Altshuler Shaham Ltd. is setting up an insurance company. Sources inform ''Globes'' that the company, run by co-CEOs Gilad Altshuler and Ron Shaham, has decided to expand its long-term savings business, and plans to invest tens of millions of shekels in the coming years in regulatory capital and in personnel.
Altshuler Shaham recently applied for a license from Ministry of Finance Supervisor of the Capital Markets, Insurance, and Savings Dorit Salinger to engage in life insurance. The sources said that this activity, which will initially focus on the sale of life insurance policies, including savings, will get underway in a year. The company will manage its insurance business independently, under Altshuler Shaham Provident Fund and Pension CEO Yair Levinstein.
Altshuler Shaham has begun preparing for the insurance permit from the Ministry of Finance. A few weeks ago, it hired Guy Illouz, formerly a VP and business and products manager at Menorah Mivtachim Holdings Ltd. (TASE: MORA). Illouz, a young and talented manager, will be responsible for setting up Altshuler Shaham's insurance company.
Altshuler Shaham currently works with insurance agents and it also owns a new small comprehensive pension fund. The investment house, Israel's fourth largest provident fund and advanced education funds management company, is expected to continue working with insurance agents, in line with its way of operating for its current activity.
Altshuler Shaham is the second investment house that is setting up an insurance company, following Psagot Investment House Ltd.) This involves establishing complex activity from scratch, including high costs for selling policies on top of the huge costs of founding the company and obtaining a license from the Ministry of Finance, while it takes years for revenue to accumulate and for the portfolio to become profitable. The sector is very complex, and is currently dominated by the five big insurance companies, which benefit from economies of scale and extensive ties with insurance agents.
Published by Globes [online], Israel business news - www.globes-online.com - on March 5, 2014
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