"I could have acquired several insurance companies, but I didn’t. why did I buy Migdal? I couldn’t refuse. It's the biggest insurance company and the company where I started out as a messenger," said Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) chairman Shlomo Eliahu at an insurance agents conference in Eilat. He acquired 69% of Migdal from Italy's Assicurazioni Generali SpA (BIT: GASI) a year ago.
"I didn’t have the power to say no to acquiring Migdal; I didn’t have the option of saying no. But I must now transform my belief into substance. For years, Migdal hasn’t considered the non-life insurance activity as a core business, but as a supplementary business. I understand, know, and promise that Migdal will lead non-life insurance activity and the market will be nostalgic for the past. We're on the road."
One of Eliahu's first acts at Midgal was to end direct marketing of non-life insurance. He said, "I may be naive, despite my age. I thought that if I end Migdal's direct marketing of insurance, the agents would say, 'Great. Migdal is retaining the agent and we'll use Migdal to eliminate the sale of insurance through direct marketing by the big companies.' Regrettably, that didn’t happen. I picked up the gauntlet and showed the way, but it didn’t happen. Business did not grow at Migdal."
In a warning to agents, Eliahu said, "I believe that if the big companies and the banks become stronger, there will be no insurance agents in ten years - and I am not a prophet of doom, but an optimist. Today's insurance agents, in every sector, are going through a crisis. Individuals pay almost NIS 20,000 a year, and this is the agents' daily bread. Give me business and insurance, and I'll give security."
Published by Globes [online], Israel business news - www.globes-online.com - on November 5, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013