Premiums 2025
₪5.05B
+1.4% YoY
Comprehensive income
₪431M
+66% YoY
Solvency Ratio
136%
Surplus NIS 675M
CSM Life + Health
₪1,059M
+4.4% future profits
1 Company Profile
Ayalon Insurance (AYLN) is a mid-cap Israeli insurance company, traded on the Tel Aviv Stock Exchange. The company operates in life, health, P&C (auto, homeowners) and pension insurance. Ayalon is an Israeli insurer with strong 2025 performance — a 33% ROE and a 66% increase in comprehensive income. The company manages assets of NIS 20.1B. Market capitalisation: NIS 4.36B. Key observation: a CSM (Contractual Service Margin) of NIS 1,059M represents accumulated future profits — a key metric for IFRS 17 insurance reporting.
| Activity | Feature |
|---|
| Life Insurance | Revenue + pension |
| Health Insurance | Individual and group policies |
| P&C Insurance | Auto, home, business |
| Asset Management | NIS 20.1B under management |
Source: 2025 Annual Report
2 Key Financial Observations
This summary is not a recommendation. It is a factual list of key financial metrics.
2025 Key Metrics
| Metric | Value |
|---|
| Premiums | ₪5.05B |
| Comprehensive income | ₪431M |
| Shareholders’ Equity | ₪1,519M |
| Total Assets | ₪20.1B |
| Dividend | ₪125M |
Additional Metrics
| Metric | Value |
|---|
| Solvency Ratio | 136% |
| ROE | 33% |
| CSM | ₪1,059M |
| Combined Ratio | Requires full report |
Missing data: Precise Combined Ratio, profit breakdown by segment, combined ratio in P&C.
3 Industry & Competitive Context
Israeli insurance market. Regulated (Capital Markets Authority). Competitive across all lines. IFRS 17 changes data presentation.
| Competitor | Ticker | Differentiation |
|---|
| Harel | HARL | Market leader in life and health insurance |
| Migdal | MGDL | Insurance giant |
| Clal | CLIS | Competitor in general insurance |
| Phoenix | PHOE | One of the top 5 |
4 Risk Factors
| Risk | Context |
|---|
| Regulation | Capital Markets Authority — new policies, caps |
| Capital Markets | Investment portfolio — exposure to volatility |
| Insurance Risks | Catastrophes, accidents, large claims |
| IFRS 17 | Complexity of CSM presentation — difficulty in comparison |
5 Analytical Lens — The Questions We Ask
In professional company analysis, the question is not "is this good?" but rather "through which lenses must this company be examined so that we do not miss what matters most?" At Bakshi Finance, every analysis passes through six lenses.
This framework is intended to structure analysis, not to produce an investment conclusion.
Growth
Premiums grew 1.4% — how does that break down across lines?
Profitability
ROE of 33% — is that stable? Which line is the primary contributor?
Leverage
Solvency Ratio 136% — sufficient surplus?
Competitive Position
Ayalon versus the Big Five — how is market share preserved?
Management Quality
Material improvement in 2025 — is it sustainable?
Business Complexity
IFRS 17 + CSM — how should an investor value the company?
6 Scenario Framework
Scenarios are descriptive, not predictive. They outline possible conditions, not expected outcomes.
These scenarios carry no probability assessment, no preferred direction, and no expectation regarding which, if any, will materialise.
Constructive Scenario — if the following conditions hold:
ROE is maintained above 25%, CSM growth continues, dividends rise.
Base Scenario — if current trends continue:
ROE 18-22%, premiums grow 2-4%, Solvency Ratio stable.
Adverse Scenario — if the following risks materialise:
A major insurance catastrophe, capital-markets decline, or competitive pricing pressure.
Scenarios describe conditions, not forecasts. There is no preferred direction and no probability assessment expressed in this framework.
7 How to Think About This Company
Ayalon is a mid-cap Israeli insurer that had an exceptional 2025. The idea behind analysing Ayalon is not "is it profitable" (ROE 33% — excellent), but rather "is the 33% ROE a 2025 anomaly or a new baseline?" Such an ROE is roughly double the industry average and the source warrants understanding.
The critical variables: (a) decomposing profit by line — life, health, P&C; (b) CSM growth — the leading indicator of future earnings; (c) Combined Ratio in P&C — below 100% the company is structurally profitable.
Where the analysis may go wrong: First error — assuming ROE of 33% will persist (may be one-off). Second error — treating CSM as just another number without recognising it represents future profits. Third error — valuing insurance like a regular business without understanding IFRS 17.
Professional analysis addresses three things: (a) ROE decomposition by line; (b) CSM growth versus run-off; (c) Solvency Ratio over time.
The difference between surface-level analysis and professional thinking often lies in the variables that are not immediately visible.
The difference between surface-level analysis and professional thinking often lies in the variables that are not immediately visible.
8 Sources & Data
| # | Source | Date | Type |
|---|
| 1 | Ayalon — Annual Report 2025 | March 2026 | Official — TASE |
| 2 | maya.tase.co.il | April 2026 | Official — Stock Exchange |
| 3 | Capital Markets Authority | Continuous | Regulator |
Missing: Precise Combined Ratio, profit breakdown by segment, combined ratio in P&C.
