Vice President, Head of Health Insurance at The Phoenix Insurance.

Keren Granit, Executive Vice President, Head of Claims System & Head of Customers' Division at The Phoenix Insurance.

Moti Mor, Executive Vice President, Head of General Insurance at The Phoenix Insurance.

Meni Neeman, Executive Vice President, Chief Legal Counsel and Corporate Secretary of the Company and The Phoenix Insurance.

Michal Leshem, Executive Vice President, Chief Internal Auditor.

Amit Netanel, Senior Vice President, Chief Risk Officer of the Company and The Phoenix Insurance.

Ron Shvili, Executive Vice President of The Phoenix Insurance, Chief Technology, IT Systems and Innovation Officer of The Phoenix Insurance.

Raanan Saad, Executive Vice President at The Phoenix Insurance, Head of The Phoenix SMART.

Anat Cohen-Toledano, Executive Vice President at The Phoenix Insurance, Chief Actuary Property and Casualty, The Phoenix Insurance.

Roman Reidman, Executive Vice President at The Phoenix Insurance, Chief Actuary Life and Health.

Erez Orly, Executive Vice President, Head of Human Resources at The Phoenix Insurance.

Orr Harush, Vice President, Chief Of Staff at The Phoenix Insurance.

The internal control over financial reporting and disclosure consists of the Corporation's existing controls and procedures that have been planned by the chief executive officer and the most senior financial officer or under their supervision, or by the equivalent acting officers, under the supervision of the Corporation's Board of Directors, designed to provide reasonable assurance about the reliability of financial reporting and the preparation of the financial statements in compliance with applicable laws, and ensure that all information that the Company is required to disclose in the financial statements its publishes pursuant to law is collected, processed, summarized and reported in a timely manner and according to the format prescribed by law.

Among other things, internal controls include controls and procedures planned to ensure that all information that the Corporation is required to disclose as aforesaid is collected and transferred to the Corporation's management, including the chief executive officer and the most senior financial officer, or the equivalent acting officers, in order to allow decision making on a timely basis with respect to the disclosure requirements.

Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure

Due to its inherent limitations, internal control over financial reporting and disclosure is not designed to provide absolute assurance that misstatements or omissions of information in the financial statements shall be prevented or detected.

The Phoenix Insurance Ltd., a subsidiary of the Corporation, is an institutional entity which is subject to the directives of the Commissioner of the Capital Market, Insurance and Savings in the Ministry of Finance regarding the assessment of the effectiveness of internal controls over financial reporting.

With respect to the internal control of the said subsidiary, the Corporation implements the following provisions:

Institutional Entities Circular 2009-9-10, "Management's Responsibility for Internal Controls over Financial Reporting"; Institutional Entities Circular 2010-9-6, "Management's Responsibility for internal control over financial reporting - Amendment"; Circular 2010-9-7, "internal control over financial reporting - Statements, Reports and Disclosures"; Circular 2012-9-5, "internal control over financial reporting - Statements, Reports, Disclosures and Management's Responsibility for internal control over financial reporting - Amendments"; and Circular 2015-9-15, "internal control over financial reporting - Statements, Reports, Disclosures and Management's Responsibility for internal control over financial reporting - Amendments".

In the quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure attached to the quarterly report for the period ended December 31 2020 (hereinafter - the "Most Recent Annual Report Over Internal Control"), the Board of Directors and management assessed the internal control in the corporation. Based on this assessment, the Corporation's Board of Directors and management have concluded that the said internal control, as of March 31 2021, is effective.

As of the report date, the Board of Directors and management have not been informed of any event or matter that may alter the assessment of the effectiveness of internal control, as presented in the Most Recent Annual Report Over Internal Control.

As of the report date, based on the Most Recent Quarterly Report over Internal Control and based on information brought to the attention of management and the Board of Directors as stated above, the internal control is effective.

Certification

Statement of the Chief Executive Officer

I, Eyal Ben Simon, hereby certify that:

(1) I have reviewed quarterly report of The Phoenix Holdings Ltd. (hereinafter: the "Corporation") for the first quarter of 2021 (hereinafter – the "Reports");

(2) To my knowledge, the Reports do not contain any misrepresentation of a material fact, or omit a representation of a material fact that is necessary in order for the representations included therein - under the circumstances in which such representations were included - to be misleading as to the reporting period;

(3) To my knowledge, the financial statements and other financial information included in the Reports fairly represent, in all material aspects, the Company's financial position, financial performance and cash flows of the Corporation as of the dates and for the periods covered by the Reports;

(4) I have disclosed to the independent auditor of the Corporation, the Board of Directors, and the Board of Directors' audit committee, based on my most recent evaluation of the internal control over financial reporting and disclosure, the following:

(a) All significant deficiencies and material weaknesses in the establishment or implementation of the internal controls over financial reporting and disclosure that may adversely affect, in a reasonable manner, the Corporation's ability to collect, process, summate or report financial information in a manner that may give rise to doubt as to the reliability of financial reporting and preparation of the financial statements in accordance with the provisions of the law; and -

(b) Any fraud, whether material or not, involving the chief executive officer or anyone directly reporting thereto or involving other employees who have a significant role in the internal control over financial reporting and disclosure;

(5) I, severally or jointly with others in the Corporation:

(a) I have established such controls and procedures, or ensured that such controls and procedures under my supervision be established and in place, designed to ensure that material information relating to the Corporation, including its consolidated companies as defined in the Securities Regulations (Preparation of Annual Financial Statements), 2010, is brought to my attention by others in the Corporation and the consolidated companies, particularly during the Reports' preparation period; and -

(b) I have established controls and procedures, or ensured that such controls and provisions under my supervision be established and in place, designed to ensure, in a reasonable manner, the reliability of financial reporting and preparation of financial statements in accordance with the provisions of the law, including in accordance with generally accepted accounting principles;

(c) I have not been informed of any event or matter that occurred in the period between the most recent report date (quarterly or periodic, as the case may be) and the date of this Report, which may change the conclusion of the Board of Directors and management regarding the effectiveness of internal controls over the corporation's financial reporting and disclosure.

Nothing in the foregoing shall derogate from my responsibility or the responsibility of any other person, under any law.

May 26, 2021 ___________________________________________

Eyal Ben Simon, Chief Executive Officer

Certification

Statement of the Most Senior Financial Officer

I, Eli Schwartz, hereby certify that:

(1) I have reviewed interim financial statements and other financial information included in the interim report of The Phoenix Holdings Ltd. (hereinafter: the "Corporation") for the first quarter of 2021 (hereinafter – the "Reports" or "Interim Reports");

(2) To my knowledge, the interim financial statements and other financial information included in the Interim Reports do not contain any misrepresentation of a material fact, nor omit a representation of a material fact that is necessary in order for the representations included therein - under the circumstances in which such representations were included - to be misleading as to the reporting period;

(3) To my knowledge, the Interim Financial Statements and other financial information included in the Interim Reports present fairly, in all material aspects, the Company's financial position, financial performance and cash flows of the Corporation as of the dates and for the periods covered by the Reports;

(4) I have disclosed to the independent auditor of the Corporation, the Board of Directors, and the Board of Directors' audit committee, based on my most recent evaluation of the internal control over financial reporting and disclosure, the following:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting and disclosure insofar as it relates to the Interim Financial Statements and other financial information included in the Interim Reports, that could reasonably adversely affect the Corporation's ability to collect, process, summarize or report financial information so as to cast doubt on the reliability of financial reporting and the preparation of the financial statements in accordance with law; and

(b) Any fraud, whether material or not, involving the chief executive officer or anyone directly reporting thereto or involving other employees who have a significant role in the internal control over financial reporting and disclosure;

(5) I, severally or jointly with others in the Corporation:

(a) I have established such controls and procedures, or ensured that such controls and procedures under my supervision be established and in place, designed to ensure that material information relating to the Corporation, including its consolidated companies as defined in the Securities Regulations (Preparation of Annual Financial Statements), 2010, is brought to my attention by others in the Corporation and the consolidated companies, particularly during the Reports' preparation period; and -

(b) I have established controls and procedures, or ensured that such controls and provisions under my supervision be established and in place, designed to ensure, in a reasonable manner, the reliability of financial reporting and preparation of financial statements in accordance with the provisions of the law, including in accordance with generally accepted accounting principles;

(c) I have not been informed of any event or matter that occurred in the period between the most recent report date (quarterly or periodic, as the case may be) and the date of this Report, which may change the conclusion of the Board of Directors and management regarding the effectiveness of internal controls over the corporation's financial reporting and disclosure.

