A reduction in the capital required for new insurance companies will make it easier for new entrants to the market.
Two digital insurance companies are set to receive approval and to start business in the first half of 2018. Sources inform “Globes” that these are two separate groups each led by a former CEO of a traditional insurance company: Emil Vainshel, formerly CEO of Ayalon Holding Ltd. (TASE: AYAL) and a senior manager at Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL); and Ester Elishkov, who managed Hachshara Insurance (TASE: ILDN), and came close to being CEO of Ayalon.
The Capital Market Insurance and Savings Authority said in response to the report, “The reduction in capital requirements will make it easier for new companies to enter the market, and they will boost competition. The Authority expects that new insurance ventures will start operating this year.”
At the “Globes” Israel Business Conference last week, Commissioner of Capital Markets, Insurance and Savings Dorit Salinger said, among other things, “We see new entities seeking to enter the market. I believe that competition will come from new models.
The ventures that exist currently are all digital, and I believe that these models will not change the structure of the market, but that they will boost competition, even if their market shares are small.” Also last week, the Capital Market Insurance and Savings Authority and the Ministry of Finance issued a statement on “Reduction in the Capital Required for Obtaining an Insurance Company License,” which received approval from the Knesset Finance Committee.