IDI Insurance Co. Ltd. (Direct Insurance) (IDIN)

Comprehensive Income 2025

381M ILS

416M normalised ex-legal provisions

Annual ROE 2025

32%

Among the highest in Israeli insurance

Casco Market Share

14.7%

#2 in Israel | Home 12.2% (#3)

Solvency II

133%

SCR 1,464M | Surplus 488M | Aa3

Payout Ratio 2025

71%

Total 2025 dividend: 250M ILS

Gross Premiums 2025

3,845M ILS

+3.7% Y/Y | +5.0% ex-tender

1 Company Profile

IDI Insurance Co. Ltd. — known to the Israeli public under the brand "Bituach Yashir / Direct Insurance" — is the pioneer and leader of the direct-distribution insurance model in Israel: marketing of insurance via internet and telephone, without an agency network, since 1996. The company trades on the Tel Aviv Stock Exchange (symbol: IDIN, security 1129501, ISIN: IL0011295016) and is a constituent of the TA-125 index, but at the lowest weight among the major insurers (~0.16% of the index) — it is the smallest among the TA-125 insurers in terms of market capitalisation and equity. The listed company is controlled by its private parent IDI Holdings, which is non-public, controlled by the Bronfeld family. The revenue model is built on direct marketing of non-life and risk-life policies, with an emphasis on motor and home/property insurance. The bulk of activity is in motor insurance (Casco + MBI) — 71.9% of premiums — a company with a clear non-life focus. As of year-end 2025: gross premiums of 3,845M ILS, comprehensive income of 381M ILS (416M ex-legal provisions), ROE of 32%, equity of 1,268M ILS.

Segment	2025 Premiums (ILS M)	Share of Premiums	Market Share
Casco — Motor Property	1,947	53.3%	14.7% (#2)
MBI — Motor Compulsory	680	18.6%	—
Home, Business & Liability	397	10.9%	12.2% (#3)
Life (Risk)	373	10.2%	~8%
Health	311	8.5%	—
Total (excl. State employees tender)	3,752	100%	—

Source: 2025 Annual Report (P1731061-00), 2025 English Investor Presentation Highlights (P1735138-00), maya.tase.co.il (security 1129501).

2 Key Financial Observations

This summary is not a recommendation. It is a factual list of key financial metrics reported by the company.

Profitability 2024 → 2025

Metric	FY2024	FY2025
Reported comprehensive income (ILS M)	306	381
Normalised (ex-legal provisions)	328	416
Annual ROE	29%	32%
Q4 ROE	35%	34%
Nostro investment income (ILS M)	222	258
Annual nostro yield	6.0%	6.3%

CSM — Contractual Service Margin

Date	CSM (ILS M)	RA (ILS M)
1.1.2024	877	216
31.12.2024	919	232
31.12.2025	987	234

Breakdown 31.12.2025: General insurance CSM 655, Life+Health CSM 332. CSM = future profit recognised at contract inception but not yet released to the income statement; it is amortised over the contract life. A growing CSM over years = a strengthening "future profit bank".

2025 Pre-tax Comprehensive Income by Segment

Segment	Pre-tax Comp. Income (ILS M)
Casco	274
MBI	-25
Home, Business & Liability	34
Life (Risk)	135
Health	104

Casco+MBI = 48% of pre-tax profit. Life+Health+Home = 52%. Although premiums concentrate in motor (~72%), profitability is more diversified.

Balance Sheet & Capital

Metric	31.12.2024	31.12.2025
Equity (ILS M)	1,118	1,268
Nostro portfolio (ILS M)	—	~4,500
SCR — required capital	—	1,464
Total recognised capital	—	1,952
Capital surplus	—	488
Casco Combined Ratio	—	89%
Midroog rating	Aa3	Aa3

Missing data: active customer count, separate Loss Ratio and Expense Ratio, total balance sheet and financial debt, insurance reserves, precise shareholder breakdown, current dividend yield — not fully extracted from the Hebrew RTL filing.

Gross Premiums 2016–2025 (ILS M)

ROE — Multi-year Trend (%)

2025 Premium Mix by Segment (%)

2025 Pre-tax Comprehensive Income by Segment (ILS M)

CSM — Contractual Service Margin (ILS M)

Equity 2018–2025 (ILS M)

3 Industry & Competitive Context

The Israeli insurance industry — non-life and life — comprises five large groups (The Phoenix, Harel, Migdal, Clal, Menora) operating under the classical agent/adviser model, and smaller niche players (IDI / Direct Insurance, Ayalon, Shirbit). The regulator is the Capital Markets, Insurance and Savings Authority. IDI is a model outlier — it does not aim to be a comprehensive insurer but rather a focused niche player operating a direct distribution model. Most of the Israeli insurance market still flows through agents — agents earn 10-25% commissions on premiums. The direct model saves this commission, enables more competitive pricing for the customer, and preserves a healthy margin for the company.

