Axco Insurance Information Services (Axco) has released its latest life insurance market report on Hungary. The report details must-know regulatory information, including the non-admitted position and company operating requirements as well as detail and insight on group and individual life insurance, pensions, social security and healthcare.
The Hungarian market is predominately one of savings vehicles rather than risk benefits. In 2020 total life premiums in 2020 increased by approximately 5% to HUF 538.07bn (USD 1,747.02mn) driven mainly by pension insurance products (tax deductible unit linked and endowments), which accounted for 25% of new regular premium business. PA and healthcare insurance (written by non-life companies) totalled HUF 44.31bn (USD 148.85mn), a decrease of 15.86%.
COVID-19 has not had much effect on the Hungarian life market, other than a minor decrease due to withdrawals of funds. However, there was a significant decrease in new policies, as marketing life products is complicated when personal contact is not possible. Lockdowns imposed in the pandemic fuelled the development of digital technologies for sales, new business acceptance and claims processes. Agents still hold consultations with prospects but do so by video calls, following up with email or postal offers and electronic acceptances.
Tax relief on pension premiums is 20%, up to a maximum of HUF 130,000 (USD 436.70) per year. Underlying products can be endowment assurance (mixed), unit-linked, individual and group pensions and ancillary accident and health. In 2020 25% of regular premium revenues came from pension insurance, with 77% of portfolio premiums being regular premiums.
The removal of tax relief on personal risk products in 2019 has initially affected new business volumes. Since then, there has not been a significant drop, although this varies from one employer to another.
The introduction of the "Super government bond" in 2019 initially diverted savings from bank accounts, investment funds and insurance investment products, mainly single premium business. In 2020, however, the impact was no longer felt due to the rise in inflation.
Axco's insurance market reports offer a uniquely detailed and comprehensive insight into the global life and benefits insurance market, combining the legislative and regulatory requirements, insurance market developments, and insurance market statistics of Hungary and over 170 territories worldwide.
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