Phoenix : Immidiate Report

The Phoenix Holdings Ltd.

Table of Contents

Part 1

Part 2

Part 3

Part 4

Part 5

Part 6

Part 7

Letter from the Chairman of the Board

Description of the Corporation's Business

Report of the Board of Directors on the State of the Company's Affairs Consolidated Financial Statements

Separate Financial Information

Additional Details About the Corporation Corporate Governance Questionnaire

Report and Statements regarding the Internal Controls over Financial Reporting and Disclosure Appendices relating to The Phoenix Insurance Company Ltd.

Members of the Board

Benjamin Gabbay - Chairman

Richard Kaplan (External Director)

Rachel Levine (External Director)

Dr. Ehud Shapira (Independent Director)

Roger Abravanel

Ben Langworthy

Itzhak Shukri Cohen

March 24, 2024

Letter from the Chairman of the Board Benjamin Gabbay

2023 was a difficult and complex year for the State of Israel. It was a year in which internal disputes intensified over the issue of judicial reform. On October 7, Hamas launched a murderous attack on Israel, which led to the Iron Swords War which has yet to end, and to escalation on several fronts. All of us at the Phoenix group bow our heads in memory of the fallen, embrace their family members, send a prayer for the safety of the hostages and the soldiers, and wish the wounded a full recovery.

As a leading financials group that serves people across the country, Phoenix responded immediately to support our community. Through dozens of volunteering programs, we were able to provide solutions and a helping hand to many in need. In the first days of the War, we initiated and led the provision of immediate resources for the Barzilai Medical Center located in the south. Across our businesses, Phoenix ensured full business continuity to all clients with efficient and effective service, as is expected of us. We then provided ongoing, wide-ranging support to our clients, agents, business partners, as well as supporting our employees and each other. The group will continue to work for the benefit of the evacuees, victims, and Israeli society as a whole.

In addition to the war, 2023 brought multiple social, political, and economic challenges. The strength of an organization is tested during challenging times, and I am proud that Phoenix's capabilities, strategic focus, and adaptive

management led to another year of growth and improved performance in core income from Insurance activities and from Asset Management and Credit activities.

Challenging times also underscore the importance of sound corporate governance and capable management to navigate and ensure value creation, risk management, and financial resilience. I am proud of the collaboration with my colleagues on the Board and with management, and believe that these efforts will continue to bear fruit in the years to come.

Looking ahead, the group will continue to focus on strategic execution including accelerated growth, higher profitability, innovation, client service, and financial resilience. Phoenix has developed diverse sources of growing cash flows and proven its ability to consistently distribute attractive dividends, and we intend to continue to work to create and unlock value across the group.

In the near future, the Board of Directors plans to adopt new medium-term targets that will reflect our confidence in the group's CEO, management, and employees to drive continued success and strategic execution.

Together with the Board of Directors, I would like to thank the group's employees and management for .their efforts supporting public causes during these challenging times while also ensuring business continuity and achieving goals and targets during the past year.

Finally, once again I convey our hope for the recovery of the wounded and the speedy return of the hostages.

Benjamin Gabbay

Chairman of the Board, Phoenix Holdings

Part 1

Description of the Corporation's Business

Description of the Corporation's Business

Description of the Corporation's Business - Consolidated

This chapter of the Periodic Report contains a description of the Company's operations and business development in 2023 (hereinafter - the "reporting year" or the "reporting period").1

For simplification purposes, the Group divided the presentation of its operating results into two key activities: The first - Insurance; and the second - Asset Management and Credit.

Activity structure:

The said activities are divided in the Report into seven reporting segments. The insurance activity is divided into three reporting segments - life and savings, Property and Casualty, and health insurance. The Asset Management and Credit activity is divided into four further reporting segments - asset management - Retirement (Pension and Provident), asset management - Investment House and Wealth, Credit and Distribution (Agencies). The various segments shall be named hereinafter in the Report on the Company's Business as "activities" or "segments".

In its insurance activity, the Company operates through The Phoenix Insurance Company Ltd.;

In the asset management and credit activity, the Company operates in the different subsegments mainly through The Phoenix Pension and Provident Funds Ltd., The Phoenix Investment House Ltd., The Phoenix Advanced Investments Ltd., The Phoenix Insurance Agencies 1989 Ltd. and the agencies it owns and holds; and through Gama Management and Clearing Ltd. - a reporting corporation wholly-owned (indirectly) by the Company;

As of the report date, the Group has approx. NIS 433 billion in assets under management. For a breakdown of the assets under management, see Section 4.4.3 below.

The report was prepared in accordance with the Securities Regulations (Periodic and Immediate Reports), 1970, and with respect to the Group's insurance, pension and provident fund operations - in accordance with circulars and guidance issued by the Commissioner of Capital Market, Insurance and Savings Authority.

• Pursuant to Regulation 8C of the Securities Regulations, the provisions of Regulation 8(b) 8A and 8B of the Securities Regulations do not apply to information in the periodic report of a corporation that consolidated or proportionately consolidated an insurer or where the insurer is its associate, insofar as this information pertains to the insurer.

