Sagi Yogev, CEO of Migdal (Gal Hermoni Photo)
Not so long ago, if we were to ask any self-respecting economic journalist: what is his assessment of Migdal’s future, it would not have been unreasonable to assess that Migdal is confidently losing its central place in the insurance market. The company has not stopped confronting the Commissioner of the Capital Market and Insurance, has failed to stabilize management let alone stabilize an advanced and worthy work plan for a company of its size.
The competitors did not wait for the company to stabilize and aggressively entered the space created in this market and tower? It was based on battles between the dominant shareholder Shlomo Eliyahu and the regulator Moshe Barkat.
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But things took a turn. Sagi Yogev has been appointed CEO of the company and Vice President of the Supreme Court, Hanan Meltzer has been appointed Chairman of the Board. Shlomo Eliyahu was forced to take a step back, which satisfied the insurance commissioner and Migdal set out on a new path.
Naturally, Sagi Yogev, CEO of Migdal, in a conversation with ice, refuses to talk about the worlds of relations with the regulation and the worlds of shareholders, but speaks candidly about Migdal’s development and its future.
– A few months ago you lost your place “as the biggest money manager in Israel”
“Migdal manages assets with a total financial volume of NIS 377 billion, and at the end of the first quarter we are the largest money manager. It is true that in the end-of-year reports there was one company that passed us by, but that was due to a completely technical issue.”
“A large part of the market works with a measurement method that includes calculating the assets under management the nostro account. We did not do that. The quarter we put the nostro into the account and once we did that, then obviously we were first. Our downgrade was purely technical.
“Now pay attention to the accumulations with us, we pay benefits on us by 11% compared to the corresponding quarter and in the provident we saw a 25% increase. In the pension channels we have huge volumes. We are a company that used to grow at an average annual rate of less than 3%. “20%. We focus on growth in these areas, our growth does not only come from the sale of insurance.”
– You had a sharp drop in profits from elementary underwriting. what happened here?
“True, we have an erosion in the underwriting profitability that stems exclusively from the general insurance. And if Nell is a little more detailed then and it comes from the automotive world going through a difficult period since the Corona period.
“The corona caused a decrease in the public insurance premium. This decrease came from a place of ‘no travel’ and therefore no accidents and then the premium that customers pay goes down. At this point, the premiums were set at a low price. Now, we left the corona with a low premium.
“I want you to pay attention to another significant thing. The global supply chain has gone wrong, there is a sharp rise in sea freight prices and they are causing a lot of trouble in the car spare parts world. Then when there is a vacuum in spare parts Vehicles and it is a phenomenon in the whole insurance world.
“You can see this process in the whole insurance industry, everyone has lost money and a lot of money. So to your question yes, in the pure underwriting profit we see heavy losses because of the premium that did not match the risk that has changed since leaving Corona.”
– You also had a problem with health insurance
“In health insurance it is a minor decline and it is not something we attach much importance to. There was nothing here that we can specifically put our finger on. I can tell you that the phenomenon of getting out of the corona – and it should be understood that corona has significantly affected the insurance world – Get tested and there are post-corona symptoms and see it.
“Look at another interesting thing, since we left the corona we are also seeing a significant increase in water damage claims. In closures no one is leaking in the house, no one has hired plumbers and now we are seeing a spike in plumbing damage repair claims in the house. I want to emphasize that there is nothing significant here because we “We see an insignificant decrease in profits from health insurance. It’s not as dramatic as you paint.”
– Let’s talk for a moment about the future of the insurance world.
“Insurance from its basic form will continue to exist for many more years. The reliance on keeping the risk away from you, will continue to exist. At the beginning of a day and also at the end, people are risk haters and they want to keep it away from them.
“What we will see in the future are different models for operating the insurance. If the car market is beyond autonomous vehicles as well as shared transportation then it will have implications for the insurance market. Not sure in another 10 years people will buy cars like they buy today. So if people buy less insurance cars Will adapt itself to this model.
“I want to show you something: if there are autonomous vehicles then a new risk is born – of cyber – that there will be an argument that is a new risk that can happen to the vehicle and then we will see new things with new technology that will allow the insurance world to better refine the risk.” .
“Today I know the driver is 40 and driving a particular vehicle. In the future it will become with much more parameters on the basis of which more accurate offers can be made. About you I know you are a journalist who has much more risk than a doctor. Second time we can reach customer preferences Ourselves accordingly. ”
– Will the regulation allow this to make rapid adjustments to the changing reality?
“The regulation adapts to reality much faster than you think. We now see that the Ministry of Finance wants to introduce a travel parameter in the insurance world. So if you work from home, why buy the same policy? The model.
“I want you to pay attention to one more thing, the institutional bodies will not only stay in the insurance fields but will enter other worlds. Does anyone really think that Clal Insurance could not have entered the consumer credit world without buying MAX? So by and large I guess we will continue to rely on insurance and do what “We are doing our best. But there will be opportunities here to develop in new and new directions for us.”
– How do you see the Clal and MAX deal?
“The MAX deal is a great example of entering the new world. There is a synergy here that can be good for everyone because at the end of the day you look at the customer holistically and it is an interesting deal whether it is approved or not.”
– You are the largest money manager in Israel, where are you in alternative investments?
“The impact of the capital market on an institutional body is enormous. We want to reduce the volatility of the capital market on our profits. A large part of our investments are conducted under a ‘how to reduce this volatility’ policy. We started two years ago to implement alternative investment policies that we allocate a lot to. Managerial and organizational resources and a lot of money.
“In alternative investments, we also take into account the aspects of ESG and this contributes a lot to us. Both in our position vis-à-vis the clients and in international entities we work with. We have quite a few investments of this kind.”