2013-09-15 09:32:09 - New Financial Services market report from Business Monitor International: "Hungary Insurance Report Q4 2013"
BMI remains of the view that Hungary's insurance sector will continue to face testing times through 2013 and 2014. A difficult economic environment and volatile financial markets will challenge the players in both the non-life and the life segments. Fortunately, most are local subsidiaries of multi-national groups who are able to achieve economies of scale across regional or global businesses. Nevertheless, the relatively small absolute size of the insurance sector, and the fragmentation of the competitive landscape suggest to us that at least some of the multi-nationals may reconsider their commitment to the market.
Key Insights And Key Risks
The Hungary Insurance Report considers the prospects for both life and non-life insurers in the country. Relative to its peers in Central and
Eastern Europe, Hungary stands out for several reasons. The most obvious is that it has been shrinking, by at least one metric, for years. The latest data, published by the Association of Hungarian Insurance Companies (MABISZ) in early 2013, indicates that, in terms of gross premiums written, both segments are smaller in 2012 than they had been in 2007. Although the life segment is dominated by unit-linked products, a characteristic that attests to the risk tolerance of Hungarian households who use life insurance and one that also sets Hungary's insurance sector apart from others in the region, the volatility of financial markets has taken its toll. Brutal competition in motor related lines (ie, both compulsory motorists third-party liability - CMTPL - cover and voluntary hull insurance or CASCO) has forced tariffs downwards: this is a challenge that has been highlighted by many of the insurers that have commented on business conditions in Hungary over the last year.
Full Report Details at
Hungary's is, of course, not the only non-life segment in Central and Eastern Europe in which there has been, or remains, competition in motor-related lines. However, BMI remains of the view that the competition has been exacerbated by the fragmentation of the market. In spite of the lack of growth and the small size of the Hungarian non-life market, by most metrics, all of the multinational companies that have a commitment to the region are present. Unlike in the Czech Republic, Slovakia and Poland (but in a similar way to Serbia, Croatia and Slovenia) small indigenous companies, collectively, command a significant market share. The life segment, too, is relatively fragmented.
At a time that many of the market metrics are moving in the wrong direction, some multi-national groups may come to see Hungary as a market in which they no longer need a presence. We would be amazed if there is not substantial consolidation over the coming three years or so.
Report Table of Contents:
BMI Industry View
- Table: Hungary Total Premiums, 2010-2017
- Business Environment
- Table: Hungary's Life Premiums, 2010-2017
- Non Life
- Table: Hungary's Non-Life Premiums, 2010-2017
Industry Risk Reward Ratings
- Industry Risk/Reward Ratings
- Table: Hungary Insurance Risk/Reward Rating
- Central and Eastern European Risk/Reward Ratings
- Table: Europe Risk/Reward Ratings
- Life Sector Update
- Non Life Sector Update
Industry Trends And Developments
- Life Growth Drivers and Risk Management Projections
- Table: Insurance Key Drivers, Demographics, 2010-2017
- Non Life Growth Drivers and Risk Management Projections
- Macroeconomic Outlook
- Table: Hungary - Economic Activity
- Political Stability Outlook
- Table: Europe Regional Security Ratings (scores out of 100, with 100 the best)
- Healthcare Insurance
- Table: Insurance Key Drivers, Disease Adjusted Life Years 2010-2017
- Table: Insurance Key Drivers, Autos 2010-2017
- Central And Eastern Europe Competitive Landscape
- Vienna Insurance Group
- UNIQA Group
- Central And Eastern Europe Non Life Sector Overview
- Table: Central And Eastern European Non-Life Premiums, 2010-2017 (US$mn)
- Central And Eastern Europe Life Sector Overview
- Table: Central And Eastern European Life Premiums, 2010-2017 (US$mn)
- Table: Hungary's Population By Age Group, 1990-2020 ('000)
- Table: Hungary's Population By Age Group, 1990-2020 (% of total)
- Table: Hungary's Key Population Ratios, 1990-2020
- Table: Hungary's Rural And Urban Population, 1990-2020
- Insurance Risk/Reward Ratings
- Table: Insurance Risk/Reward Ratings Indicators And Rationale
- Table: Weighting Of Indicators
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