Israeli Insurance Agency Profit Eyes Move Into Pension Fund Management
Translated & summarized from Globes by baba
Profit, a large Israeli insurance agency, is exploring a move into managing pension and provident funds, aiming to become a direct investment manager rather than just a distributor. Co-owners Assaf Banai and Shlomi Alberg plan to leverage AI for cost efficiency and lower fees, potentially competing with current partners. The company's financial position is strengthened by a recent investment from Leumi Partners and Steinitz, valuing it at NIS 670 million.
The story in 5 lines · by baba
- Profit, an Israeli insurance agency, is considering becoming a direct manager of pension and provident funds.
- The move would transform Profit into a competitor against the institutional entities it currently serves.
- Co-owners Assaf Banai and Shlomi Alberg aim to reduce costs using AI and offer lower management fees.
- Profit manages NIS 130 billion in assets and recently secured a NIS 100 million investment.
- The Israeli long-term savings market is valued at NIS 3.3 trillion and growing annually.
Profit, a major distributor of long-term savings products in Israel, is reportedly considering a significant shift into managing pension and provident funds. The move, spearheaded by co-owners Assaf Banai and Shlomi Alberg, would transform Profit from a client-acquisition agency for institutional entities into a direct investment manager. This strategic pivot aims to capture a larger share of the lucrative NIS 3.3 trillion long-term savings market, which generates approximately NIS 15 billion annually in management fees.
Profit, which currently oversees NIS 130 billion in assets through its network of over 300 agents and financial planners, would directly compete with the insurance companies and investment houses whose products it currently markets. This potential move raises concerns about conflicts of interest, and regulatory approval from the Israel Capital Market Authority is anticipated.
Banai reportedly envisions Profit becoming the "Rami Levy of the long-term savings market," focusing on cost reduction through AI and operational efficiency, contrasting with the perceived inefficiencies of larger institutional players. This strategy aims to offer lower management fees to the public, benefiting both savers and Profit.
Profit's financial capacity for this expansion is bolstered by recent investments. In early 2024, Leumi Partners and consumer goods importer Steinitz acquired a 15% stake in Profit for NIS 100 million, valuing the company at NIS 670 million post-investment. Profit, established in 2006, has a history in investment management, having previously launched and later delisted the investment house Magneitor after it incurred significant losses for investors.
The Israeli long-term savings sector is experiencing substantial growth, with assets increasing 12-16% annually. Despite high entry barriers, new players like Ayalon Insurance and Pasternak have recently entered or expressed interest in the field, indicating a competitive landscape.