The insurance sector in Israel is oligopolistic – the five largest insurers account for more than 85% of total managed assets according to a report by the Midroog Consulting Firm.

These groups provide a range of products in the life, health and nursing and non-life insurance sectors as well as managing companies which run pension and provident funds.

With the aim of increasing competition in the insurance market, the parliamentary finance committee recently approved a proposed Ministry of Finance regulation that will reduce the minimum capital required for a new insurance company, thus enabling new players to enter this confined market.

The change in equity requirements is notable and increases the opportunity for new investors to consider establishing insurance activities in Israel.

The capital requirement for:

  • a life insurance company has been reduced from NIS52 million to NIS15 million (approximately $5 million);
  • a general insurance company has been reduced from NIS59 million to NIS10 million (approximately $2 million and NIS15 for liability insurance companies); and
  • life and general insurance companies has been reduced from NIS89 million to NIS25 million (NIS30 million for a liability insurance company).

According to a statement issued by the Ministry of Finance, this reduction of required equity should encourage new insurance companies to enter the market, including entities that prioritise technological innovation. As a result, this should contribute to an increase in the supply of insurance products and price reductions for insureds.

The Finance Minister Moshe Kahlon stated that:

"This is another step in the struggle to weaken regulation, bureaucracy and centralization in the economy. The time has come to open up the market to a new-generation of technological players who will inject energy into competition in the insurance industry."

The Commissioner of Capital Markets, Insurance and Savings Dorit Selinger added that:

"Reducing entry barriers will contribute to advancing competition in the Israeli insurance market. The entry of new technology-based and innovative companies that will offer innovative products will contribute to the development of the insurance market in Israel and to the welfare of the insured public."

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.

For further information on this topic please contact Guy Shmueli at Levitan, Sharon & Co by telephone (+972 3 688 6768) or email ( The Levitan, Sharon & Co website can be accessed at