Metric	IDI	Harel	The Phoenix	Migdal	Menora	Clal
Distribution model	Direct (digital)	Agents	Agents	Agents	Agents	Agents
Equity (ILS B)	1.27	12.2	~14–16	~10–12	~7–8	~9–10
2025 ROE	32%	27%	~20% (est.)	22%	~16%	~18%
Solvency II	133%	183%	over 200%	medium	medium	medium
2025 Payout Ratio	71%	≥30%	medium	medium	medium	medium
TA-125 weight	~0.16%	over 1%	over 1%	over 0.5%	over 0.5%	over 0.5%

Peer figures are approximations for orders of magnitude; precise verification requires each company's 2025 reports. IDI market shares per company guidance: Casco 14.7% (#2), Home 12.2% (#3), Life-Risk ~8%, Mortgage Insurance 16.5% (niche leader).

Barriers to entry: regulatory capital requirements (Solvency II), insurance licence, and actuarial systems. In IDI's digital niche, the practical barrier is the public recognition of the "Bituach Yashir" brand — built since 1996. A new insurtech entrant must secure not only a licence but also a substantial advertising budget.

4 Risk Factors

Risk	Context	Sensitivity
Motor underwriting cyclicality (Casco)	Accidents, weather, natural events, parts inflation — any move in the Combined Ratio compresses profit	High
MBI regulation (controlled tariffs)	Tariffs set by the Authority can fall below the actuarial risk; in 2025 the segment was loss-making (-25M)	Medium-High
Auto-parts inflation	Imported parts — USD/EUR/supply chains push up claim costs	Medium-High
Catastrophic natural events	Earthquake, storm, flood — concentrated claims; reinsurance mitigates but does not eliminate the exposure	Medium
Insurtech / UBI competition	New entrants with AI pricing technology can challenge the direct model itself	Medium — emerging
Capital-markets volatility	The ~4.5B ILS nostro portfolio generates ~258M ILS in income; a negative market would weigh on ROE	High
Motor concentration	~72% of premiums from Casco+MBI; a domestic motor-industry shock = direct hit to over two-thirds of the business	High
Relatively low Solvency	133% leaves less buffer for a combined adverse-market and high-claims scenario	Medium
Brand dependence on "Bituach Yashir"	A decline in brand recognition or a reputational hit directly affects the customer-acquisition pace	Medium
Change in MBI tariffs	An unexpected regulatory tariff shift could deepen the MBI loss	Medium
Reinsurance pricing	Rising global reinsurance prices following overseas events would raise operating costs	Medium
Interest rates	Affects bond-portfolio yield within the nostro and pricing of long-term life contracts	Medium

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 at a CAGR of 7.2% since 2016, but the path was not linear (decline 2019–2021, jump 2023–2024). 2024→2025 growth was +5% excluding the State-employees tender. How much of growth is organic from new customers, and how much reflects premium inflation following rising loss costs? In non-motor segments — Health (+15%) and Home (+8%) — is there a path to meaningful scale, or are these supporting niches?

Profitability

ROE 32% in 2025 (29% in 2024), Casco Combined Ratio of 89% — among the highest in Israeli insurance. How much of the success reflects the direct model (saving the 10–25% agent commission), and how much is a "good year" in motor (fewer accidents, stable costs)? What Combined Ratio represents a normalised cycle, and was 2025 above trend?

Leverage

A Solvency II of 133% sits well below peers (Harel 183%, The Phoenix over 200%). It is not necessarily weakness — it is the consequence of a 71% Payout Ratio. But: what is the buffer in a combined scenario of a negative capital market plus a large insurance event? The Aa3 rating from Midroog has held; under what conditions could it come under pressure?

Competitive Position

IDI ranks #2 in Casco (14.7%) and #3 in Home (12.2%) — yet is the smallest among TA-125 insurers. Is the direct model a real entry barrier against new insurtechs, or precisely what leaves it exposed to the next technology wave (UBI, AI-pricing)? What is the capacity to add Casco market share beyond ~15%?

Management Quality

Consistent capital discipline (~65% average Payout 2018–2025), Solvency held above 130%, stable Casco Combined Ratio of 89%, CSM up three years in a row. Indicators of management quality. requires verification (RTL extraction) CEO and Chairman names were not auto-extracted from the Hebrew RTL filing — manual reference to maya.tase.co.il is needed to verify board composition. What is the 5-year digital/AI strategy?

Business Complexity / Risk

~72% of premiums come from motor — high concentration. MBI is a regulatory "tax" (controlled tariffs, loss-making segment). The 4.5B ILS nostro portfolio generates 258M in income but creates capital-markets exposure. How should one think about Casco+MBI together (249M in 2025 profit) rather than separately? What are the implications of the private parent-ownership structure (IDI Holdings) for transparency and capital management?

