Evan Tindell

Evan Tindell inquired if some Israeli theft insurance providers are not requiring Teslas to have Ituran's system and expressed concern about manufacturers potentially developing internal telematics/anti-theft systems that could disintermediate Ituran in the long term. He also requested an update on Ituran's efforts in India.

Answer

Eyal Sheratzky (CEO) clarified that Israeli regulation prevents insurance companies from mandating a specific brand; instead, they require certain solution types, with Ituran being the preferred choice for subscribers, leading to an 85-90% market share. Regarding disintermediation, Eyal Sheratzky (CEO) emphasized Ituran's service-oriented model, where hardware is a tool for recurring revenue. He noted that in hostile environments, car recovery involves human intelligence and control centers beyond technology, and manufacturers often lack localized solutions. While the percentage of customers using their own hardware might grow, it's not seen as a threat to Ituran's core service business. For India, Eyal Sheratzky (CEO) mentioned a joint venture and a contract with Mercedes-Benz for commercial cars, but noted low margins and a premature market, viewing it as a long-term opportunity.

Evan Tindell asked about reports that some Israeli theft insurance providers do not require Ituran's system for Teslas and expressed concern about potential disintermediation by car manufacturers developing advanced internal telematics and anti-theft systems over the long term.

Answer

CEO Eyal Sheratzky clarified that Israeli regulations prevent insurance companies from mandating specific brands, only system requirements, and highlighted Ituran's 85-90% market share in Israel due to strong partnerships with car dealers and importers. Regarding disintermediation, Mr. Sheratzky emphasized Ituran's service-oriented model, focus on recurring revenues, and the critical role of human-led recovery in hostile environments. He noted that while some customers might use their own hardware, Ituran's technology remains state-of-the-art, especially in emerging markets, and direct integration with manufacturers in regions like Brazil and Mexico mitigates this concern.

Evan Tindell of Bireme Capital questioned if the specialty insurance segment's consistent performance warrants a change to its long-term 90-95% combined ratio guidance, inquired about the company's strategy and investments in AI, and asked about the path to improving the title insurance combined ratio in the current interest rate environment.

Answer

President & CEO Craig Smiddy reaffirmed the 90-95% combined ratio target for specialty insurance, attributing the consistent performance to their casualty-focused, non-cat-property business mix and conservative reserving. Regarding AI, Smiddy described a foundational strategy of modernizing IT and data analytics, led by a newly hired AI leader, to drive efficiency and better decision-making. On Title Insurance, both Smiddy and Title CEO Carolyn Monroe stated their goal is to lower the combined ratio below 95% through internal efficiency improvements, regardless of the interest rate environment.