Motor third-party liability insurance premiums up 11% on average in Hungary
The average annual fee for drivers in rural areas (HUF 52,400) is more than HUF 27,000 lower than in Budapest (HUF 79,800). The average national premium increased by 11% year-on-year, with a 7% increase for those in the capital and 12% for those not residing in Budapest. Inflation appears to be moderating, with year-on-year inflation at 3.6% in March 2024, which is expected to reduce the rate of the rise in the premium.
Claims incurred roe by 8% in annual terms, meaning that
the growth rate of claims incurred has been lower than that of premiums for four quarters.
This may indicate that the increase in premiums is not fully justified by the increase in damages.
The MNB's adjusted KGFB (i.e. MTPL) index for passenger cars (which measures the justification for price changes and shows the net change in premiums adjusted for insurance tax and the impact of claims payments and provisions) stands at 130%, with a small increase in Q1. The index peaked in Q1 2021 and is currently at pre-pandemic levels.
In almost all other vehicle categories, except for fleet mopeds, premiums have increased significantly. In the case of fleet vehicles, the premiums jumped by over 20% for taxis and small buses, and edged up marginally by 3% for heavy trailers.
The central bank has been publishing a quarterly index showing the development of KGFB premiums and claims since 2021, using the Central KGFB Itemised Database (KKTA), which it operates on the basis of insurance data.
The MNB's website provides a colour infographic [in Hungarian] with the latest data showing the year-on-year and quarter-on-quarter changes in the annual KGFB premium for passenger cars and other vehicle classes compared to Q1 2016.
Cover photo: Getty Images
