Israeli Insurance Agencies Consider Shift to Asset Management

Israel's major insurance agencies, which control a substantial share of savings product distribution, are exploring a strategic shift to become asset managers themselves. Profit Group is currently examining the establishment of its own provident fund company, a move that could disrupt traditional market dynamics.

According to a report by the Capital Market, Insurance and Savings Authority, insurance companies and institutional bodies paid licensed distributors commissions totaling 13.2 billion NIS in 2025, marking a 10 per cent increase year-over-year. Out of this total, 3.14 billion NIS was channeled through provident and pension funds alone, surging 19 per cent within a single year.

While major agencies have historically relied on distribution commissions, some are now eyeing a cut of the management fees collected from savers. Legally, an agency with sufficient capital, investment management capabilities, and appropriate control systems may apply for a license to manage provident funds, provided regulators approve the initiative.

Profit Group, controlled by Asaf Banai and Shlomi Alberg, expresses confidence in securing regulatory approval, noting that the move is part of an early strategic vision. Industry experts estimate that a large agency launching its own provident fund could direct roughly 20 to 30 per cent of its distribution volume toward it, though convincing clients requires careful advisory work.

Despite potential opportunities, widespread adoption across independent agencies remains unlikely due to high acquisition costs and the preference of some firms to maintain objective advisory standards. Meanwhile, recent market entries, such as Ayalon Insurance raising approximately 2.2 billion NIS in assets within two months, demonstrate the immense power of distribution channels in reshaping Israel's financial landscape.