Nothing in the foregoing shall detract from my responsibility or the responsibility of any other person, under any law.

May 26, 2021 ___________________________________________

Part 5

Statements regarding Controls and Procedures over Financial Reporting and Disclosure of The Phoenix Insurance Company Ltd.

The Phoenix Insurance Company Ltd. Certification

I, Eyal Ben Simon, hereby certify that:

I have reviewed the quarterly report of The Phoenix Insurance Company Ltd. (hereinafter the "Company") for the quarter ended March 31 2021 (hereinafter: the "Report").

To my knowledge, the Report does not contain any misrepresentation of a material fact, or omit a representation of a material fact, that is necessary in order for the representations included in it - under the circumstances in which such representations were included - to be misleading as to the reporting period.

To my knowledge, the quarterly financial statements and other financial information included in the Report present fairly, in all material aspects, the Company's financial position, financial performance and changes in equity and cash flows as at the dates and for the periods covered by the report.

I and others at the Company signing this certification are responsible for the establishment and implementation of controls and procedures regarding the Company's disclosure and internal control over financial reporting of the Company; and

(a) We have established such controls and procedures, or caused such controls and procedures to be established under our oversight, with the aim of ensuring that material information about the Company and its consolidated companies is brought to our attention by others in the Company and these companies, especially during the preparation of the Report;

(b) We have established such internal controls over the financial reporting or have overseen the establishment of such controls over financial reporting, with the aim of providing reasonable assurance as to the reliability of the financial reporting and that the financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the directives of the Commissioner of the Capital Market, Insurance and Savings;

(c) We have evaluated the effectiveness of the Company's disclosure controls and procedures and presented in the Report our conclusions regarding the effectiveness of the disclosure controls and procedures as of the end of the reporting period according to our evaluation; and

(d) The Report discloses any change in the Company's internal control over financial reporting which occurred during the fourth quarter and has materially affected, or is reasonably expected to affect, the Company's internal control over financial reporting; and

I and others at the Company signing this certification have disclosed to the joint independent auditors, the Board of Directors, and the Board of Directors' audit committee, based on our most recent evaluation of the internal control over financial reporting, the following:

(a) All significant deficiencies and material weaknesses in the establishment or implementation of the internal control over financial reporting that may harm the Company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, involving management or other employees who have a significant role in the Company's internal control over financial reporting.

Nothing in the foregoing shall detract from my responsibility or the responsibility of any other person, under any law.

______________________________________

May 26, 2021

Eyal Ben Simon, Chief Executive Officer

The Phoenix Insurance Company Ltd. Certification

I, Eli Schwartz, hereby certify that:

I have reviewed the quarterly report of The Phoenix Insurance Company Ltd. (hereinafter the "Company") for the quarter ended March 31 2021 (hereinafter: the "Report").

To my knowledge, the Report does not contain any misrepresentation of a material fact, or omit a representation of a material fact, that is necessary in order for the representations included in it - under the circumstances in which such representations were included - to be misleading as to the reporting period.

To my knowledge, the quarterly financial statements and other financial information included in the Report present fairly, in all material aspects, the Company's financial position, financial performance and changes in equity and cash flows as at the dates and for the periods covered by the report.

I and others at the Company signing this certification are responsible for the establishment and implementation of controls and procedures regarding the Company's disclosure and internal control over financial reporting¹ of the Company; and

(a) We have established such controls and procedures, or caused such controls and procedures to be established under our oversight, with the aim of ensuring that material information about the Company and its consolidated companies is brought to our attention by others in the Company and these companies, especially during the preparation of the Report;

(b) We have established such internal controls over the financial reporting or have overseen the establishment of such controls over financial reporting, with the aim of providing reasonable assurance as to the reliability of the financial reporting and that the financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the directives of the Commissioner of the Capital Market, Insurance and Savings;

(c) We have evaluated the effectiveness of the Company's disclosure controls and procedures and presented in the Report our conclusions regarding the effectiveness of the disclosure controls and procedures as of the end of the reporting period according to our evaluation; and

(d) The Report discloses any change in the Company's internal control over financial reporting which occurred during the fourth quarter and has materially affected, or is reasonably expected to affect, the Company's internal control over financial reporting; and

¹As defined in the provisions of the institutional entities circular titled "Internal Control over Financial Reporting - Statements, Reports and Disclosures".

Appendices relating to The Phoenix Insurance Company Ltd.

I and others at the Company signing this certification have disclosed to the joint independent auditors, the Board of Directors, and the Board of Directors' audit committee, based on our most recent evaluation of the internal control over financial reporting, the following:

(a) All significant deficiencies and material weaknesses in the establishment or implementation of the internal control over financial reporting that may harm the Company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, involving management or other employees who have a significant role in the Company's internal control over financial reporting.

Nothing in the foregoing shall detract from my responsibility or the responsibility of any other person, under any law.

May 26, 2021

______________________________________________ Eli Schwartz, Executive VP, Chief Financial Officer

As of December 31
2020	2019**
Audited* In NIS thousand

6,661,640	7,455,885
6.109,203	4,630,620
192%	162%

punikation hate of the Solvensy Tatto Tenvi T
Raising of equity instruments		220,000
Shareholders equity for SCR	12,770,842	12,306,505
Surplus	6,109,203	4,850,620
Economic solvency ratio (in %)	192%	165%
7.1.1 11 4

	As of December 31
	2020	2019**
	Audited*
	In NIS thousand
Minimum capital requirement (MCR)	1,665,410	1,863,971
Shareholders equity for MCR	9,773,104	8,919,336

	As of December 31
	2020**	2019**
	Audited*
	In NIS thousand
Shareholders' equity for SCR (NIS thousand) Solvency capital requirement (SCR) (in NIS thousand)	9,931,007	9,161,522
(1)	8,557,405	8,896,554
Economic solvency ratio (in %)	116%	103%
Effect of material capital-related measures taken in the period between the calculation date and the publication date of the solvency ratio report: Raising of equity instruments Shareholders equity for SCR	9,931,007	220,000 9,381,522
Surplus	1,373,602	484,967
Economic solvency ratio (in %)	116%	105%
Capital surplus after capital-related actions in relation to the Board of Directors' target: Minimum solvency target, net of the transitional provisions	105%	105%
Capital surplus over target***	945,731	40,140

Range/years		Dec. 31 2020	Mar. 31 2021	Mav 23 2021
Short 1-3 term		Between 0.13% and (0.85)%	Between (1.28)% and (1.50)%	Between (1.37)% and (1.73)%
4-10		Between (0.94)% and	Between (1.34)% and	Between (1.57)% and
Mid-term		(0.58)%	(0.50)%	(0.65)%
Mid-long	11-15	Between (0.49)% and	Between (0.39)% and	Between (0.51)% and
term		(0.23)%	(0.12)%	(0.06)%
Long	16-25	Between (0.18)% and	Between (0.08)% and	Between 0.03% and
term		0.23%	0.31%	0.52%

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	1-3/2021	1-3/2020	1-12/2020
		In NIS million
Investment qains (losses) credited to policyholders net of management fees(*)	2,845	(7,351)	3,333
Management fees	324	111	740

