Israeli Savings and Insurance Assets Surge 16% in 2025
The total value of assets managed by institutional investors in Israel, including pension funds, provident funds, and insurance policies, reached NIS 3.315 trillion by the end of 2025, according to a report by the Capital Markets Authority. This represents a significant 15.9% increase in public savings for the year, far outpacing economic growth and inflation, which remained below 3%.
Pension funds held NIS 1.6 trillion, provident funds managed NIS 1 trillion, and insurance policies accounted for NIS 660 billion. The average return on pension savings in 2025 was 14.2%, a notable improvement over the previous five years. Over the 2020-2025 period, average real returns on pension savings were 7.7%, with real equity index returns averaging 13.3% annually, while bond index returns saw a real decline of 0.7%.
Institutional investors shifted their portfolios between 2020 and 2025, reducing their holdings in government and corporate bonds by 5% each. Concurrently, investments in private equity funds rose from 6% to 9%, stocks increased from 25% to 30%, and cash and cash equivalents, primarily short-term deposits, grew from 7% to 11%. This shift was partly driven by rising interest rates and the need for collateral for riskier investments like options and futures.
Within equity investments, there was a significant trend towards domestic assets. In 2020, only 38% of equity exposure was in Israeli stocks, but by 2025, this proportion had reversed to over half (52%).
The insurance sector also showed strong performance. The five largest insurance companies reported combined pre-tax profits of NIS 12.5 billion in life insurance and NIS 4.68 billion in health insurance, a 102% increase attributed to fewer claims and higher co-payments. General insurance, including auto and property, saw profits rise by 19% to NIS 5.39 billion, with the auto insurance segment recovering from previous losses to achieve NIS 2.12 billion in profits.
The report also highlighted the competitive landscape, noting that while the banking sector is highly concentrated, the insurance and provident fund markets are more fragmented, although specific segments like life insurance and new pension funds show higher concentrations. The actuarial stability of insurance companies improved, with existing capital exceeding required capital by 1.6 times, indicating enhanced financial resilience.
