How much will Ayalon earn from the Clalit long-term care policy? "We cannot comment"

Shortly after the official announcement today (Sunday) by the Clalit Health Services regarding the victory of Ayalon Insurance in the tender for operating the group long-term care policy — the largest policy in the world, covering about 2.7 million insured persons — the company's CEO Sharon Reich and his deputy, head of the health division Uzit Weinstein, addressed the move, which marks a step up for the company.

I assume the result did not surprise you, because you knew you were the only ones who submitted a bid for the tender?

Reich: "We received the notification today in a formal manner, in a tender that was managed professionally by Clalit Health Services. We went through stages, and today we received notification that we won. We did not know that we were the only ones who applied, except for a headline in the newspaper. We are very happy about the win. From our perspective, this is a milestone for Ayalon Insurance Company, and a statement that we are also players in the health sector."

Weinstein: "There have been tenders in the past that had a single bidder and it did not mature into a deal."

There is understandable apprehension in the industry regarding the world of long-term care, which has suffered many storms. Are you not afraid of the backlash against companies regarding the management and investigation of claims?

Reich: "As a growing company, we see the health sector as an important field for the insured and one with potential for expansion, and we see this tender as an opportunity that happens once every few years — a strategic opportunity to strengthen ties with a leading health fund in the State of Israel and with a huge customer base. We weighed all the implications, and the decision we made is that it is right for Ayalon to go for the tender, and that is what we did.

We think that Ayalon differentiates itself in the market as a company that provides service and a player that has integrity. It is true that in the field of claims in general there are also gray areas and there are discussions about it, but we definitely think we will know how to handle claims in a fair and professional manner. From Ayalon's perspective, there is truly a strategic opportunity here to be in 2.7 million households, and for us, this is a very important move in the company's development."

Your income is from management fees only, and you will not be affected by the ratio between premiums and claim payments. How much will Ayalon earn from the Clalit long-term care policy?

Reich: "We cannot comment on the subject. There are confidentiality conditions in the tender that we are signed on."

How do you actually perform the delicate balance in managing long-term care claims, where in any case you meet people in very sensitive situations?

Weinstein: "You have to balance between two things here, because people really come to you who have not had an insurance event formally, and yet many times these are people who are having a hard time. Anyone who deals with long-term care, certainly in the funds of the health services, needs to balance between the need to maintain the fund — because in the end, the fund needs to last for many years — and providing very good service. You need expertise to be on this fine balance, and it is a tough field at certain moments."

In the past, if the fund was in a trend of depletion, it would affect your income, but from 2024 this is no longer the case, you will receive the management fees in any case.

Weinstein: "We have a responsibility towards the fund, it's not that it's the money of Clalit members and we don't care about it. Otherwise, let's approve all claims, everyone will be happy, and what do I care what will happen in 10 years? This is not right and it is not responsible. You cannot just pay claims, just as you cannot just reject claims, and you need to do everything with balance, service, and sensitivity."

In recent years, we have seen a continuous deterioration in the rights of the insured. What gives you confidence that the field will be stable in the coming years and will not enter a storm again?

Weinstein: "There has been regulatory action in recent years that reduced rights, but it was actually a kind of artificial respiration for the entire long-term care crisis in the health funds. We hope it is sufficient."

Reich: "Ultimately, because of the increase in life expectancy and the importance of treating the long-term care issue that is on the regulator's table, there is a common interest here for everyone: the government, the regulator, the health fund, and us as service providers. There is a desire to provide an answer to this need, and the answer must be responsible and with the right balances.

There was a professional committee sitting here headed by Uzit with all the relevant people in the company, and we saw here an opportunity for Ayalon to grow in a field it believes in — the health field. We are happy about the win and will do everything so that the insured feel they are receiving good service, and together with the health fund, we will provide the required answer."