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:

Motor accident frequency falls to a historically low level, parts inflation moderates, weather is benign — Casco Combined Ratio remains in the 87–89% range. The nostro portfolio (~4.5B ILS) records a double-digit return in a positive capital market. Health continues double-digit growth (+15% in 2025). MBI rebalances following a regulatory tariff update. Under these conditions, ROE remains above 30%, CSM continues to grow, and a Payout Ratio of 70%+ is sustained without Solvency pressure.

Base Scenario — if current trends continue:

Motor returns to mean — accidents, natural events, and parts inflation are normalised. Casco Combined Ratio moves around 91–94%. The nostro portfolio earns a 4–6% return. Premium growth runs 3–5% excluding one-offs. ROE settles between 22–28%. Payout Ratio is held in the 60–70% range. CSM grows at a moderate pace.

Adverse Scenario — if the following risks materialise:

A combination of a catastrophic natural event (storm/flood/earthquake), sharp parts inflation (shekel depreciation), and/or a poor capital-markets year. Casco Combined Ratio jumps above 100%, the nostro portfolio records a negative return, MBI losses deepen. In parallel — if insurtech competition succeeds in capturing share. Under these conditions ROE falls below 15%, Solvency may slip below 120% (the dividend-policy threshold), and the company is forced to scale back distributions.

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

IDI is, above all else, a successful industrial experiment. Bituach Yashir launched the direct insurance model in Israel in 1996 and proved that motor and home insurance can be sold to consumers directly — without agents. After almost 30 years, the conclusion is clear: the model works, but it has a glass ceiling. The company reached #2 in Casco (14.7%) and #3 in Home (12.2%), and there it has stayed. The large incumbents (Harel, The Phoenix, Migdal) continue to control most of the market because the physical agent network creates a customer base that is hard to dislodge. This is not a failure of IDI — it is a structural feature of Israeli insurance. The analytical implication: view IDI as a successful niche player, not as a candidate to displace the larger incumbents.

The magic of IDI is its 32% ROE — and it stems from two factors that should be understood separately. First: the direct model saves 10–15 percentage points of distribution costs (the agent commission). This shows up in the 89% Casco Combined Ratio — well below the market. Second: equity is relatively small (1,268M ILS) — and when equity is small and earnings solid, ROE leaps. Larger peers have equity in the tens of billions, so even profits of 1–3B ILS do not produce a 32% ROE. This logic matters: IDI's high ROE reflects not only efficiency but also the small capital base. A similar perspective applies to Solvency 133% (vs. 180%+ at peers) — this is not weakness, it is the result of management's choice to distribute rather than retain.

The 71% Payout Ratio places IDI firmly in the "capital-return" rather than "growth" category. The company defines its dividend policy as "at least 50%", but in practice has distributed ~65% on average over 8 years (1.1B ILS in dividends out of 1.7B in cumulative profits). The analytical question: why not retain profit for growth? The likely answer: the model has reached its natural ceiling — additional capital is not required to defend the existing market share, and the cost of organic growth in a direct model is high (aggressive advertising). The managerial logic, therefore, is to return profit to shareholders. In parallel, MBI (motor compulsory) is a "tax" on participating in motor — tariffs are controlled by the Authority, the company has no pricing discretion, so one should think of Casco+MBI together (274 - 25 = 249M ILS in 2025 pre-tax comprehensive income) rather than separately.

Where the analysis may go wrong. The first error is to read the 32% ROE as a base level. Motor cyclicality is the largest risk — motor is exposed to accident frequency, repair costs (imported parts), and concentrated natural events. In "good" years Casco Combined Ratio falls below 90%; in a "bad" year it can jump above 100%. 2025 was a good year for Casco (CR 89%). 2026–2027 may differ. The second error is to assume IDI "must grow" to be valued — this is not a growth model, it is a capital-return model, and it should be evaluated by the criteria of a steady cash generator that distributes its earnings. The third error is to overlook the CSM build (877→919→987) — this is a structural quality indicator that sits above the quarterly profit numbers: future profit recognised over the contract life, with three consecutive years of growth meaning new business is being written faster than existing CSM is released.

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	2025 Investor Presentation Highlights, English (P1735138-00)	March 2026	Official — IR
2	2025 Annual Report (P1731061-00)	March 2026	Official — TASE
3	2023 Annual Report (P1581531-00)	March 2024	Official — TASE
4	maya.tase.co.il — security 1129501	April 2026	Official — Stock Exchange
5	Capital Markets, Insurance and Savings Authority	Annual	Official — Regulator
6	Midroog rating (Aa3 issuer / A2 Tier 2)	2025	Official — Agency

Missing: active customer count, separate Loss Ratio and Expense Ratio, total balance sheet and financial debt, insurance reserves, requires verification (RTL extraction) CEO and Chairman names, employee count, precise shareholder breakdown, current dividend yield, dividend per share.

IDI Insurance Co. Ltd. (Direct Insurance)

Profitability 2024 → 2025

CSM — Contractual Service Margin

2025 Pre-tax Comprehensive Income by Segment

Balance Sheet & Capital

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