HUNGARY: the insurance sector's capital adequacy has fallen below 200% in 1Q

22 June 2022 —
Insurers, funds and the capital market had to face volatility risks and asset depreciation as early as last year and in the first quarter of 2022, but were able to maintain their stability, wrote based on the MNB's press release.

Based on the MNB's recent Insurance, Fund, Capital Market Risk and Consumer Protection Report, insurers' premium income grew by 10.4% last year, but GDP grew at an even faster pace, so the sector is still lagging behind the catching-up path set by the MNB in proportion to GDP.

The overall profit of the insurance market is still outstanding in nominal terms, but in a healthier structure than before, the report said. Exposures to the Russian-Ukrainian war are not significant, but the sector's capital adequacy has fallen below 200% (to 186% in the first quarter), mainly due to the rise in the yield curve and devaluation of assets.