Insurance Agent Commissions in Israel Hit Record Highs

Total commissions paid to insurance agents in Israel have reached a new record, surging by approximately 46% over the past five years. The market has seen consistent growth, with total commissions rising from around NIS 9.05 billion in 2020 to an estimated NIS 12 billion in 2024, and projected to reach NIS 13.2 billion in 2025. This represents a 10% increase in just one year and a total increase of NIS 1.2 billion from 2024 to 2025. The growth in commissions significantly outpaced the general market index, indicating real growth in agent earnings.

The surge is largely driven by the pension and provident funds sector, which saw a 16% annual increase in commissions. Unlike general insurance like car or home policies where commissions are based on annual premiums, pension and provident fund commissions are significantly tied to the accumulated assets within the funds. As these asset pools grow due to market returns and ongoing contributions, agent commissions automatically increase without new sales or actions.

Israel has over 13,000 insurance agents, with a growing number earning substantial incomes. Approximately one-third of agents earn over NIS 500,000 annually, and 13% (around 1,700 agents) exceed NIS 1 million per year. However, these figures represent gross income before expenses like office operations and staff. Additionally, bonuses and other incentives are not included in these commission totals.

These commissions are not paid directly by policyholders but are funded by insurance companies and institutional bodies through management fees and premiums that customers already pay. This means the NIS 12 billion paid in commissions annually ultimately comes from the pockets of insured individuals and savers, even if not explicitly itemized on their bills.

Regulators are exploring ways to increase transparency, including mandatory annual reporting by agents on their earnings and potential conflicts of interest. There is also consideration of models where clients pay agents directly, bypassing the current indirect payment structure. The underlying driver for continued commission growth is the substantial increase in long-term savings assets, which reached NIS 3.3 trillion by the end of 2025, fueled by market performance and mandatory contributions.