Sources inform “Globes that the Standard Assurances insurance agency, owned by Harel Insurance (TASE:HARL1;HARL5), will have a 40% stake in a new insurance agency. The new agency is being founded in cooperation with ICC-Cal, which will own 20% of it. The new agency will soon begin marketing, offering mostly Harel insurance policies. The Mandes group will own the other 40% of the new agency.
The still unnamed new agency will be under the indirect control of Harel, and one of its goals is to increase the Harel’s insurance market share. Harel also owns 25% of Mandes and 5% of ICC-Cal.
ICC-Cal will own only 20% of the new agency, because it is considered a banking corporation, and is therefore restricted. The law limits banking corporations to a 20% holding in non-financial investments.
The new agency will market Harel insurance policies in various insurance branches, at substantially lower premiums. The policies will be marketed by direct mail to 1.1 million ICC-Cal credit card holders, without agents, who usually charge commissions of 20% or more. ICC-Cal cannot market the policies directly, because it is not an insurance agency. Under the Supervision of Insurance Law (1981), only insurance agents are authorized to market insurance.
Published by Globes [online] - www.globes.co.il - on May 28, 2003