	Policies issued up to 2004 (Fund J)
	1-3/2021	1-3/2020	1-12/2020
Nominal returns before payment of management fees Nominal returns after payment of	4.33%	(11.15%)	6.61%
management fees Real returns before payment of	3.55%	(11.30%)	4.99%
management fees Real returns after payment of	4.23%	(10.71%)	7.25%
management fees	3.45%	(10.86%)	5.61%

		Profit (loss) from changes in the risk factor			Profit (loss) from changes in the risk factor
Type of instrument	Absolute increase of 2%	10% increas e	50/0 increas e	Fair value	5% decreas e	10% decreas e	Absolute decrease of 20/0
Government bonds				37.8
Corporate bonds	(1.8)	(0.1)		31.9		0.1	2.0
Capital note to the insurance	(49.1)	(1.6)	(0.8)	420.8	0.8	1.6	58.0
company Total assets	(50.9)	(1.7)	(0.9)	490.4	0.9	1.7	60.0
The Phoenix bonds(*)	75.6	3.2	1.6	(810.3)	(1.6)	(3.2)	(87.7)
Total liabilities	75.6	3.2	1.6	(810.3)	(1.6)	(3.2)	(87.7)
Total	24.7	1.4	0.7	(319.9)	(0.7)	(1.4)	(27.7)

	Profit (loss) from changes in the	risk factor				Profit (loss) from changes in the risk factor
Type of instrument	Absolute increase of 20/0	10% increas e	5% increas e	Fair value	5% decreas e	10% decreas e	Absolute decrease of 20/0
Government honds	(0.2)			4.5			0.2
Corporate honds				1.5			0.1
Capital note to the insurance company	(26.7)	(1.2)	(0.6)	238.6	0.6	1.2	31.7
Total assets	(26.9)	(1.2)	(0.6)	244.5	0.6	1.2	31.9
The Phoenix bonds(*)	19.9	0.5	0.2	(668.6)	(0.2)	(0.5)	(22.1)
Total liabilities	19.9	0.5	0.2	(668.6)	(0.2)	(0.5)	(22.1)
Total	(7.1)	(0.7)	(0.4)	(424.1)	0.4	0.7	9.8

		NIS		No n- net mo	ET Ns - lin kag e t	i ins Isr ael ura nce
	No n-l ink ed	CP I-li nke d	cu rre ncy	ary item s	o var iou s	co mp any	To tal
Inta ible As set ng s	-	-	-	1, 300 040 ,	-	998 579 ,	2, 298 619 ,
De fer red tax set as s	-	-	-	57, 245	-	-	57, 245
De fer red isit ion sts ac qu co	-	-	-	-	-	1, 819 463 ,	1, 819 463 ,
Pro ty, lan t & uip nt per p eq me	-	-	-	197 283	-	719 468	916 751
Inv in inv est nts est me ees	81, 728	15, 651	6, 170	, 144 725	-	, 522 836	, 771 110
Inv in t of ield -de den est nt p erty t co ntra cts me rop res pec y pen	-	-	-	, -	-	, 1, 853 064	, 1, 853 064
Inv the est nt p erty me rop - o r	-	-	-	-	-	, 2, 721 934	, 2, 721 934
Re ins set ura nce as s	-	-	-	-	-	, 2, 650 209	, 2, 650 209
Cre for of s dit cha ritie pur se ecu s	399 000	-	53, 000	-	-	, -	, 452 000
Cu nt t ets rre ax ass	, -	17, 148	-	-	-	9, 749	, 26, 897
Re cei vab les d d ebi t ba lan an ces	140 467	-	3, 371	-	-	408 464	552 302
Pre miu llec tibl ms co e	, -	-	-	-	-	, 739 902	, 739 902
He ld-f sal f d isp l gr ts o or- e a sse osa oup	-	-	-	44, 473	-	, -	, 44, 473
t of Fin ial inv est nts in ield -de den t co ntra cts anc me res pec pen y	-	-	-	-	-	69, 130 062	69, 130 062
Fin ial inv fo r ho lde f bo nds ET Ns hor t E TN est nts anc me rs o , s s,						,	,
, ite ET Ns dep osi rtifi and d b ond t ce cat str uct com pos es ure s	-	-	-	-	23 1, 000	-	23 1, 000
, Ma rke tab le d ebt set as s	31, 443	68, 830	385	-	-	7, 390 646	7, 49 1, 305
No ark ble de bt a eta ts n-m sse	612 892	196 307	-	-	-	, 13, 524 006	14, 333 205
Sh are s	, -	, -	-	61, 228	-	, 2, 056 370	, 2, 117 598
Oth er	29, 267	-	817	14, 396	-	, 3, 490 678	, 3, 535 158
En ber ed h a nd h e iva len ts f hol der f bo nds cum cas cas qu or s o						,	,
, han ded fu nds hor cha ded fu nds osi tra t ex tra te exc ge- , s nge , co mp
han ded fu nds dep osi rtifi and d b ond tra t ce cat str uct exc ge- es ure s
,	-	-	-	-	-	-	-
Ca sh and sh iva len ts i f y ield -de den ct o t co ntra cts ca equ n re spe pen
	-	-	-	-	-	11, 162 653	11, 162 653
Oth ash d c ash uiv ale nts er c an eq	374 449	-	32, 585	-	-	, 1, 842 320	, 2, 249 354
	,					,	,
To tal ets ass	1, 669 246 ,	297 936 ,	96, 329	1, 819 390 ,	231 000 ,	121 040 403 , ,	125 154 304 , ,
Lia bilit ies in t of ins d n ield ntra cts res pec ura nce co an on- y
dep end inv ent est nt c ont ts me rac	-	-	-	-	-	23, 904 976 ,	23, 904 976 ,
t of Lia bilit ies in ins ntra cts d y ield -de den t res pec ura nce co an pen
inv est nt c ont ts me rac	-	-	-	-	-	81, 296 403 ,	81, 296 403 ,
Lia bilit ies in t of de fer red tax res pec es	-	-	-	22, 311	-	912 100 ,	934 41 1 ,
Lia bilit for loy ben efit et y em p ee s, n	22, 526	-	-	-	-	54, 130	76, 656
Lia bilit in r of ect t ta y esp cur ren xes	-	18, 688	-	-	-	51, 916	70, 604
Pay abl and dit bal es cre anc es	489 240	300	2, 541	-	-	2, 323 096	2, 815 177
Lia bilit ies fo r bo nds ET Ns hor t E TN ite ET Ns and , s s, c om pos	,					,	,
, red bo nds stru ctu	-	-	-	-	228 000	-	228 000
Fin ial liab ilitie anc s	1, 457 362	1, 118 319	59, 000	-	, -	5, 113 299	, 7, 747 980
Lia bilit ies cla ssi fied he ld f ale as or s	, -	, -	-	10, 458	-	, -	, 10, 458

liab ilit ies To tal To tal	1, 969 128 , 299 882	1, 137 307 , 839 370	61, 541 787	32, 769 786 621	228 000 , 000	113 655 920 , , 384 483	117 084 665 , , 069 639
exp os ure	( ) ,	( ) ,	34,	1, ,	3,	7, ,	8, ,

