An industry in trouble: The first three quarters of 2022 constitute one of the most difficult periods in the history of the auto insurance industry among Israeli insurers, after they recorded a cumulative loss of approximately NIS 1.8 billion.
This, compared to a profit of NIS 418 million recorded in the 2021 summary.
The heaviest loss was incurred by the comprehensive car insurance sub-sector, in which the insurance companies in Israel lost 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 in contrast to 2021, which ended with a profit of NIS 154 million - a figure that reflects a 540% dive.
The data was collected and processed by Hagi Shapira, a strategic consultant in the field of insurance.
Adv. Assaf Varsha, co-chairman of the tort forum at the Bar Association, explains the reasons that led to the considerable losses:
The 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 pockets of insurance companies in Israel.
In quite a few cases, this involves the theft of expensive vehicles, the value of which exceeds the limit of 200 thousand shekels.
The insurance companies and the Israel Police are dealing with an increase in the number of car gangs and also with a jump in the scope of the use of technological means, which allow the criminals to effectively disappear the vehicles, for example jammers.
Car accident, photo: Gettyimages, illustration
car accidents
According to the data of the Central Bureau of Statistics, until October 2022 there were 8,639 road accidents with casualties - a similar number was 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 vehicle is about NIS 15,000. "The increase in the number of new vehicles moving on the road has certainly contributed to a jump in the amount of accumulated damage to insurance companies for tin damage."
Losses in the capital market
Hagai Shapira, from "Polisa" magazine, points out that 2022 is a particularly bad year, also due to the losses of companies in the capital market: about 354 million shekels, compared to record profits in the corresponding period last year, amounting to about two billion shekels.
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 forced the insurers to reduce the amount of the premium.
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