The Phoenix Holdings Ltd.

Regulatory Filings • Jul 11, 2025

Rating Action: Moody's Ratings affirms The Phoenix Insurance Company's Baa1 IFSR; outlook stable

10 July 2025

London, July 10, 2025 – Moody's Ratings (Moody's) has today affirmed the Baa1 insurance financial strength ratings (IFSRs) of The Phoenix Insurance Company Ltd. (Phoenix Insurance). The outlook remains stable. Phoenix Insurance is the principal insurance operating subsidiary of Phoenix Financial LTD (Phoenix, or Group), a diversified financial services group based in Israel.

RATINGS RATIONALE

The affirmation of Phoenix Insurance's IFSRs reflects its A2 standalone credit profile which has been constrained at Baa1 due to its linkage to the Israeli sovereign and operating environment.

The affirmation, and stable outlook, further reflects our view that Phoenix Insurance's substantial capital and liquidity buffers, along with its very strong market position in Israel, position it to continue demonstrating strong performance despite the difficult operating environment. Furthermore, the Group's significant non-insurance activities provide a source of additional cashflows that could be used to support the insurer's solvency in times of stress.

Phoenix's operating performance has remained resilient and continued to strengthen over the past year, with the group reporting comprehensive net income of NIS 2,369 million for 2024, and NIS 568 million for Q1 2025, up from NIS 510 million for Q1 2024. Capital adequacy remains strong, with a Solvency II coverage ratio of 183% at year-end 2024 for Phoenix Insurance, which does not reflect significant additional available resources and liquidity within the broader group.

Phoenix's performance is anticipated to further strengthen, driven by its strategic investments in data and technology that enhance property and casualty (P&C) growth and underwriting capabilities. Additionally, the asset management, wealth, and retirement divisions are expected to benefit from robust new business inflows, supported by increasing savings levels across Israel.

The Government of Israel's ratings, including its Baa1 long-term issuer rating and negative outlook, continues to capture both the credit risks and strengths of Israel's sovereign credit profile, in the context of the 12-day military conflict with Iran that started on 13 June and current ceasefire. See this link for our most recent rating update on Israel, published on 7 July 2025: "Moody's Ratings affirms Israel's Baa1 ratings, maintains negative outlook".

The stable outlook for Phoenix Insurance reflects our view that Phoenix Insurance is well positioned to absorb potential further stress in the operating environment, including potentially, a one-notch downgrade of the sovereign debt rating.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

The ratings could be upgraded once we believe that downside risk to the sovereign and operating environment has receded sufficiently and the outlook for the sovereign is changed to stable.

Phoenix Insurance's ratings could be downgraded in the event of a multi-notch downgrade on the sovereign rating.

PRINCIPAL METHODOLOGIES

The methodologies used in these ratings were Life Insurers published in April 2024 and available at https://ratings.moodys.com/rmc-documents/418351, and Property and Casualty Insurers published in April 2024 and available at https://ratings.moodys.com/rmc-documents/418354. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of these methodologies.

The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.

For any affected securities or rated entities receiving direct credit support/credit substitution from another entity or entities subject to a credit rating action (the supporting entity), and whose ratings may change as a result of a credit rating action as to the supporting entity, the associated regulatory disclosures will relate to the supporting entity. Exceptions to this approach may be applicable in certain jurisdictions.

For ratings issued on a program, series, category/class of debt or security, certain regulatory disclosures applicable to each rating of a subsequently issued bond or note of the same series, category/class of debt, or security, or pursuant to a program for which the ratings are derived exclusively from existing ratings, in accordance with Moody's rating practices, can be found in the most recent Credit Rating Announcement related to the same class of Credit Rating.

For provisional ratings, the Credit Rating Announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating.

Moody's does not always publish a separate Credit Rating Announcement for each Credit Rating assigned in the Anticipated Ratings Process or Subsequent Ratings Process.

These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

The Global Scale Credit Rating(s) discussed in this Credit Rating Announcement was(were) issued by one of Moody's affiliates outside the EU and is(are) endorsed for use in the EU in accordance with the EU CRA Regulation.

Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating.

Brandan Holmes

VP-Sr Credit Officer

Salman Siddiqui Associate Managing Director

Releasing Office: Moody's Investors Service Ltd. One Canada Square Canary Wharf London, E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454

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