Asian and African Reinsurers Gain Ground as European Firms Reduce Israeli Market Presence
European reinsurers have historically dominated Israel's reinsurance market, but recent insurance company reports from Weshur and Libera reveal a shift. Increasingly, risk is being transferred to reinsurers from Asia and Africa, as some European players scale back their Israeli operations and smaller insurers seek more competitive options. For example, by 2025, Africa Re from Cameroon will account for 11% of Libera's reinsurance, Korean Re 10%, and India's GIC 12.5%, up from 10% previously. Weshur relies mainly on Germany's Munich Re for nearly 60% of its reinsurance but also shares 19% with Africa Re and 21% with GIC.
Weshur and Libera focus on competing in auto and home insurance, sectors vulnerable to significant losses, prompting smaller insurers to diversify their reinsurers to mitigate risk. A senior insurance industry official noted that 2022 and 2023 were difficult years with tens of millions in losses in auto insurance, leading some European reinsurers to reduce or exit the Israeli market. Political pressure in Europe to limit exposure to Israel also influences this trend.
European reinsurers like Scor, Swiss Re, and others have recently exited or reduced involvement in Israeli health, pension, and long-term care insurance, citing business and regulatory challenges that made these sectors unprofitable. This reduction affects both small and large Israeli insurers, though larger firms use less reinsurance overall and have begun incorporating non-European reinsurers without significant structural changes yet.
Working with new non-European reinsurers carries risks, including delayed claim payments and potential market exits when conditions change, which could increase insurance costs and reduce bargaining power. To address these challenges, major Israeli insurers are exploring alternatives: Migdal issued a $100 million catastrophe bond in late 2025 to reduce dependence on international reinsurers, while Phoenix has started acting as a reinsurer itself, offering reinsurance to smaller Israeli insurers through a 135 million shekel partnership.
Industry experts emphasize that the shift away from European reinsurers is a long-term process driven by Israel's increased risk perception due to ongoing conflict, which impacts reinsurers' risk appetite. Israeli insurers are adapting by diversifying their reinsurance portfolios and seeking innovative financial instruments to maintain market stability.
