How the insurance market works: the players on the field
The insurance market includes consumers, insurance companies, agents, and regulators — and each has a role, an interest, and an effect on the coverage and price you receive. On this page, we will meet the main players, understand how they operate, and see which tools can help you compare options, ask the right questions, and make better-informed insurance decisions.
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To understand how to choose insuranceA contract under which an insurance company undertakes to compensate the insured in the event of damage in exchange for a periodic payment. wisely, it is important to know who is operating behind the scenes and what each party's interests are.
The insurance market is not made up only of policyholders and companies. Agents, advisers, and government bodies also operate between the parties and set the rules of the game. Understanding the structure of the market will help you manage your insurance more consciously and recognize when your interests may conflict with those of the other party.
- Consumers (us): Why can it sometimes be better to be part of a "group"?
- Insurance companies: How their business model works and what happens when you file a claim.
- Insurance agents: Who pays them and what you should ask them.
- The regulatorGovernment bodies (such as the Israel Securities Authority or the Capital Market Authority) whose role is to supervise financial institutions and protect investors’ rights.: Who protects us and which comparison tools are available.
Insurance consumers — all of us
Insurance consumers include each of us: individuals, families, as well as companies and organizations that purchase insurance for their employees.
The power of a group: Insurance provided through an employer is sometimes significantly cheaper than private insurance. The reason is simple: when the group is large, its bargaining power increases and the risk is spread out.
Insurance companies
Around twenty insurance companies operate in the Israeli insurance market, but in practice a small number of very large companies insure most of the public. These are businesses whose goal is to make a profit.
Insurance agents
Insurance agents act as intermediaries between policyholders and insurance companies. They help select policies, compare products, and sometimes also assist with claims.
In most cases, you do not pay the agent directly. The agent is compensated by the insurance company through a commission on the sale.
- The higher the premium you pay, the more the agent's commission may increase.
- This does not mean the agent is against you. There are professional and trustworthy agents who provide a vital service. The goal is simply to be aware of the incentive structure and ask questions before making a decision.
The regulator — the insurance supervisor
The body responsible for enforcing the rules of the game is Rashut Shuk HaHon, Bituach VeChisachon (רשות שוק ההון, ביטוח וחיסכון; Capital Market, Insurance and Savings Authority). Its role is to protect consumers when they deal with powerful market participants.
Its responsibilities include:
- Determining which policies insurance companies may sell
- Supervising the conduct of insurance companies and insurance agents
- Setting rules for commissions and pricing
- Publishing consumer-protection guidelines
- Leading reforms intended to improve policyholders' position
For example, in recent years, steps have been taken to reduce duplicate health insurance coverageThe list of events and damages for which the insured is entitled to compensation. and improve transparency for consumers.
The regulator has created simple digital tools that can help you make decisions independently:
Tools designed to help you
- Har HaBituach (הר הביטוח): A website where you can see all policies registered in your name in one place. It is highly recommended to check it once a year.
- Comparison calculators: Tools for comparing car, home, and health insurance prices among different companies.
Frequently asked questions
Is it better to work with an insurance agent or buy insurance directly from the company?
It depends. Buying directly may sometimes be cheaper, but a good agent can fight on your behalf when you file a claim.
What happens if the insurance company refuses to pay a claim?
You can contact the company's public complaints department, the Capital Market Authority, or seek legal advice. Understanding the policy terms in advance prevents most of these disputes.
How do I know whether I have duplicate insurance?
Log in to Har HaBituach. If two policies appear for the same type of coverage — for example, two personal accident policies — you may be paying twice unnecessarily.
In summary
The insurance market is a field of competing interests, but once you understand how it works, it becomes easier to navigate. Remember: you are the customer, and the power to choose and compare is in your hands.