HUNGARY: FBAMSZ: The insurance market shows healthy growth of both revenues and profitability

25 October 2023 — Marina MAGNAVAL
The Hungarian insurance market shows healthy growth in terms of both revenues and profitability, but the decreasing number of intermediaries and low penetration mean challenges for the sector, Ministerial Commissioner Zsolt Kovacs spoke at the conference of the Hungarian Association of Independent Insurance Brokers (FBAMSZ) in Esztergom, wrote.

According to Zsolt Kovacs, the past year brought a crisis in many areas, but not in the insurance sector. Insurers and intermediaries are now in better shape than a year ago. The market is growing healthily.

The profitability of insurance companies has also increased significantly: between the mid-2022 and the mid-2023, profit of insurance companies was double that of the previous year, if we adjust for the extra profit tax. If there were no taxes, insurance companies would have achieved the highest profit in the last 15 years, and according to Zsolt Kovacs, this will also be true for 2023.

The income of the 20 largest players in the independent insurance brokerage market increased by 14.1% last year. 9 broker companies achieved revenues of over HUF 1 billion. Between 2018 and 2022, the average income increased by 78% and the average result by 104%, so this is a successful sector that has come out well from the past period, added Zsolt Kovacs.

In terms of insurance penetration, Hungary is in a bad position, in the EU the country is only ahead of Romania and Slovakia with 2.1%, yet in constant decline.

Lajos Papp, the president of the FBAMSZ, said in his opening speech: members of the association manage 4 million contracts and a portfolio of HUF 350 billion (~EUR 0.91 billion), the proportion of non-life insurance is 74% compared to 26% of life insurance. According to him, insurance penetration can’t be improved without increasing the number of intermediaries.

*EUR 1 = HUF 383.20 (25.10.2023)