As of today, there are three forms of pension savings which dominate the Hungarian market: retirement savings (NYESZ), voluntary pension fund, pension insurance. Life insurance can also be considered a product for self-sufficiency. At first glance, there is no problem here: the amount in life insurance increased by 11.5% and in pension funds by 10% in one year, NYESZ as well - 9.1% more than a year ago.
However, within the savings market, these products have been underperforming for many years. Although gross financial assets of the population reached HUF 69,000 billion* by mid-2021, the money set aside for self-sufficiency reached only HUF 5,000 billion. While at the beginning of 2013 almost 10% of financial assets were in the form of self-sufficiency, today they account for only 7.2%.
Life insurance has performed best in the last year and a half. The Hungarian insurance market achieved an exceptionally high premium income growth of 16.9% in the second quarter - people spent 11.5% more on insurance in Hungary in the first half of the year than a year earlier. Surprisingly increase of life GWP did not stop with the easing of the pandemic: the premium income of regular non-pension unit-linked life insurance increased by 33% in one year. The Hungarian insurance market seems to have escaped the pandemic without recession.
There has been an increase in absolute terms, but a relative underperformance in terms of wealth in self-sufficiency products in the past year and a half has seen a seemingly temporary small improvement. The first half of 2020 produced such poor returns for pension insurance and pension funds as have been seen only once in the last decade.
There may be about one and a half million savers in Hungary who have self-sufficiency products specifically for pension purposes. Although the number of pension insurance policies is rising, this growth is slowing down, and the pension insurance market seems to be saturated, portfolio.hu explained.
* 1 EUR = 351.31 HUF (01.07.2021)
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