New Insurer Ailon Struggles to Stand Out Despite Strong Recruitment
Translated & summarized from Globes by baba
New insurer Ailon is experiencing a second month of weak returns in September, with slight negative performance in general provident funds and minimal positive returns in stock tracks. This contrasts with aggressive marketing efforts and strong recruitment, raising about NIS 1.4-1.5 billion in September. The company's underperformance is attributed to its significant exposure to the Israeli market and rising bond yields. Investment house Altshuler Shaham Finance, also facing challenges, is in the process of being acquired by Ailon's parent company, Visure.
The story in 5 lines · by baba
- New insurer Ailon is expected to report weak returns for September, continuing a trend from August.
- Ailon's provident fund returns are projected at -0.1% for the general track and 0.25% for the stock track.
- The company has successfully recruited NIS 1.4-1.5 billion in September due to strong agent marketing.
- Underperformance is linked to high exposure to the Israeli market and rising bond yields.
- Altshuler Shaham Finance, also facing weak returns, is being acquired by Ailon's parent company, Visure.
Ailon, a new player in the provident funds sector, is reportedly set to post unimpressive returns for September, marking a second consecutive month of subpar performance. In the general track of provident funds, Ailon is expected to show a slight negative return of 0.1%, placing it around the middle of the industry table. In the stock track, a modest positive return of approximately 0.25% is anticipated, likely positioning the company in the lower tier of returns.
This follows a similar trend in August, when Ailon's returns, particularly in the stock track, were among the lowest in the industry. Performance in Ailon's savings policies, managed by the same investment team, mirrors these results, with a 0.1% decrease in the general track and a 0.09% positive return in the stock track for September.
Ailon has been marketing itself aggressively, aiming to attract significant capital with promises of top industry returns, a strategy previously successful in its savings policies. However, its current performance is attributed to its investment positions. The company has a relatively higher exposure to Israel compared to competitors, and the Israeli market has underperformed international markets recently, with the TA-90 index dropping nearly 3% last month. Additionally, Ailon's larger position in tradable bonds, both domestic and international, has been negatively impacted by the sharp rise in US yields exceeding 5%.
Despite the challenging returns, Ailon has seen robust recruitment, managing approximately NIS 2.6 billion in provident funds, with NIS 1.4-1.5 billion raised in September alone. This rapid growth is largely credited to insurance agents who are enthusiastically marketing the company. A senior competitor described Ailon as a "company of agents" with a strong team, including investment manager Tamir Hershkovitz, and a buzz surrounding its smaller size.
Meanwhile, investment house Altshuler Shaham Finance also faced difficulties in August, with expected returns in the lower range, despite Wall Street's outperformance of the Tel Aviv Stock Exchange. This is possibly due to exposure to bonds amidst rising yields, although its stock component likely performed well. Altshuler Shaham Finance is currently in the process of being acquired by Visure, the parent company of Ailon.