Libra Follow-Up: Was 2025 An Unusually Favorable Motor Year Or A New Underwriting Base
The main article already showed that almost all of Libra's current earnings power still sits in motor. This follow-up argues that 2025 combined genuine underwriting improvement with more favorable claims conditions, so the conservative earnings base probably sits closer to the fourth quarter than to the full-year average.
Why This Follow-up Exists
The main article already argued that Libra's 2025 profit is much more real than in earlier years, but also that it still sits almost entirely on motor. This follow-up isolates the question that will really define 2026: was 2025 simply an unusually favorable underwriting year in motor, or has a new earnings base already started to form?
The short answer is that it was both. There was genuine underwriting improvement here, but a meaningful part of the year also leaned on more favorable claims conditions, especially in theft, and on growth that ran faster in customer additions than in premium per customer. That means anyone reading 2025 as a clean new run rate is likely going too far. Anyone reading it as pure luck is missing the point.
Four findings matter most upfront:
- Motor property alone generated NIS 102.8 million of pre-tax profit, about 84% of total pre-tax profit in general insurance. Together with compulsory motor, the motor lines generated NIS 123.5 million, more than total general-insurance profit, because the "other" segment still lost money.
- The motor-property combined ratio fell in 2025 to 78% gross and 75% net, but in the fourth quarter it had already moved back up to 83% and 79%.
- Part of the 2025 improvement was explicitly tied to lower claims cost, especially lower theft cost versus the prior year. That is important because it may not repeat with the same force.
- In general insurance as a whole, gross premiums rose 16% while new joins rose 24%, and the gap was explained by erosion in average premium in motor property.
What Truly Improved, And What Was Simply More Favorable
Motor property showed real improvement in numbers that are hard to dismiss as noise. Underwriting profit rose to NIS 100.8 million from NIS 65.1 million, and pre-tax profit rose to NIS 102.8 million from NIS 63.9 million. This was not just a year when the investment book helped. The underwriting engine itself worked.
But the more important question is what drove the jump. On one side, there was greater scale. Insurance service revenue in the line rose to about NIS 567 million from about NIS 480 million. On the other side, the company itself explains that the improvement also came from lower claims cost, especially lower theft cost versus the prior year, alongside operating efficiency and higher activity volume. In other words, 2025 was not only a year of better execution. It was also a year in which conditions were more favorable.
That distinction matters. If all of the improvement had come only from efficiency, it would be much easier to call this a new base. If all of it had come only from unusually low theft, it would be much easier to dismiss the year as temporary. In practice, both forces were at work. That is the core of this follow-up.
The Fourth Quarter Already Looked Like The First Normalization Test
The fourth quarter matters more here than the full-year average. It already gave a first look at a less comfortable environment, yet it still did not break profitability. In motor property, fourth-quarter pre-tax profit was NIS 23.9 million versus NIS 11.9 million a year earlier, and underwriting profit rose to NIS 21.7 million from NIS 11.7 million. At the same time, the gross combined ratio moved up to 83% versus 78% for the full year, and the net combined ratio moved up to 79% versus 75%.
The reason matters as much as the number. In the fourth quarter, theft cost had already increased versus the first three quarters of the year, and one-off weather losses lifted claims cost. So Q4 no longer looked like the most comfortable part of the year. Even so, motor property remained very strong.
| Motor-property metric | 2024 | 2025 | Q4 2024 | Q4 2025 |
|---|---|---|---|---|
| Underwriting profit | 65.1 | 100.8 | 11.7 | 21.7 |
| Pre-tax profit | 63.9 | 102.8 | 11.9 | 23.9 |
| Gross combined ratio | 84% | 78% | 91% | 83% |
| Net combined ratio | 80% | 75% | 88% | 79% |
The more conservative reading is that Q4 reflects a more reasonable earnings base than the full year. Not because it was weak, but because it stayed profitable even after theft pressure and weather losses had already started to show up. So anyone trying to understand what can survive partial normalization should look first at an 83% gross and 79% net zone, and only after that at the full-year trough of 78% and 75%.
The Gap Between Customer Growth And Premium Growth Is A Quality Warning
The 24% growth in new joins against only 16% growth in gross premiums is not a side detail. It says something important about the quality of 2025 growth. If the new-customer count grows faster than premium, and the company itself explains that the gap came from erosion in average premium in motor property, then part of the growth clearly came from volume rather than pricing power.
This is a yellow flag, not a red one. There is no evidence here of a breakdown in underwriting discipline, because profitability itself improved sharply. But there is a clear warning about how to read the year: the strong 2025 profit did not rest on stronger pricing to customers. It rested mainly on a combination of more volume and more favorable claims conditions.
That is exactly why the question of a new underwriting base is still open. If claims cost normalizes upward faster than expected, and some of the average-premium erosion remains, margin can compress faster than the 2025 annual number implies. Customer growth alone will not be enough. Libra still has to show that its personal underwriting model can protect pricing quality, not only customer acquisition quality.
What Has To Happen Now To Call This A New Base
To call 2025 a new base rather than a favorable year, four things need to happen over the next 2 to 4 quarters:
- Motor property needs to remain profitable in a less comfortable claims environment, without drifting back toward the combined-ratio levels seen at the start of 2024.
- The gap between customer-acquisition growth and premium growth needs to narrow, or at least stop widening through further erosion in average premium.
- Theft, spare-parts, and weather-related pressure need to stay at a level that squeezes margin but does not erase it.
- Compulsory motor can keep contributing, but it cannot answer the core question about the durability of motor-property underwriting. Libra's earnings base still has to be judged first through motor property.
Conclusion
2025 was not just a lucky motor year for Libra. There was also better underwriting, greater scale, and genuine earnings power here. But it was not a year that can simply be projected forward in a straight line without taking a more cautious view.
Bottom line: Libra probably already has a better underwriting base than before, but that base is more conservative than the full-year peak. As long as average premium in motor property is eroding, and part of the improvement is explained by more favorable claims conditions, the right read of 2025 is a real step up that also benefited from favorable conditions, not a fully proven new plateau.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.