	NIS		rei Fo	No n-	ET Ns	i ins Isr ael
			gn cu rre	net mo ary	- lin kag e t	ura nce
	No n-l ink ed	CP I-li nke d	ncy	item s	o var iou s	co mp any	To tal
Inta ible As set	-	-	-	818 111	-	977 930	1, 796 041
ng s De fer red tax set as s	-	-	-	, 28, 870	-	, -	, 28, 870
De fer red isit ion sts ac co						768 459	768 459
qu Pro lan t &	-	-	-	-	-	1, ,	1, ,
uip ty, nt per p eq me	-	-	-	138 868 ,	-	635 493 ,	774 361 ,
Inv in inv est nts est me ees	72, 478	15, 200	6, 170	150 145 ,	-	49 1, 738	735 731 ,
Inv in t of ield -de den est nt p erty t co ntra cts me rop res pec y pen	-	-	-	-	-	1, 631 541 ,	1, 631 541 ,
Inv est nt p erty the me rop - o r	-	-	-	-	-	2, 613 378 ,	2, 613 378 ,
Re ins set ura nce as s	-	-	-	-	-	2, 475 063 ,	2, 475 063 ,
Cre dit for cha of s ritie pur se ecu s	255 500 ,	-	8, 500	-	-	-	264 000 ,
Cu nt t ets rre ax ass	-	11, 051	-	-	-	150 235 ,	161 286 ,
Re cei vab les d d ebi t ba lan an ces	219 774 ,	-	-	-	-	405 538 ,	625 312 ,
Pre miu llec tibl ms co e	-	-	-	-	-	823 372 ,	823 372 ,
Fin ial inv in t of ield -de den est nts t co ntra cts anc me res pec y pen	-	-	-	-	-	55, 157 099 ,	55, 157 099 ,
Fin ial inv fo r ho lde f bo nds ET Ns hor t E TN est nts anc me rs o , s s, ,
ite ET Ns dep osi rtifi and d b ond t ce cat str uct com pos es ure s ,	-	-	-	-	275 000 ,	-	275 000 ,
Ma rke tab le d ebt set as s	16, 278	46, 205	87	-	-	458 764 7, ,	521 334 7, ,
No ark eta ble de bt a ts n-m sse	126 670 ,	138 816 ,	26, 000	-	-	13, 213 841 ,	13, 505 327 ,
Sh are s	-	-	-	51, 253	-	1, 384 578 ,	1, 435 831 ,
Oth er	-	-	15, 530	-	-	2, 468 472 ,	2, 484 002 ,
En ber ed h a nd h e iva len ts f hol der f bo nds cum cas cas qu or s o ,
fu fu han tra ded nds hor t ex cha tra ded nds osi te exc ge- , s nge , co mp
han tra ded fu nds dep osi t ce rtifi cat and str uct d b ond exc ge- es ure s ,
	-	-	-	-	-	-	-
Ca sh and sh iva len ts i f y ield -de den ct o t co ntra cts ca equ n re spe pen
	-	-	-	-	-	512 737 7, ,	512 737 7, ,
Oth ash d c ash uiv ale nts er c an eq	490 172 ,	-	4, 000	-	-	1, 209 087 ,	1, 703 259 ,

To tal ets ass	1, 187 042 ,	211 272 ,	54, 117	1, 187 247 ,	275 000 ,	100 377 325 , ,	103 292 003 , ,
t of Lia bilit ies in ins ntra cts d n ield res pec ura nce co an on- y
dep end inv ent est nt c ont ts me rac	-	-	-	-	-	23, 311 893 ,	23, 311 893 ,
Lia bilit ies in t of ins d y ield -de den ntra cts t res pec ura nce co an pen
inv est nt c ont ts me rac	-	-	-	-	-	63, 930 828 ,	63, 930 828 ,
Lia bilit ies in t of de fer red tax res pec es	-	-	-	6, 043		389 742 ,	395 785 ,
for efit Lia bilit loy ben et em p ee s, n y	13, 504	-	-	-	-	43, 265	56, 769
Lia bilit in r of ect t ta y esp cur ren xes	-	10, 273	-	-	-	10, 480	20, 753
Pay abl and dit bal es cre anc es	228 21 1	-	-	-	-	2, 002 397	2, 230 608
Lia bilit ies fo r bo nds ET Ns hor t E TN ite ET Ns and , s s, c om pos	,					,	,
, red bo nds stru ctu	-	-	-	-	272 000	-	272 000
Fin ial liab ilitie anc s	989 604	587 804	21, 093	-	, -	5, 298 894	, 6, 897 395
Pro vis ion fo fo isit ion of inv ent est r pa ym r ac qu an ee	, -	, -	-		-	, -	, -

To tal liab ilit ies	1, 231 319 ,	598 077 ,	21, 093	6, 043	272 000 ,	94, 987 499 ,	97, 116 031 ,

		NIS	Fo rei gn cu rre ncy	No n- net mo ary	ET Ns - lin kag e t o va	li ins Isr ae e co ura nc
	No n-l ink ed	CP I-li nk ed		ite ms	rio us	mp an y	To tal
Inta ible As set ng s	-	-	-	1, 013 232 ,	-	1, 003 43 6 ,	2, 016 668 ,
De fer red ta ts x a sse	-	-	-	104 55 ,	-	-	104 55 ,
De fer red isit ion sts ac qu co	-	-	-	-	-	1, 712 630	1, 712 630
Pro rty lan t & uip nt pe , p eq me	-	-	-	138 924	-	, 722 94 1	, 86 1, 865
Inv in inv est nts est me ees	81 32 0	31 9	170	, 150 933		, 503 127	756 86 9
of Inv est nt in r ect ield -de nde nt c ont ts	, -	15, -	6, -	, -	- -	, 1, 83 9, 57 6	, 1, 83 9, 57 6
rty me pro pe esp pe rac y Inv the est nt	-	-	-	-	-	2, 728 710	2, 728 710
rty me pro pe - o r Re ins set						, 2, 53 1, 65 9	, 2, 53 1, 65 9
ura nce as s Cre dit for rch of itie	- 374 000	-	- 29 000	-	-		40 000
pu ase se cur s Cu	,	- 22 6	,	-	-	- 196	3, 422
nt t ets rre ax ass	- 22	6,	-	-	-		6,
Re cei ble nd de bit ba lan va s a ces	129 0 ,	-	-	-	-	40 0, 572	52 9, 792
Pre miu llec tib le ms co	-	-	-	-	-	65 1, 825	65 1, 825
Fin cia l in s in f y ield -de nde tm ent ct o nt c ont ts an ves re spe pe rac	-	-	-	-	-	65 57 0, 44 7 ,	65 57 0, 44 7 ,
Fin cia l in s fo r h old of bo nds ET Ns ho rt E TN tm ent an ves ers , s s, ,
ific ite ET Ns de it c ert ate nd str uct d b ond com pos pos s a ure s ,	-	-	-	-	23 9, 000	-	23 9, 000
Ma rke tab le d ebt set as s	12, 80 9	29 32 6 ,	2, 067	-	-	8, 05 1, 26 6	8, 095 46 8 ,
No ark ble de bt a eta ts n-m sse	57 9, 900	195 392 ,	-	-	-	13, 23 1, 897	14, 007 189 ,
Sh are s	-	-	-	39 52 0 ,	-	1, 860 47 3 ,	1, 89 9, 993
Oth er	21 59 7 ,	51 1	-	25 29 7 ,	-	3, 20 0, 064	3, 24 7, 46 9
En be red sh and sh uiv ale fo r h old of bo nds nts cum ca ca eq ers ,
han ded fu nds ho xch ded fu nds osi -tra rt e tra te exc ge , s an ge , co mp
han ded fu nds de it c ific nd d b ond -tra ert ate str uct exc ge pos s a ure s ,	-	-	-	-	-		-
Ca sh and sh uiv ale in f y ield -de nde nts t o nt c ont ts ca eq res pec pe rac
	-	-	-	-	-	10, 464 21 6 ,	10, 464 21 6 ,
Oth h a nd h e iva len ts er cas cas qu	55 7, 159	-	26 59 6 ,	-	-	962 148 ,	1, 545 903 ,
To tal set as s	75 005 1, 6,	24 6, 774	63 833 ,	1, 423 010 ,	23 9, 000	115 435 183 , ,	805 119 163 , ,

