insurance sector wary of Israeli banks
By Shlomi Sheffer
July 30, 2002
Certain international insurance companies are categorically unwilling
to insure directors at Israeli banks this year.
While other companies continue to insure, they have increased their
premiums by hundreds of percents. A similar increase is expected
in the premiums of policies covering the banks themselves as policies
are renewed for 2003, according to attorney Tal Nahari Amrami from
the Toren Insurance Agencies, which specializes in banking insurance.
Although most insurers will not admit it, the economic and security
situation is a major factor in their reluctance to insure local
Insurance agents face real difficulties in acquiring directors'
and officers' insurance for Israeli banks for next year, Amrami
said. Insurance firms that are insuring Israeli banks have limited
the coverage they are willing to undertake and have raised the deductibles.
Elementary insurance rates have gone up in the last year, along
with officers' and directors' insurance. While premiums in the banking
sector went up 100 percent last year worldwide, things were even
worse for Israeli banks.
The collapse of Trade Bank, recently discovered embezzlement at
several banks and the jump in global insurance rates will push up
premiums banks are likely to pay when they renew their policies,
and some may even not find any insurer. All banks, small and large,
are expected to encounter similar difficulties, Amrami said.