Ayalon Wins Clalit’s Massive Group Long-Term Care Insurance Contract Starting 2027

Clalit Health Services announced that Ayalon Insurance will manage its group long-term care insurance policy covering approximately 2.7 million insured individuals. Ayalon was the sole bidder in the tender, which was expected to attract multiple major insurers. The contract begins on January 1, 2027, for an initial three-year period, with options to extend up to eight years total.

This marks the end of a long-standing partnership between Clalit and Harel Insurance, which has managed the policy since 1998, either directly or through its subsidiary Dekel. The other three health funds in Israel have agreements with Menora Mivtachim. While policy terms for Clalit members will remain unchanged, starting next year insured individuals will need to contact Ayalon’s call center for claims.

Ayalon currently holds a relatively small long-term care portfolio, mainly private policies discontinued in 2019, with annual premiums around 38 million shekels. Managing Clalit’s policy, effectively the world’s largest group long-term care insurance, represents a significant operational and actuarial challenge for Ayalon, given the policy’s complexity and scale.

The sector faced a crisis two years ago when no insurer initially bid to manage Clalit’s policy, risking the collapse of coverage for a quarter of Israel’s population. This was due to fears that Clalit’s claims fund would be depleted. Regulatory tightening and reduced insurer liability led Harel to extend its contract until the end of 2026, stabilizing the fund, which is estimated to have grown from several hundred million shekels to about 2.5 billion shekels in recent years.

Ayalon’s entry into this market signals both risk and opportunity, as it takes on a pivotal role in managing a critical insurance product for millions of Israelis.