The Insurance Industry in Israel

1
The Insurance Industry in Israel
STATE OF ISRAEL MINISTRY OF FINANCE
2
Market Overview

• Market Structure

25 domestic insurers
2 foreign insurers

• 12 non-life
• only.

13 composite
5 insurance groups 95 of life
premiums 75 of non-life premiums
3

• Foreign ownership of domestic insurers

20
100
51
60
Credit Insurance Insurer
Mortgage Insurance Insurer
Composite insurer
Largest Life Insurer
4
Market Outline - 2003

• Net earnings- US 600 million
• Owners equity - US 1.7 billion
• Insurance liabilities - US 29.1 billion
• Return on equity - 5 years average 27.5

5
Market Development
Average annual growth of assets 11
33
13
6
7
4.8
3.9
2.8
2
3.1
7
6.3
6.3
3.5
3.5
2.8
2.8
8
1,033
875
576
525
458
350
9
Regulation Framework

• Main laws

Insurance business supervision law
Insurance contract law
Insurance Regulations
Commissioner's Circulars
10
Insurance Business Supervision Law
Licensing
keeping insurers solvency
Consumer protection
Business supervision
Minimum capital
Financial reports
Investment
Technical provisions
Reports requirements
11
Commissioners Goals

• To assure optimal security to consumers of the
  financial services
• insurance, provident funds and pension funds.

12
Recent reforms and current initiatives

• Institutional level solvency, liberalization
  and market governance
• Consumer level transparency and fairness,
  competition

13

• Institutional level-
• since 2001- liberalization of investment
  regulations
• The role and appointment of an actuary
• Require each insurer to appoint an actuary
• Actuary law.

14

• Insurers risks assumption model modeled on the
  Canadian version.
• Insurance fraud-
• A private operated, central database is be
• established for motor bodily injury

15

• Consumer level
• Automobile liability insurance-
• Assumption of all pricing risk by private
  insurer
• Premium rates vary by automobile and driver
  characteristics
• Premium rates vary from insurer to insurer

16

• Life Insurance transparency of premium paid by
  the insured
• Risk
• Savings
• Expense charges

17

• Long-Term Care
• Mission
• Assure that private long-term-care insurance
  will continue to be widely affordable to Israeli
  residents including senior citizens.

18

• Group policies
• In case of termination of the cover,
  option to join individual policy without evidence
  of insurability.
• Individual policies
• Provide premium rates that do not vary by
  age after 65
• Benefit triggers
• not more than the Inability to perform 3
  activities of daily living or cognitive
  impairment