Aging population and strong economy will spur Israel’s life insurance market

24 May 2016

The new report by Timetric’s Insurance Intelligence Center (IIC) finds that the Israeli life insurance gross written premium recorded good performance over the last five years, growing from ILS21.0bn (US$5.6bn) in 2010 to ILS30.6bn (US$8.6bn) in 2014, at a CAGR of 9.8%. Over the next couple of years the life segment is expected to expand further, although at a slower pace, to reach ILS75.7bn (US$16.3bn) in 2019, at a CAGR of 5.4%. Stable economic performance, growing population and rising life expectancy are forecast to be the major drivers behind this growth, the report finds.

Aging population and rising life expectancy to stimulate life insurance demand

The Israeli population aged over 65 increased from 0.84 million in 2010 to 0.90 million in 2014. In 2014, the population in this age group accounted for 11.0% of the total population, which Timetric's IIC forecasts to increase to 13.7% by 2030. This will likely boost consumer awareness towards post-retirement savings, and drive a greater demand for life insurance products.

According to the World Health Organization, Israel has one of the highest life expectancies in the world, standing at 82.5 years in 2013. Jay Patel, Insurance Analyst at Timetric's IIC, comments: "The country's aging population should benefit life insurers, as the importance - and therefore the demand - of savings products increase. We expect this trend to support growth in the Israeli life insurance segment over the next 4 to 5 years."

Robust economy will contribute to life insurance growth

Israel has shown resilience towards the economic crisis, having grown faster than its OECD counterparts during the last five years. Israeli GDP grew by 3.2% in 2013 and 2.8% in 2014, with the country's real GDP increasing from ILS870.8bn (US$232.7bn) in 2010 to ILS991.6bn (US$277.1bn) in 2014, at a CAGR of 3.6%. "The discovery of the new Tamar and Leviathan oil and gas fields - with estimated capacities of 9 trillion cubic feet (TCF) and 19 TCF, respectively - is expected to guarantee Israel's position as an energy exporter up until 2019. This should strengthen the country's energy security and provide a boost to the economy once the fields come on-stream. The economic activity created by these projects will increase employment and therefore demand for life insurance and pension products," Patel says.

All information is based on the Timetric report: 'Life Insurance in Israel, Key Trends and Opportunities to 2019'.

Source: Company Press Release