HUNGARY: The MNB is working on a new concept to improve life insurance

5 December 2023 — Marina MAGNAVAL
The National Bank (MNB) wants life insurance policies with a better price-to-value ratio, lower cost and sold without defects on the Hungarian life insurance market, therefore it is working on a new, ethical concept to be introduced on the market, announced Gergo Szeniczey, Executive Director of the MNB at the MABISZ conference, reports.

The result of the first ethical concept was, among other things, that the retention of life insurance policies and complaints trend improved, the average period rose from the previous 6 years to nearly 11 years.

According to Gergo Szeniczey, the premium income of the insurance market will increase by 4.1% by the end of the year. At the same time, there is a drop in penetration. In the mid-2010s, the insurance penetration was around 2.5%, lower than the MNB's 3% target, this year it could be 2.29%.

The Executive Director of the MNB added that the capital adequacy of insurance companies stood at 199% at the end of 3Q2023 (vs 172% at the end of last year). On the other hand, profitability of insurance companies deteriorated, the return on equity was around 3.5% in 3Q (vs 9.5% in 2022 and 21.3% a year earlier), he explained, speaking about the market results after the first three quarters.