Lia bili ties in f in d n ield t o tra cts res pec sur an ce con an on -y
de nde inv nt est nt c ont ts pe me rac	-	-	-	-	-	23 46 9, 887 ,	23 46 9, 887 ,
f in Lia bili ties in t o tra cts d y ield -de nde nt res pec sur an ce con an pe
inv est nt c ont ts me rac	-	-	-	-	-	76 856 913 , ,	76 856 913 , ,
Lia bili ties in f d efe d t t o res pec rre axe s	-	-	-	50 56 7 ,	-	847 23 7 ,	897 804 ,
Lia bili for loy be nef its, ty t em p ee ne	14, 035	-	-	-	-	45 32 7 ,	59 362 ,
of Lia bili ty in r ect nt t esp cu rre axe s	-	20 422 ,	-	-	-	43 022 ,	63 444 ,
Pa ble nd dit ba lan ya s a cre ces	22 8, 49 8	-	-	-	-	2, 224 353 ,	2, 452 85 1 ,
Lia bili ties fo r b ond ET Ns ho rt E TN ite ET Ns d s, , s s, c om pos an
d b ond str uct ure s	-	-	-	-	23 8, 000	-	23 8, 000
Fin cia l lia bili ties an	1, 26 180 7,	864 958 ,	45 50 0 ,	8, 000	-	4, 858 076 ,	043 714 7, ,
To tal lia bil itie s	1, 50 9, 713	885 38 0 ,	45 50 0 ,	58 567 ,	23 8, 000	108 344 815 , ,	111 08 1, 975 ,
To tal ex po su re	24 6, 292	( 638 606 ) ,	18, 333	1, 364 443 ,	1, 000	7, 090 36 8 ,	8, 08 1, 830

Series/issuance date	Bonds Series 3	Bonds Series 4	Bonds Series 5
Rating agency	Midroog / Ma'alot	Midroog / Ma'alot	Midroog / Ma'alot
Rating as of the report date	Aa3.il iIAA /-	Aa3.il iIAA /-	Aa3.il iIAA /-
Par value on issuance date	272,191,000 ש"ח	NIS 391,384,000	NIS 822,616,000
Interest type	Non-linked	Non-linked	CPI-linked
Nominal interest	2.22%	The Bank of Israel's variable quarterly interest rate plus a 1.28% spread	0.44%
Effective interest rate on issuance date	Approximates the nominal interest	1.7%	0.55%
Listed on the TASE	Yes	Yes	Yes
Principal payment dates	5 equal annual installments of 16.66% on July 31 of each of the years 2022 through and 2026, one installment of 16.7% on July 31 2027.	2 equal annual installments of 12% on July 31 of each of the years 2020 and 2021 and 4 equal annual installments of 19% on July 31 of each of the years 2025 through 2028.	3 equal annual installments of 4% on July 1 of each of the years 2022 through 2024, one installment of 28% on May 1 2028, and 2 equal installments annual of 30% on May 1 of each of the years 2029 through 2030.
Interest payment dates	Semi-annual interest on January 31 and July 31	Quarterly interest on January 31, April 30, July 31, and October 31	Semi-annual interest on May 1 and November 1
Nominal p.v. as of Mar. 31 2021	NIS 272 million	NIS 391 million	NIS 822 million
CPI-linked nominal p.v. as of Mar. 31 2021	NIS 272 million	NIS 391 million	NIS 822 million
Carrying amount of bonds' outstanding balances as of Mar. 31 2021	NIS 271 million	NIS 389 million	NIS 808 million

Series/issuance date	Bonds Series 3	Bonds Series 4	Bonds Series 5
Carrying amount of interest payable as of Mar. 31 2021	NIS 0.9 million	NIS 0.8 million	NIS 1.48 million
Market value as of Mar. 31 2021 (*)	NIS 284 million	NIS 393 million	NIS 837 million
Series' materiality	The series is material as this term is defined in Regulation 10(b)13(a) of the Securities Regulations (Periodic and Immediate Reports), 1970.	The series is material as this term is defined in Regulation 10(b)13(a) of the Securities Regulations (Periodic and Immediate Reports), 1970.	The series is material as this term is defined in Requlation 10(b)13(a) of the Securities Regulations (Periodic and Immediate Reports), 1970.

Review Report of the Auditors 2-3
Condensed Consolidated Interim Statements of Financial Position 4-5
Condensed Consolidated Interim Income Statements5
Condensed Consolidated interim Statements of Comprehensive Income 6-7
Condensed Consolidated Interim Statements of Changes in Equity 8-10
Condensed Consolidated Interim Statements of Cash Flow11-13
Notes to the Condensed Consolidated Interim Financial Statements14-100
Appendix to the Condensed Consolidated Interim Financial Statements….101-104

	As of
	Mar. 31 2021 Mar. 31 2020
			Dec. 31 2020
	Unaudited	Audited
	In NIS thousand
Assets
Intangible assets	2,298,619	1,796,041	2,016,668
Deferred tax assets	57,245	28,870	55,104
Deferred acquisition costs	1,819,463	1,768,459	1,712,630
Property, plant & equipment	916,751	774,361	861,865
Investments in associates	771,110	735,731	756,869
Investment property in respect of yield-dependent contracts	1,853,064	1,631,541	1,839,576
Investment property - other	2,721,934	2,613,378	2,728,710
Reinsurance assets	2,650,209	2,475,063	2,531,659
Credit for purchase of securities	452,000	264,000	403,000
Current tax assets	26,897	161,286	6,422
Receivables and debit balances	552,302	625,312	529,792
Premiums collectible	739,902	823,372	651,825
Held-for-sale assets of disposal group (please see Note 4)	44,473	-	-
Financial investments in respect of yield-dependent contracts	69,130,062	55,157,099	65,570,447
Financial investments for holders of deposit certificates and structured
bonds	231,000	275,000	239,000
Other financial investments:
Marketable debt assets	7,491,305	7,521,334	8,095,468
Non-marketable debt assets	14,333,205	13,505,327	14,007,189
Shares	2,117,598	1,435,831	1,899,993
Other	3,535,158	2,484,002	3,247,469
Total other financial investments	27,477,266	24,946,494	27,250,119
Cash and cash equivalents in respect of yield-dependent contracts	11,162,653	7,512,737	10,464,216
Other cash and cash equivalents	2,249,354	1,703,259	1,545,903
Total assets	125,154,304	103,292,003	119,163,805
Total assets in respect of yield-dependent contracts	82,335,416	64,491,785	78,034,084

	For the three months ended March 31	For the year ended December 31
	2021 2020
	Unaudited		2020 Audited
		In NIS thousand
Premiums earned, gross	2,618,322	2,719,613	10,382,652
Premiums earned by reinsurers	310,944	346,381	1,328,978
Premiums earned - retention	2,307,378	2,373,232	9,053,674
Gains (losses) on investments, net and finance income	3,854,595	(8,153,568)	5,479,706
Income from management fees	486,873	274,397	1,357,189
Income from fees and commissions	167,627	140,371	556,051
Income from other financial services	41,000	46,000	159,000
Other income	12,906	25,952	131,846
Total income	6,870,379	(5,293,616)	16,737,466
Payments and change in liabilities in respect of insurance contracts and investment contracts, gross	5,805,929	(5,583,282)	12,529,564
Reinsurers' share in payments and in changes in liabilities in respect of insurance contracts	203,863	256,732	826,690
Payments and change in liabilities in respect of insurance contracts and investment contracts - retention	5,602,066	(5,840,014)	11,702,874
Fees and commissions, marketing expenses and other purchase expenses	380,423	458,538	1,750,103
General and administrative expenses	363,731	323,975	1,360,028
Other expenses	10,745	832	54,885
Finance expenses	41,545	26,360	146,509
Total expenses	6,398,510	(5,030,309)	15,014,399
Share in profits of equity-accounted investees	16,027	15,304	39,697
Profit (loss) before income taxes	487,896	(248,003)	1,762,764
Taxes on income	161,769	(94,798)	553,829
Profit (loss)	326,127	(153,205)	1,208,935
Attributed to:
Company's shareholders	315,404	(166,067)	1,169,023
Non-controlling interests	10,723	12,862	39,912
Profit (loss)	326,127	(153,205)	1,208,935
Earnings (loss) per share attributed to the Company's shareholders (in NIS):
Basic earnings (loss) per share
Earnings (loss) per ordinary share of NIS 1 par value (NIS)	1.24	(0.65)	4.57
Diluted earnings (loss) per share
Earnings (loss) per ordinary share of NIS 1 par value (NIS)	1.23	(0.65)	4.57

