Insurance firm Israel Phoenix Assurance Ltd. (TASE: PHOE1;PHOE5), a Delek Group Ltd. (TASE: DLEKG) unit, will begin offering professional liability insurance coverage to investment houses and other financial institutions.
Phoenix explained that there is currently a market failure in Israel, since every investment house is required by law to carry this type of insurance, but for many it is simply unavailable.
Until now, the leaders in the field of professional liability insurance for investment houses and financial institutions have been Menorah Mivtachim Holdings Ltd. (TASE: MORA) and Harel Insurance Investments Ltd. (TASE: HARL).
The move could make it easier for financial institutions to comply with the law requiring them to carry that coverage. Many have not renewed their insurance policies. However, the policies to be offered by Phoenix are to be 2-3 times more expensive than previous polices, and small brokerage firms will still have difficulties finding insurance.
Phoenix reached agreement with four British reinsurance firms three of which are from the Lloyds market to offer the insurance.
Phoenix will not offer the insurance to hedge funds.
Published by Globes [online], Israel business news - www.globes-online.com - on January 15, 2009
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