Israeli Insurance Agents See Record Commissions Amid Regulatory Scrutiny

Insurance agents in Israel experienced a record year in 2025, receiving 13.23 billion shekels in commissions, a 10% increase from the previous year, according to a report by the Capital Markets, Insurance and Savings Authority. Since 2022, commissions have surged by 2.8 billion shekels, or 27%. The most significant growth was observed in health insurance, where commissions rose by 25% to 3.59 billion shekels. Pension and retirement fund commissions increased by 19% to 3.14 billion shekels, while general insurance, primarily auto and home policies, saw a modest 3% rise to 3.63 billion shekels. Life insurance commissions, however, declined by 3% to 2.87 billion shekels.

The substantial increase in health insurance commissions is attributed not only to rising premiums, driven by population growth and asset accumulation, but also to a higher commission rate. In 2025, commission rates averaged 21.97% of premiums, up from 18.57% in 2024, meaning nearly 22 out of every 100 shekels paid by policyholders went to agents. For example, Ayalon saw its rate jump from 16.33% to 27.15%, and Clal's rate stood at 26.59%.

Amidst the growth of Israel's pension market, which manages over 1.1 trillion shekels, the number of pension insurance agents increased by 3.6% to 11,782. The number of active insurance agencies grew at a slower pace of 0.8% to 2,138. The authority suggests the rise in agencies reflects the attractiveness and profitability of insurance intermediation.

However, Capital Markets Authority head Amit Gal warned that reliance on intermediaries and current compensation methods could create conflicts of interest. In response, the authority has expanded reporting requirements for commissions, direct client payments, and outsourcing agreements. While agents play a crucial role in guiding clients through complex products and claims, their commission-based compensation, typically paid by insurers, can incentivize them to promote more profitable products rather than those best suited for the client. This concern is particularly acute in health insurance, where high commission rates may lead clients to overpay for redundant coverage or outdated policies.