	For the three months	For the year ended December
	ended March 31		31
	2021	2020	2020
	Unaudited		Audited
Profit (loss) for the period	326,127	In NIS thousand (153,205)	1,208,935
Other comprehensive income (loss):
Amounts that will be or that have been reclassified to profit or loss
when specific conditions are met
Net change in fair value of financial assets classified as available for sale,
carried to capital reserves	253,176	(806,319)	455,703
Net change in fair value of financial assets classified as available for sale,
carried to the income statement	(230,110)	(86,071)	(516,761)
Gain on impairment of financial assets classified as available for sale, carried
to the income statement	35,908	260,323	324,220
Company's share in other comprehensive income (loss), net, of equity
accounted companies	1,057	5,185	(3,412)
Tax effect	(19,529)	215,048	(89,697)
Total components of net other comprehensive income (loss) subsequently
reclassified to profit or loss	40,502	(411,834)	170,053
Amounts that shall not be subsequently reclassified to profit or
loss
Revaluation of property, plant and equipment	-	1,621	17,314
Actuarial gain (loss) in respect of defined benefit plans	-	-	497
Tax effect	-	(373)	(4,190)
Total components of other comprehensive income, net, that shall not be
subsequently reclassified to profit or loss	-	1,248	13,621
Total other comprehensive income (loss), net	40,502	(410,586)	183,674
Total comprehensive income (loss) for the period	366,629	(563,791)	1,392,609
Attributed to:
Company's shareholders	355,906	(576,653)	1,352,697
Non-controlling interests	10,723	12,862	39,912
Comprehensive income (loss)	366,629	(563,791)	1,392,609

AI Terminal

The Phoenix Holdings Ltd.

6983_rns_2021-06-10_303a83d1-b63a-4b8e-8271-6af019bbd62b.pdf

Table of Contents

Members of the Board

Table of Contents

Report of the Board of Directors on the State of the Corporation's Affairs March 31 2021

1. The Group's Structure, its Areas of Activity, and Developments Therein

1.1. Group structure

The Company's shareholders

Areas of activity 1.2.

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1.3.5. Gama IPO

1.3.6. Offer to purchase all shares of Psagot Mutual Funds Ltd.

1.3.7. Transfer of the shares of management company Phoenix Excellence from The Phoenix Insurance to the Company

1.3.8. Acquisition of the Halman-Aldubi Investment House

The Halman-Aldubi transaction

Loan to Halman Aldubi Provident and Pension Funds

Merger of Halman Provident into The Phoenix Excellence

Default pension sale - Meitav-Dash deal

1.3.9. Policy of voluntary reporting in English

1.3.10.Ratings

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1.3.14.The Company's preparation for the application of IFRS 17

1.3.15.New chairman for OPM Investment Committee

1.4. The coronavirus and its impact

The security situation 1.5.

2. Description of the Business Environment

2.1. Implementation of the Economic Solvency Regime provisions applicable to The Phoenix Insurance Company Ltd.

2.1.1. Provisions regarding the implementation of the Economic Solvency Regime

2.1.2. Increasing economic capital according to the transitional provisions:

2.1.3. Publication of Economic Solvency Ratio Report

2.1.4. Economic solvency ratio and minimum capital requirement (MCR):

a. Economic solvency ratio:

period between the calculation date and the

Main changes in capital surplus and in the economic solvency ratio compared to last year

The deduction amount

b. Minimum capital requirement (MCR)

c. Limitations on dividend distribution and solvency ratio without the implementation of the deployment provisions

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d. Solvency ratio without applying the transitional provisions for the Transitional Period, and without adjusting the stock scenario:

e. Dividend distribution based on the economic solvency ratio as of December 31 2020

2.2. Arrangements in force

2.3. Draft laws, regulations and bills

3. Developments in the Macroeconomic Environment

Financial markets in Israel 3.1.

Subsequent to the balance sheet date

3.2. Capital markets abroad

Subsequent to the balance sheet date

4. The Board of Directors' Explanations for the State of the Corporation's Business

4.1. General

4.2. Summary of data from the Group's consolidated Financial Statements

Income for 1-3/2021

4.3. Description of the development of the Group's financial position

Assets:

Liabilities:

4.4. Description of the development of the Group's comprehensive income:

General 4.4.1.

4.4.2. Set forth below is an analysis of the Company's financial performance by segment in the first quarter of 2021 compared with the corresponding quarter last year (in NIS million):

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4.5.3. Following is an analysis of the main effects and changes on the results of the life insurance subsegment for the first quarter of 2021 compared to the corresponding quarter last year (in NIS million):

4.5.5. Weighted returns on participating policies

4.5.6. Provident funds subsegment

Developments in contributions towards benefits and total assets under management: Contributions towards benefits (in Assets under management (in NIS NIS million) million)

4.5.7. Pension funds subsegment

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4.7.2. Following is the pre-tax comprehensive income in the various subsegments of property and casualty insurance for the first quarter of 2021 compared with the corresponding quarter last year (in NIS million):

4.7.4. Following is an analysis of the gross loss ratio and combined ratio, and retention loss ratio in the motor property and other subsegments:

4.8. Financial services segment

Following is an analysis of the main effects and changes on the results of the financial services segment for the first quarter of 2021 compared to the corresponding quarter last year (in NIS million):

4.9.

4.11. Analysis of cash flow development

5. Disclosure on Exposure to, and Management of, Market Risks

						Attributed to Company's shareholders
	Share capital	Premium and capital reserves in respect of shares	Treasury shares	Retained earnings	Capital reserve from transacti ons with non control ling interests	Capital reserve from transaction with controlling shareholder - bonus	Capital reserve from share based pay-ment In NIS thousand	Revalu ation reserve	Principal from trans lation diffe rences	Capital reserve in respect of available for-sale assets	Total	Non controlling interests	Total equity
Balance as of January 1 2021 (audited)	309,951	833,592	(26,411)	5,939,754	(43,622)	11,000	44,943	114,614	(23,338)	809,439	7,969,922	111,908	8,081,830
Net income	-	-	-	315,404	-	-	-	-	-	-	315,404	10,723	326,127
Other comprehensive income	-	-	-	-	-	-	-	-	1,057	39,445	40,502	-	40,502
Total comprehensive
income	-	-	-	315,404	-	-	-	-	1,057	39,445	355,906	10,723	366,629
Share-based payment Dividend paid to non		3,635	-		-		2,314	-	-	-	5,949	-	5,949
controlling interests Commencement of	-	-	-	-	-	-	-	-	-	-	-	(5,177)	(5,177)
consolidation Exercise of employee	-	-	-	-	-	-	-	-	-	-	-	408	408
options Transfer from revaluation reserve in respect of revaluation of property, plant and	10	97	-	-	-	-	(107)	-	-	-	-	-	-
equipment, at the
depreciation amount Dividend	- -	- -	- -	554 (380,000)	- -	- -	- -	(554) -	- -	- -	- (380,000)	- -	- (380,000)
Balance as of March				5,875,71
31 2021 (unaudited)	309,961	837,324	(26,411)	2	(43,622)	11,000	47,150	114,060	(22,281)	848,884	7,951,777	117,862	8,069,639

The Company	-	The Phoenix Holdings Ltd.
The Phoenix Insurance	-	The Phoenix Insurance Company Ltd., a wholly-owned subsidiary.
The Phoenix Investments	-	The Phoenix Investments and Finances Ltd., a wholly-owned subsidiary of the Company.
Excellence	-	Excellence Investments Ltd., a subsidiary of The Phoenix Investments.
The Phoenix Excellence Pension and Provident Funds Ltd.	-	The Phoenix Excellence Pension and Provident Funds Ltd., a wholly-owned subsidiary of The Phoenix Insurance (formerly - Excellence Gemel Ltd.).
Halman Aldubi	-	Halman Aldubi Investment House Ltd. is a wholly-owned subsidiary of the Company (for further details, please see Note 4).
Halman Aldubi Provident		Halman Aldubi Provident and Pension Funds Ltd. is a wholly-owned subsidiary of Halman Aldubi.
The Phoenix Capital Raising	-	The Phoenix Capital Raising (2009) Ltd., a wholly-owned subsidiary of The Phoenix Insurance.
Belenus Lux S.a.r.l	-	The controlling shareholder, held indirectly by Centerbridge Partners LP and Gallatin Point Capital LLC (hereinafter - the "Funds"). The said control is jointly held with Leolin Lux S.a.r.l, a sister company of Belenus.
Ad 120	-	Ad 120 Residence Centers for Senior Citizens Ltd. is a wholly-owned subsidiary of The Phoenix Insurance.
The Phoenix Agencies	-	The Phoenix Insurance Agency 1989 Ltd. - a company wholly-owned by the Company.

