Major property damage burdens insurance companies (Photo: ShutterStock)
The year 2022 ended not long ago and although the results of the last quarter have not yet been received, it is possible to state with a high degree of certainty that this is one of the worst years in the history of the insurance industry in Israel.
According to the value analysis of
Hagi Shapira, one of the most senior strategic consultants in the insurance field in Israel, who in the past served as the CEO of Shirbit
, apart from three insurance companies that presented a minor profit, they all bled this year and lost a lot of money.
What is the amount of the loss in question? Below are the five largest companies, the amounts in millions of shekels .
The Phoenix 184.3
Clal Insurance -137.7
AIG closes the list with a loss of NIS 103.6 million
The other companies also recorded quite a loss
Solomon - 80.3
Ayalon - 73.8
Direct - 71.4
Farmer - 31.4
Vishor - 17.9 million
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A red year for insurance companies as well (Photo: Reuven Castro)
Hagai Shapira (Photo: Yehats)
What happened this year that caused the insurance companies losses?
Shapira explains that the two central factors that came together are the erosion of capital market profits and the underwriting erosion of vehicles and property.
As far as the erosion of investment profits is concerned, it is a transition from a profit of about two billion shekels in 2021 to a loss of about 350 million shekels this year.
In addition, they suffered a very heavy loss in the comprehensive car insurance sub-sector, in which the insurance companies in Israel have bled a huge amount of about one billion and two hundred million shekels in the last nine months.
A loss in the amount of approximately NIS 677 million was also recorded in the compulsory insurance sub-sector, this is in contrast to the year 2021 which ended with a profit of NIS 154 million - a figure that reflects a dive of 540%.
Shapira's data was published in the "Polisa" insurance companies' newsletter.
Why did the automobile industry lead to such dramatic losses last year?
Adv. Assaf Varsha (Photo: Shahar Kaleb)
Adv. Assaf Varsha, co-chairman of the tort forum at the Bar Association
, and Hagi Shapira, analyze the reality and point to three main factors.
Erosion of premiums:
Over the past two years, the competition between insurers for the pockets of the insured has increased significantly.
Digital insurance companies broke into the market, which, among other things, forced the other insurers to reduce the amount of the premium, this in order to maintain a sufficient level of competitiveness.
Admittedly, during the year there was a certain increase in the amount of the average premium, but in terms of the result - this did not help them.
Scope and depth of claims for car thefts:
The year 2022 is expected to end with an estimated increase of about 50% in relation to the volume of car thefts recorded in 2021, which directly affects the pocket of the insurance companies in Israel.
In quite a few cases, it is about the theft of expensive vehicles, which are worth over 200 thousand shekels.
The insurance companies and the Israel Police are dealing with an increase in the number of car gangs, as well as a jump in the use of technological means that allow them to effectively make the vehicles disappear, such as jammers.
According to the data of the Central Bureau of Statistics, until October 2022, there were 8,639 road accidents with casualties - a number similar to that recorded in the corresponding period last year.
At the same time, according to estimates, the number of road accidents that ended with property damage is twice as high.
Yehuda Yegan, chairman of the automobile branch of the Association of Appraisers, explains that the average amount of damage to a new car is about NIS 15,000 and to an old car about NIS 9,000: "The increase in the number of new vehicles moving on the road has definitely contributed to a jump in the amount of accumulated damage to the insurance companies for damages tin".