Hungarian insurance market

The top 5 insurance groups generated around 61% of the premium volume in 2019. The two largest insurance groups generated around 30%.

Market growth in the 1ST to 3RD Quarters of 2020 compared to the previous year

Hungary – Market growth in the 1st to 3rd quarters of 2020 compared to the previous year (bar chart)

Source: National Bank of Hungary (MNB)

In the first nine months of 2020, the Hungarian insurance market recorded a 4.1% increase in premiums in local currency terms. Both the non-life and life sectors contributed to this growth.

The non-life insurance sector recorded a 5.4% increase in the 1st to 3rd quarters of 2020. This was mainly due to good growth in motor own damage (+9.2%) and motor third party liability insurance (+8.1%). Both of these lines of business benefited from an increase in rates, among other things. The effects of the COVID-19 pandemic could be seen in travel insurance, which fell sharply by 55.9%. After three years of growth, health insurance also recorded a drop of 23.2% in the first nine months of 2020.

Life insurance premiums rose 2.4%. Tax-privileged pension insurance remained popular, recording a double-digit increase of 18.7% in the 1st to 3rd quarters of 2020. Unit-linked and index-linked life insurance grew 8.6%. Single premium life insurance, on the other hand, was down significantly (-12.3%).

According to Axco Global Statistics, the average per capita expenditure for insurance in Hungary was EUR 365 in 2019. Of this EUR 203 was spent for non-life insurance and EUR 162 for life insurance.

Market shares of the major insurance groups

Hungary – Market shares of the major insurance groups (ring chart)

Source: Hungarian Insurers Association (MABISZ); as of 2019

VIG companies in Hungary

The VIG Insurance Group operates with the insurance company Union Biztosító in Hungary. It had a market share of 8.1% in 2019, which put it in sixth place in the market. It was in sixth place for non-life insurance in 2019 and fourth place for life insurance. In November 2020, VIG Insurance Group signed a share purchase agreement with the Dutch company Aegon N.V. to acquire its companies in Hungary, Poland, Romania and Turkey. The acquisition will make VIG Insurance Group the market leader in Hungary. The acquisition is expected to be formally concluded in the 2nd half of 2021. The transaction is subject to the approvals required under supervisory and competition law.

Financial performance indicators in the Hungary segment

Premiums by line of business

Hungary – Premiums by line of business (ring chart)

Values for 2019 in parentheses

Premium development

In the Hungary segment, premiums written in the amount of EUR 287.8 million were recorded in 2020 (2019: EUR 289.5 million). The slight year-on-year decrease of 0.6% was mainly due to negative exchange rate effects. After adjusting for these effects, the Hungary segment recorded a 7.1% increase in premiums written. Net earned premiums were EUR 223.6 million in 2020, 1.8% higher than the value in the previous year (2019: EUR 219.6 million).

Result before taxes

The Hungary segment recorded a result before taxes of EUR 8.4 million in 2020 (2019: EUR 8.7 million). The decrease compared to the previous year was primarily due to the negative currency development in Hungary.

Combined ratio

The combined ratio improved over the previous year to 97.0%, mainly due to the growth in the motor lines of business (2019: 97.6%).