	For the three months ended March 31	For the year ended December 31
Life insurance and long-term savings segment	2020
	Unaudited	Audited
		In NIS thousand
Premiums earned, gross	1,259,058	4,765,553
Premiums earned by reinsurers	23,634	99,195
Premiums earned - retention	1,235,424	4,666,358
Investment income, net and finance income	(7,191,455)	4,641,250
Income from management fees	202,822	1,106,546
Income from fees and commissions	9,334	39,119
Other income	11,263	22,936
Total income	(5,732,613)	10,476,209
Payments and change in liabilities in respect of insurance contracts and investment contracts, gross	(5,879,613)	8,517,055
Reinsurers' share in payments and in changes in liabilities in respect of insurance contracts	1,655	49,450
Payments and change in liabilities in respect of insurance contracts and investment contracts - retention	(5,881,268)	8,467,605
Fees and commissions and other purchase expenses	182,050	728,085
General and administrative expenses	130,303	548,029
Other expenses	(6,814)	26,303
Finance expenses	(8,988)	2,185
Total expenses	(5,584,717)	9,772,207
Company's share in the net results of investees	6,979	12,006
Net income (loss) before taxes on income	(140,916)	716,008
Other comprehensive income (loss) before taxes on income	(99,340)	6,732
Total comprehensive income (loss) before taxes on income	(240,256)	722,740

	For the three months ended March 31	For the year ended December 31
	2020
Health insurance segment	Unaudited	Audited
	In NIS thousand
Premiums earned, gross	763,861	2,781,698
Premiums earned by reinsurers	95,200	286,671
Premiums earned - retention	668,661	2,495,027
Investment income, net and finance income	(665,410)	473,843
Income from fees and commissions	9,468	44,170
Other income	7,508	12,736
Total income	20,228	3,025,776
Payments and change in liabilities in respect of insurance contracts and investment contracts, gross	(195,410)	2,371,630
Reinsurers' share in payments and in changes in liabilities in respect of insurance contracts	88,141	234,439
Payments and change in liabilities in respect of insurance contracts and investment contracts - retention	(283,551)	2,137,191
Fees and commissions and other purchase expenses	161,189	497,769
General and administrative expenses	40,223	157,523
Finance expenses	(808)	(1,112)
Total expenses	(82,947)	2,791,371
Company's share in the net results of investees	-	2,055
Profit before taxes on income	103,174	236,460
Other comprehensive loss before taxes on income	(68,999)	(33,485)
Total comprehensive income before taxes on income	34,175	202,975

		Consumer price index	Representative exchange rate of the US dollar
	Known CPI	In lieu CPI
	%	%	%
For the three months ended on:
March 31 2021	0.1	0.8	3.7
March 31 2020	(0.5)	(0.1)	3.1

For the year ended December 31 2020	(0.6)	(0.7)	(7)

	For the three-month period ended March 31 2021
	Life insurance and long term savings (a)	Health (b)	Property and casualty insurance (c)	Financial services	Insurance agencies	Other	Not attributed to operating segments	Adjustments and offsets	Total
					Unaudited
					In NIS thousand
Premiums earned, gross	1,261,813	660,630	695,879	-	-	-	-	-	2,618,322
Premiums earned by reinsurers	28,018	51,711	231,215	-	-	-	-	-	310,944
Premiums earned - retention	1,233,795	608,919	464,664	-	-	-	-	-	2,307,378
Investment income, net and finance income	3,389,444	326,165	94,187	56	4,395	801	43,928	(4,381)	3,854,595
Income from management fees	422,583	-	-	64,042	228	12,372	762	(13,114)	486,873
Income from fees and commissions (d)	8,569	12,355	54,179	-	125,314	-	-	(32,790)	167,627
Income from financial services	-	-	-	41,000	-	-	-	-	41,000
Other income	5,492	338	-	1,000	4,302	327	1,652	(205)	12,906
Total income	5,059,883	947,777	613,030	106,098	134,239	13,500	46,342	(50,490)	6,870,379
Increase in insurance liabilities and payments in respect of insurance contracts	4,497,410	844,488	464,031	-	-	-	-	-	5,805,929
Reinsurers' share in payments and in changes in liabilities in	10,751	54,693	138,419	-	-	-	-	-	203,863
respect of insurance contracts
Payments and change in liabilities in respect of insurance
contracts and investment contracts - retention	4,486,659	789,795	325,612	-	-	-	-	-	5,602,066
Fees and commissions and other purchase expenses	171,055	100,930	127,206	11,000	-	-	-	(29,768)	380,423
General and administrative expenses	144,227	37,738	31,255	61,468	80,189	13,711	9,869	(14,726)	363,731
Other expenses	4,325	-	-	3,000	3,231	-	304	(115)	10,745
Finance expenses	3,928	51	5,504	1,000	136	80	34,547	(3,701)	41,545
Total expenses	4,810,194	928,514	489,577	76,468	83,556	13,791	44,720	(48,310)	6,398,510
Company's share in the net results of investees	10,521	615	(1,167)	830	1,587	3,641	-	-	16,027
Profit before taxes on income	260,210	19,878	122,286	30,460	52,270	3,350	1,622	(2,180)	487,896
Other comprehensive income (loss) before taxes on
income	30,043	3,108	55,236	-	-	587	(28,943)	-	60,031
Total comprehensive income (loss) before taxes on
income	290,253	22,986	177,522	30,460	52,270	3,937	(27,321)	(2,180)	547,927
	As of March 31 2021
	Unaudited
					In NIS thousand
Liabilities, gross in respect of insurance contracts and yield dependent investment contracts	75,600,323	5,696,080	-	-	-	-	-	-	81,296,403
Liabilities, gross in respect of insurance contracts and non yield-dependent investment contracts	13,069,298	4,372,914	6,462,764	-	-	-	-	-	23,904,976

