GlobalData takes a look at the insurance market in Hungary;
Hungary’s insurance industry is projected to grow at a compound annual growth rate (CAGR) of 6.3% from HUF1,204.86 billion ($3.91 billion) in 2020 to HUF1,635.5 billion ($5.67 billion) in 2025, in terms of gross written premiums (GWP), according to GlobalData, a leading data, and analytics company.
According to GlobalData, Hungary’s insurance industry is poised for a strong recovery in 2022 driven by government support measures for economic recovery and buoyant consumer confidence.
Rakesh Raj, Senior Insurance Analyst at GlobalData comments: “After contracting by 4.7% in 2020, the Hungarian economy is expected to grow by 7.4% in 2021. The recovery in the economy, as well as government-initiated stimulus programs, will support the insurance industry’s growth in the country.”
The government initiated various stimulus programs such as income tax reliefs, re-introduction of the 13th monthly pension scheme, and an increase in administrative wages are expected to improve household consumption and support the Hungarian insurance industry which is expected to grow by 5.3% in 2021.
Rakesh offers their view on the key segments in Hungary’s insurance industry:
“General insurance accounts for 56% of GWP in 2020 with life insurance accounting for the remaining 44% share. Within general insurance, Motor and Property insurance are major lines of business and account for 85.6% of premiums.”
“Motor insurance is expected to register a slower growth of 6% in 2021, compared to 7.4% growth in 2020, due to a decline in motor vehicle sales following the global chip shortage and delays in the delivery of components. Vehicle sales are expected to recover in 2022 which will help motor insurance grow at a CAGR of 6.5% from 2021-2025.”
“Property insurance is expected to grow by 5.5% in 2021, driven by an increase in housing demand following lowered VAT rates and housing subsidies provided by the government. Hungarian National Bank (MNB) in October 2021, introduced the Funding for Growth Scheme (FGS) Green Home Program which encourages the construction of environmentally sustainable residential properties by providing housing loans on lower interest rates. This will support property insurance growth in the country which is expected to grow at a CAGR of 6.4% from 2021-2025.”
“Life insurance, which accounted for 44% of the GWP in 2020, is expected to grow by 4.9% in 2021. Unit-linked endowment insurance products accounted for 64.3% of life insurance premiums in 2020. Unit-linked products are popular in the country as they combine both investment and protection benefit for customers. Life insurance is expected to grow at a CAGR of 6.28% during 2021-2025.”
Rakesh concludes: “Hungary’s insurance industry presents a positive growth outlook over the next five years driven by economic recovery which has already reached pre-pandemic levels by the second quarter of 2021. Demand for general insurance will be driven by rising disposable income while the country’s aging population will support growth of Life insurance in the country.”