Insurance Premiums Could Exceed HUF 2,000 Bn in 2025

Premiums of the insurance sector will likely exceed HUF 2,000 billion this year, Koppány Nagy, the National Bank of Hungary’s (MNB) director for insurance, said at conference of the the Hungarian Association of Independent Insurance Brokers (FBAMSZ) in Esztergom (N Hungary) on Tuesday.

Premiums in the first half of the year reached HUF 1,047 billion, up from HUF 871 billion in the base period, he added.

Nagy said insurance reserves are above HUF 4,000 billion, of which 52% is invested in government securities. Market competition has intensified, indicated by the fact that market concentration has decreased in most market segments. The share of the five largest insurers was at 63% last year, he added.

Bence Holló, head of the Association of Hungarian Insurance Companies (MABISZ), said the insurance sector's overall premium income could increase by around 20%, while there is still a moderate increase in the number of contracts.

The existing 3.3m home insurance contracts give an 80% penetration, the annual average premium of HUF 70,000 stands out in terms of price to value ratio even in European comparison, he said.

In the vehicle insurance segment, the number of mandatory vehicle insurance contracts is increasing, but due to the aging of the vehicle fleet and the high tax rate, the number of comprehensive insurance contracts was slightly down.

Within household savings portfolio, life insurance products remain stuck at 5% of the total, but pension insurance products now also account for 5%.

Holló said the biggest burden continues to be the extra sectoral tax, which has been imposed for the fourth year in a row this year. A positive development is that this may decrease from HUF 117 billion to HUF 64 billion through offsets with the purchase of government securities.