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Israel Direct Insurance (IDI) has decided to deviate from its previous policies by entering the collective insurance market, targeting state employees, large government companies, banks, Bezeq and the Israel Electric Company.

These and other bodies, which comprise 20 percent of the domestic car insurance market, currently work with the traditional insurance companies. Their employees generally pay a flat rate determined by their collective agreements. As a result, good drivers who never file claims end up subsidizing reckless drivers who do.

IDI wants to exploit this discrepancy to market attractively priced policies to good drivers. "In every collective body there are two groups: one that pays too high a premium, and the other, which pays too little," observed Direct Insurance CEO Eyal Lapidot. "We will appeal to those who pay too much and we'll offer them deals."

Should IDI prove successful, this would force the traditional companies to revamp their pricing structures to woo back better drivers.

Lapidot estimated that the car insurance market has some 1.5 million clients, including 300,000 in collective frameworks. IDI currently has some 160,000 insured clients, meaning that the collective market offers IDI the opportunity to grow significantly. Nationwide, car insurance clients pay an estimated NIS 5 billion a year in premiums, including NIS 750 million through collective frameworks.

Lapidot claimed that the market share of collective insurance policies deviates from norms elsewhere in the world and said that IDI's current venture is just the first of many aimed at increasing the company's share.