	For the three-month period ended March 31 2020
	Life insurance and long term savings	Health	Property and casualty insurance	Financial	Insurance		Not attributed to operating	Adjust ments and
	(a)	(b)	(c)	services	agencies	Other	segments	offsets	Total
					Unaudited
					In NIS thousand
Premiums earned, gross	1,259,058	763,861	696,694	-	-	-	-	-	2,719,613
Premiums earned by reinsurers	23,634	95,200	227,547	-	-	-	-	-	346,381
Premiums earned - retention	1,235,424	668,661	469,147	-	-	-	-	-	2,373,232
Losses on investments, net and finance income	(7,199,881)	(656,984)	(73,853)	-	(4,866)	(322)	(217,001)	(661)	(8,153,568)
Income from management fees	202,822	-	-	73,000	228	10,617	778	(13,048)	274,397
Income from fees and commissions (d)	9,334	9,468	54,109	-	97,881	-	-	(30,421)(1)	140,371
Income from financial services				46,000	-	-	-	-	46,000
Other income	-	18,771	-	5,000	2,613	(7)	-	(425)	25,952
Total income	(5,752,301)	39,916	449,403	124,000	95,856	10,288	(216,223)	(44,555)	(5,293,616)
Payments and change in liabilities in respect of insurance contracts and
investment contracts, gross	(5,879,613)	(195,410)	491,741	-	-	-	-	-	(5,583,282)
Reinsurers' share in payments and in changes in liabilities in respect of
insurance contracts	1,655	88,141	166,936	-	-	-	-	-	256,732
Payments and change in liabilities in respect of insurance contracts and
investment contracts - retention	(5,881,268)	(283,551)	324,805	-	-	-	-	-	(5,840,014)
Fees and commissions and other purchase expenses	181,295	161,944	132,548	11,000	-	-	-	(28,249)	458,538
General and administrative expenses	125,840	44,686	32,451	55,000	62,331	9,483	8,849	(14,665)	323,975
Other expenses (income)	(6,814)	-	-	3,000	2,714	-	1,932	-	832
Finance expenses (income)	(7,776)	(2,020)	5,042	1,000	364	86	30,151	(487)	26,360
Total expenses	(5,588,723)	(78,941)	494,846	70,000	65,409	9,569	40,932	(43,401)	(5,030,309)
Company's share in the net results of investees	6,979	-	(463)	513	3,772	4,503	-	-	15,304
Net income (loss) before taxes on income	(156,599)	118,857	(45,906)	54,513	34,219	5,222	(257,155)	(1,154)	(248,003)
Other comprehensive income (loss) before taxes on income	(99,340)	(68,999)	(177,397)	-	-	399	(279,924)	-	(625,261)
Total comprehensive income (loss) before taxes on income	(255,939)	49,858	(223,303)	54,513	34,219	5,621	(537,079)	(1,154)	(873,264)
					As of March 31 2020
	Unaudited
	In NIS thousand
Liabilities, gross in respect of insurance contracts and yield-dependent
investment contracts	59,845,046	4,085,782	-	-	-	-	-	-	63,930,828
Liabilities, gross in respect of insurance contracts and non-yield
dependent investment contracts	12,896,492	4,051,357	6,364,044	-	-	-	-	-	23,311,893

	For the year ended December 31 2020
	Life insurance and long-term		Property and casualty	Financial	Insurance		Not attributed to operating	Adjustments
	savings (a)	Health (b)	insurance (c)	services	agencies	Other	segments	and offsets	Total
					Audited
					In NIS thousand
Premiums earned, gross	4,765,553	2,781,698	2,835,401	-	-	-	-	-	10,382,652
Premiums earned by reinsurers	99,195	286,671	943,112	-	-	-	-	-	1,328,978
Premiums earned - retention	4,666,358	2,495,027	1,892,289	-	-	-	-	-	9,053,674
Gains (losses) on investments, net and finance income	4,632,824	482,269	130,873	(91)	37	127	239,167	(5,500)	5,479,706
Income from management fees	1,106,546	-	-	248,930	1,361	44,915	3,084	(47,647)	1,357,189
Income from fees and commissions (d)	39,119	44,170	214,717	-	389,025	-	-	(130,980)	556,051
Income from financial services	-	-	-	159,000	-	-	-	-	159,000
Other income	11,673	23,999	-	9,000	89,102	1,137	19	(3,084)	131,846
Total income	10,456,520	3,045,464	2,237,879	416,839	479,525	46,179	242,270	(187,211)	16,737,466
Increase in insurance liabilities and payments in respect of
insurance contracts	8,517,055	2,371,630	1,640,879	-	-	-	-	-	12,529,564
Reinsurers' share in payments and in changes in liabilities
in respect of insurance contracts	49,450	234,439	542,801	-	-	-	-	-	826,690
Payments and change in liabilities in respect of insurance
contracts and investment contracts - retention	8,467,605	2,137,191	1,098,078	-	-	-	-	-	11,702,874
Fees and commissions and other purchase expenses	727,330	498,524	597,354	40,000	-	-	-	(113,105)	1,750,103
General and administrative expenses	543,566	161,986	144,083	222,078	237,974	39,466	66,210	(55,335)	1,360,028
Other expenses	26,303	-	-	12,000	9,123	409	7,505	(455)	54,885
Finance expenses (income)	3,397	(2,324)	(8,021)	5,000	3,314	402	147,191	(2,450)	146,509
Total expenses	9,768,201	2,795,377	1,831,494	279,078	250,411	40,277	220,906	(171,345)	15,014,399
Company's share in the net results of investees	12,006	2,055	(3,592)	3,159	8,670	17,399	-	-	39,697
Net income (loss) before taxes on income	700,325	252,143	402,793	140,920	237,784	23,301	21,364	(15,866)	1,762,764
Other comprehensive income (loss) before taxes on
income	6,732	(33,485)	121,690	-	(332)	1,467	181,489	-	277,561
Comprehensive income (loss) before taxes on income	707,057	218,658	524,483	140,920	237,452	24,768	202,853	(15,866)	2,040,325
					As of December 31 2020
	Audited
					In NIS thousand
Liabilities, gross in respect of insurance contracts and yield
dependent investment contracts	71,540,354	5,316,559	-	-	-	-	-	-	76,856,913
Liabilities, gross in respect of insurance contracts and non
yield-dependent investment contracts	13,047,252	4,237,911	6,184,724	-	-	-	-	-	23,469,887

	For the three-month period ended March 31 2021
	Provident
	Life	fund	Pension fund
	insurance	management	management	Total
			Unaudited
			In NIS thousand
Premiums earned, gross	1,261,813	-	-	1,261,813
Premiums earned by reinsurers	28,018	-	-	28,018
Premiums earned - retention	1,233,795	-	-	1,233,795
Investment income, net and finance
income	3,372,939	15,033	1,472	3,389,444
Income from management fees	323,424	54,691	44,468	422,583
Income from fees and commissions	8,569	-	-	8,569
Other income	5,302	-	190	5,492
Total income	4,944,029	69,724	46,130	5,059,883
Payments and change in liabilities in
respect of insurance contracts and
investment contracts, gross	4,485,338	12,072	-	4,497,410
Share of reinsurers in payments and
changes in liabilities in respect of
insurance contracts	10,751	-	-	10,751
Payments and change in liabilities in
respect of insurance contracts and
investment contracts - retention	4,474,587	12,072	-	4,486,659
Fees and commissions, marketing
expenses and other purchase expenses	127,219	22,174	21,662	171,055
General and administrative expenses	98,463	23,482	22,282	144,227
Other expenses	4,049	183	93	4,325
Finance expenses	3,925	3	-	3,928
Total expenses	4,708,243	57,914	44,037	4,810,194
Company's share in the net results of
investees	10,521	-	-	10,521
Net income before taxes on income	246,307	11,810	2,093	260,210
Other comprehensive income before
taxes on income	30,043	-	-	30,043
Total comprehensive income for the
period before taxes on income	276,350	11,810	2,093	290,253

	Policies including a savings component (including appendices) by policy issuance date				Policies without a savings component
			Since 2004		Life insurance sold as a single policy
	Until 1990 (1)	Until 2003	Non yield dependent	Yield dependent	Individual	Group	Total
				Unaudited In NIS thousand
Gross premiums Proceeds in respect of investment contracts	16,354	276,482	-	793,075	142,326	33,576	1,261,813
credited directly to insurance reserves Financial margin	-	-	-	1,120,809	-	-	1,120,809
including management fees (2) Payments and change in liabilities in respect of	124,289	244,523 (3)	-	78,688	-	-	447,500
insurance contracts, gross Payments and change	137,360	1,687,563	-	2,117,203	71,433	30,319	4,043,878
in liabilities for investment contracts Payments and change in liabilities for	-	-	-	441,460	-	-	441,460
guaranteed return provident fund tracks Total payments and change in liabilities from							12,072
life insurance and long term savings							4,497,410
Total comprehensive income from life insurance business	94,979	143,235	-	8,565	23,759	5,812	276,350
Profit from pension and provident funds Total profit from life							13,903
insurance and long-term savings							290,253