Midroog puts 9 insurance cos on watch list
"Cancellation of the fixed pension coefficient in managers insurance policies will affect the profitability of the insurance companies."
The companies on the watch list are Ayalon Holding Ltd. (TASE: AYAL), a target=new href=https://www.ildinsur.co.il/Pages/default.aspx>Hachshara Insurance Holdings Ltd. (TASE: ILDH) and its subsidiary Hachashara Insurance Ltd., Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) subsidiary Clal Insurance Ltd., Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), Menorah Mivtachim Holdings Ltd. (TASE: MORA) and its subsidiary Menorah Insurance Ltd., and The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) and its subsidiary Phoenix Insurance Ltd. Bonds of Menorah Mivtachim and Hachshara Insurance were also given a "Negative" outlook.
Midroog says, "Cancellation of the fixed pension coefficient in managers insurance policies will affect the profitability of the insurance companies, by narrowing the difference between these policies and pension funds. The latter have variable coefficients based on the actuarial tables and lower management fees than managers insurance policies. However, cancellation of the fixed pension coefficient could strengthen the insurance companies in the long term and reduce their future insurance commitments."
Midroog adds, "The position paper's findings about the lengthening life expectancy… will mainly affect the increased insurance reserves required by the insurance companies against the commitments for pensions in life insurance policies that include a guaranteed pension coefficient. This is liable to reduce the shareholders' capital of the insurance companies."
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
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