JERUSALEM (Bloomberg) - Migdal Insurance Holdings, Israel's biggest life insurer, said parent Assicurazioni Generali SpA will buy a portion of its reinsurance contracts.

Migdal's shares posted the biggest gain in four years.

The agreement will help Migdal's reinsurance business by making it easier to enlist other reinsurers, the Petah Tikva, Israel-based company said in a statement.

"Not only is Generali one of the biggest insurers in the world but, at a time when the reinsurance market is rapidly shrinking, its participation will act as a leverage for enlisting other partners," Migdal said.

The portion of reinsurance contracts taken by Generali, which is Italy's largest insurer and owns about 70 percent of Migdal, will vary according to the type of insurance and range from 2.5 percent to 100 percent, the Israeli company said.

Migdal estimated Generali would receive about $50 million in reinsurance premiums and other fees this year.

Migdal rose 0.45 shekel, or 7.5 percent, at 6.46 shekels in Tel Aviv, its biggest one-day gain since December 2003.