The Phoenix Holdings Ltd.

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Description of the Corporation's Business

The materiality of the information contained in this Periodic Report, including the description of material transactions during the reporting year, is examined from the Company's perspective, and in some cases, the description is extended beyond the reporting year to provide a more comprehensive view of the subject matter. Chapter A of this report - "Description of Company's Business", should be read together with all other parts of the Periodic Report, including the Report of the Board of Directors and the notes to the Financial Statements. As part of the Company's policy to increase its exposure to international investors, it adopted a voluntary reporting policy in English. For further details, see the Company's immediate report dated February 25, 2021 (Ref. No. 2021-01-023287).

Forward-looking information

This report contains forward-looking information, as defined in the Securities Law, 1968. Among other things, this information contains forecasts, goals, estimates and assessments relating to future events or matters, including reference to risk factors and developments other than those described in the report, the materialization of which is uncertain and may be affected by various factors that are beyond the Company's control.

Forward-looking information is not a proven fact and is based, in part, on the Company's estimates, which are based on various, diverse data and entities that have not been verified or confirmed by the Company.

It is clarified that actual future results may differ than those described in this report. Forward-looking information in this report refers exclusively to the date on which the report was written, and the Company is under no obligation to revise and/or change any information pertaining to forward-looking information as it appears in the report, insofar as it becomes aware of any additional information in connection with such information.

Reference to forward-looking information in this report generally includes terms such as "assessment," "expectation," "intention" and the like.

Monetary values in this chapter and in the Report of the Board of Directors are generally in millions of NIS (unless otherwise stated). Monetary values stated in the financial statements are generally in thousands of NIS (unless otherwise stated).

The Company's business and terms specific to the insurance and finance industries

The Company's business are in sectors that require considerable professional knowledge and contain numerous professional terms. To clarify the information presented in this report wherever possible, the description of the Group's operations makes use of these professional terms, accompanied by the clearest possible explanations and notes.

The description presented in this report is for the purpose of the report alone, and does not constitute advice or a recommendation in relation to the insurance policies, provident funds, mutual funds, and alternative investment products, pension funds and other areas of activity detailed in this report, nor should it be used to interpret the insurance plans or rules and miscellaneous regulations.

The binding terms and conditions of the Company's policies, provident funds, pension funds, mutual funds, alternative investment products and other products are those terms and conditions specified in the policies, pension fund and provident fund articles, and in the various agreements made in the Company's other areas of activity.

The Phoenix Holdings Ltd.

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Description of the Corporation's Business

Table of Contents

Glossary of Terms	5
Part A The Company's Activity and Description of the Development of its Business	8
1.1.	The Group's Activity and Description of the Development of its Business	9
1.2.	The Group's Structure	9

1.3. Key Milestones in the Development of the Group's Business during the Reporting

	Year and until the Report Publication Date	12
	1.3.23 Dividend distribution policy and actual dividend distribution	24
		1.3.23.1	Dividend distribution policy	24
		1.3.23.2 Dividend distribution and retained earnings	24
		1.3.23.3 External restrictions on dividend distribution	25
		1.3.23.4	Share buyback	25
1.4	Areas of Activity		28
	1.4.1	Life and savings	28
	1.4.2	Property and casualty insurance	28
	1.4.3	Health insurance	29
	1.4.4 Asset management - retirement (pension and provident)	29
	1.4.5	Asset management - investment house and wealth	29
	1.4.6	The Credit Segment	29
	1.4.7	Distribution (agencies)	30
1.5	Additional Operations that Do Not Constitute Areas of Activity	30
	1.5.1	Other investing activities	30
Part B Description of the Group's business by operating segment	31
2.1	Life and savings		32
2.2	Property and casualty insurance	47
2.3	Health insurance		58
2.4	Asset management - retirement (pension and provident)	70
2.5	Asset management - investment house and wealth	92
2.6	The Credit Segment	120
2.7	Distribution (agencies)	155
The Phoenix Holdings Ltd.		1-3

Description of the Corporation's Business
Part C	Additional Information about Insurance Areas of Activity Not Included in the Areas of
Activity		169
Part D Additional information at Company level	171
4.1	Restrictions and Regulation to which the Group's Activity is Subject	172
4.2	Entry and Exit Barriers	198
4.3	Critical success factors	203
4.4	Investments	204
4.5	Reinsurance	215
4.6	Human capital	226
4.7	Marketing and distribution	232
4.8	Suppliers and Service Providers	235
4.9	Property, Plant & Equipment	237
4.10	Seasonality	241
4.11	Intangible assets	241
4.12	Financing	242
4.13	Risk factors	246
4.14	Material agreements	247
4.15	Business targets and strategy	247
Part E Corporate Governance Aspects	248
5.1	Details regarding the Company's External Directors	249
5.2	Information about the Company's Internal Auditor	249
5.3	Information about the independent auditor	252
5.4	Effectiveness of Internal Control over Financial Reporting and Disclosure	253

The Phoenix Holdings Ltd.

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