Direct Insurance – Financial Investments: Results for the Third Quarter of 2008 8/12/2008    * The total premiums earned by the Polish company, LINK4, amounted to approximately NIS 94.4 million, a 19% increase compared to the corresponding quarter in the previous year. *A quarterly growth of 11% in the premiums earned from general insurance in Israel. * A quarterly growth of 18% in the premiums earned from life insurance and long-term savings in Israel. * The insurance portfolio in Russia has grown to a total of 7,000 policies as of the date of publishing of the report. * Insurance activity in the Czech Republic continues to grow rapidly with more than 30,000 polices as of the date of publishing of the report. * The total sum of the group's earnings in the first nine months of 2008 amounted to NIS 900 million. Today, Direct Insurance – Financial Investments is publishing the results of activities for the third quarter of 2008. For complete details of the results, please see pages 35-38 in the financial statements and page 7 in the board of directors' report. Main Results of the Polish Company, LINK4, for the Third Quarter of 2008 * The premiums earned from general insurance totaled approximately NIS 94.4 million, compared to approximately NIS 79 million in the corresponding quarter in the previous year, a growth of 19%. The company's share (50%) in the premiums earned totaled approximately NIS 47.2 million. The increase in the volume of premiums earned was partly offset due to an obligatory charge of 12% of the insurance fees for third party car insurance policies imposed on insurance companies in Poland. * The company's share in losses from general insurance totaled approximately NIS 4.4 million, compared to profits in the corresponding quarter. Main Results of the Czech Company, DIRECT, for the Third Quarter of 2008 * The premiums earned totaled approximately NIS 6.9 million. The company's share in the premiums earned totaled NIS 3.4 million. * As of the date of publishing of the report, the insurants' portfolio in the Czech Republic includes more than 30,000 policies. Main Results of the Russian Company, Intouch Russia, for the Third Quarter of 2008 * The premiums earned totaled approximately NIS 3.4 million. The company's share in the premiums earned totaled approximately NIS 1.7 million. * As of the date of publishing of the report, the insurants' portfolio in Russia includes approximately 7,000 policies. Main Results of the Subsidiary, IDI DIRECT (the Israeli holdings company), for the Third Quarter of 2008 * Total income (from insurance, savings and consumer credit) amounted to approximately NIS 232.1 million, an increase of 12% compared to the corresponding quarter in the previous year. * The premiums earned from general insurance totaled approximately NIS 177.4 million, compared to NIS 160.2 million in the corresponding quarter in the previous year, an increase of 11%, which is due to the increase in the insurants' portfolio. * The premiums earned from life insurance and long-term savings totaled approximately NIS 41.9 million, compared to approximately NIS 35.4 million in the corresponding quarter in the previous year, an increase of 18%, which is due to the increase in the insurants' portfolio. * Profits from general insurance totaled NIS 0.3 million, compared to NIS 25.8 million in the corresponding quarter in the previous year. The decrease derives from the sharp decreases in the financial markets in Israel and worldwide, the increase in the consumer price index, which influenced the revenues from investments and insurance liabilities, and the increase in the volume of insurance claims. * Profits from life insurance and long-term savings totaled approximately NIS 7.8 million, compared to approximately NIS 0.9 million in the corresponding quarter in the previous year. * Consumer Credit- revenues totaled approximately NIS 7 million, with a loss of NIS 5.7 million. The credit portfolio of the company as of 30/09/08 amounts to NIS 265 million. * DIRECT IDI reported a loss of NIS 12 million in the current quarter, compared to a loss of NIS 4.8 million in the corresponding quarter in the previous year. Main Results for the Consolidated Activities in the Third Quarter of 2008 * Revenues totaled approximately NIS 309.6 million compared to a total of NIS 289.2 million in the corresponding quarter in the previous year. The slight decrease derives from the deduction of RSA's share in the revenues from international insurance activity. * The premiums earned from insurance (company's share) totaled approximately NIS 272 million (net of RSA's share of NIS 52.7 million), compared to NIS 275 million in the corresponding quarter in the previous year. * The loss from investments totaled approximately NIS 5.4 million, compared to profits from investments of NIS 26.9 million in the corresponding quarter in the previous year. * The company reported a quarterly loss of NIS 45.7 million, compared to a loss of NIS 42.2 million in the corresponding quarter in the previous year. The loss derives from a combination of several factors: * Expenses relating to establishing insurance activities in the Czech Republic and Russia and financial and consumer credit activities in Israel * An increase in the volume of insurance claims in Israel and Russia * A decrease in investment profits and the rise in the consumer price index Mr. Doron Schneidman, CEO of company, concludes: "In this quarter we have witnessed the continued growth in the group’s volume of activities in all of the territories in which we operate. Since the beginning of the year, total consolidated revenues amounted to approximately NIS 900 million. Alongside the impressive continued growth, we see the losses in the bottom line, which derive mainly from the launching of activities in Russia at the beginning of the second quarter, the increase in financing expenses due to the high price index and, of course, the heavy blow to investment profits." Schneidman continues: "Recently, we have reported the completion of an investment deal with the EBRD concerning the Russian activity preformed by Intouch Russia. The fact that we have managed to complete the deal in the midst of a period of uncertainty in financial markets worldwide constitutes an additional proof of the international recognition of our abilities to successfully develop direct insurance ventures in developing markets worldwide. As for our activities in Russia, we believe that this market has a significant potential despite the uncertainty and the recent incidents in the country and we continue to believe in our ability to create a significant portfolio in this country and the results for this quarter provide the first indications to this effect.”