Kan approves Israel Post, Mizrah Insurance venture
Antitrust Authority director general Ronit Kan has allowed Israel Post Company Ltd. and Mizrah Insurance Services Ltd. to collaborate on non-life insurance for a limited period and subject to restrictions. The two companies can set up a joint venture that will sell insurance policies at post offices.
Insurance agents opposed the proposed joint venture, but Kan decided that it would improve competition in the market. The Antitrust Authority imposed restrictions on the joint venture due to concerns that Israel Post might discriminate against customers who come to the post office to change vehicle ownership but who refuse to buy insurance. The Postal Bank has the exclusive authority to handle the transfer of vehicle ownership. Israel Post may not condition handling the transfer of vehicle ownership on the purchase of insurance or obtaining insurance services.
In addition, Kan limited the joint venture to three years, after which the Antitrust Authority will review it.
Under the agreement between Israel Post and Mizrah Insurance, some post offices will have an automated station or a station manned by an insurance agent who will offer consumers vehicle insurance policies from various insurance companies. The insurance companies will quote prices directly, without the intervention of the agent, enabling consumers to compare prices themselves. In this way, Israel Post will become a new and important distribution channel for non-life insurance.
Recent reports state the Israel Post is liable to lose NIS 60 million (USD 15 million) in 2008 because of the delay in obtaining a permit to provide additional services, especially financial services. Kan’s approval is not enough; Minister of Communications Ariel Atias also has to approve the agreement.
