Drama: direct insurance you will not be able to market comprehensive car insurance policies

It is not every day that a regulator in Israel mounts a direct attack on a company that operates under him, certainly not when it comes to the largest company in the industry. This time, the Capital Market Authority, led by Commissioner Amit Gal, showed that those who do not take it seriously enough may be harmed.

● Winking at Japanica and preparing for a new wave of IPOs: the Tel Aviv Stock Exchange launches two new indices
● The largest purchase for Torfaz: buys a perfume company from New Jersey for 95 million dollars

Globes has learned that Direct Insurance Company, which holds the largest market share in comprehensive car insurance (property car), amounting to 14.7% of the industry, will not be able to sell car insurance from now, the month of May, until it receives the authority’s approval again. It is difficult to overstate the importance of the event. The company, which is the most dominant factor in the market, found itself out of the field, at least temporarily. An extreme and rare sanction imposed on it by the regulator.

The reason is that Direct Insurance did not reach agreements with the Capital Market Authority on the reduction of insurance premiums, unlike seven other insurance companies (Hafenix, Menorah Motvethim, Shomra, Ayalon, Harel, Klal and Ayalon) and one more, Migdal, which already received the “Kosher Certificate” half a year ago because its rates are in order.

The background: the surge in prices and public outrage

The Capital Market Authority started an investigation in 2024, following a jump of more than 60% in the prices of comprehensive car insurance in recent years, or an increase in the price of thousands of shekels per car every year. The public outrage at the insurance companies was great. The feeling was that the companies are taking advantage of the war of iron swords to raise prices – and with them also their profits, which have been breaking records in recent years.

The insurance companies admittedly explained the increases in the increase in the volume of thefts and the price of spare parts, but the Capital Market Authority found that this was only a partial picture. For its part, the Authority found a significant gap between the rates charged by some insurance companies and the actual level of risk for them. “Substantial discrepancies were discovered between the cost of the claims and the inherent risk and between the cost of the premium collected from the insured,” the authority wrote at the time.

Simply put, the price increase was very sharp and unjustified, and the prices are too high. The authority decided to use the regulatory whip – a blanket demand to lower prices as a condition for continued activity in the car market. In the last year, comprehensive car insurance prices fell by 17% and in total prices fell by 8% (including mandatory car insurance prices, which rose at the same time).

There are those who claim that this happened as a result of the PA’s activities. Others claim that the companies anticipated a cure for the plague and rushed to lower prices, and there are those who claim that this is a natural movement of prices. At first they go up, then the competition takes its toll and the prices go back down.

Translated into shekels, the decrease is about 1,100 shekels in the price of the comprehensive insurance. In fact, without much effort you can bargain with the insurance company right now and lower the price you will pay in the coming year.

According to a test carried out by Globes in February, the drop in comprehensive car insurance prices over the past year was felt especially in models such as the Toyota Rav 4, where a 20% drop was recorded, as well as in the Mazda CX 5 and Hyundai Ioniq, whose comprehensive insurance was reduced by 16%. The Kia Sportage was down 15%, the Hyundai Tucson was down 14%, and the Toyota Corolla, Kia Niro and Kia Picanto were down 12%. In the case of the Mitsubishi Outlander there was a decrease in insurance of 9% and in the Mazda 3 of only 5%.

The fight over the tariffs: eight against one

The Capital Market Authority examined nine major insurance companies. The Migdal company was the first to receive a “kosher certificate” already about six months ago, after it was proven that its prices meet the required standards. The eight remaining companies were required to submit updated and reduced rates by the end of April.

According to the Capital Market Authority, “with the end of the deadline set by the Authority for submitting updated rates for mandatory car insurance, seven of the eight companies that were required to update the rate completed the procedure, and received the approval of the commissioner for updated rates. One company, which did not complete the procedure by the end of the deadline, is no longer allowed, as of May 1, 2026, until further notice, to offer for sale a property vehicle insurance policy.”

To understand the orders of magnitude in question, one should look at the industry data, as provided by the Knesset’s Information and Research Center. In 2023, the insurance companies paid an amount of NIS 11.3 billion for claims in the field of property vehicles (comprehensive and third party). 92.5% of the payments resulted from accidents and the rest (8.5% which is NIS 963 million) were payments following thefts. The total premiums collected by the companies that year in the property vehicle sector reached NIS 12.15 billion, according to data from the Capital Market Authority. With regard to direct insurance, its profit in the property vehicle sector in 2025 amounted to NIS 274 million, which accounted for over 70% of the total profit presented by the company.

The supervisor’s warning: “We are serious”

Amit Gal, the head of the Capital Market Authority, left no doubt about his determination. At the Globes investment conference held last week, Gal addressed the issue directly and stated that “there are individual companies that did not align with the demand to lower car insurance. If there are companies that do not want to reach (agreements), they will not be there. We are serious about this.” It seems that these words have become a painful reality for direct insurance.

This is not the first time that direct insurance is targeted by the Authority. Last December, the company (and the Phoenix) was fined NIS 125,000 due to a delay in transferring data and missing information at the commissioner’s request. A conditional financial sanction was also imposed on Wishor. It seems that the authority recognized a pattern of foot-dragging and decided to intensify the measures.

What will direct insurance management do?

The ball is now in the hands of Direct Insurance Management. The company will have to decide whether to “fold” and submit reduced rates that meet the Authority’s requirements, or continue the fight that is costing it valuable market share every day. What is certain is that the Capital Market Authority has marked a clear red line: the exorbitant prices of car insurance cannot continue, and the regulator is ready to use its strongest weapon to protect the pocket of the Israeli consumer.

In response, Direct Insurance stated: “Direct Insurance and the Insurance Supervisor continue to conduct a substantive dialogue with the aim of reaching the approval of an adequate and attractive rate for customers.”