Hungary EcoMin sends a message to insurers: they must reverse this year's premium increases

Now it's the turn of the insurers. We see in the first three months that the inflation of services has remained at 10%, and the insurance sector is very much to blame for this.

Insurance prices have risen by 16.5%

said Márton Nagy, adding that insurance policies such as home, car and life insurance have become very expensive.

According to the Central Statistical Office (KSH), the weight of insurance in the overall consumer price index is 1.1%, and insurance contributed about 0.1 percentage points to the 4.7% inflation in March, which would have been about 4.6% if insurance had not increased.

According to KSH data, the average premiums of home insurance increased by 16.7% in one year, and those of vehicle and transport insurance by 4.2%. Márton Nagy was probably referring to the 16.5% increase in the price of home insurance, which is a natural consequence of insurance contracts that are indexed to the previous year's inflation, so there is no unjustified increase. In fact, this increase was even somewhat curbed by the March home insurance campaign, which was also ordered by Márton Nagy's ministry.

The timing of the roll-back of premium increases also raises issues of fairness. For those who had their anniversary last year, the premium would appear to remain unchanged, while for those who have their anniversary this year, the premium would revert to the previous level. Interestingly, the increase in premiums this year is much lower than last year, so the measure is unlikely to relieve consumers of the bulk of the increase.

Márton Nagy said that it is acceptable for them if premiums do not increase this year, insurers will refrain from increasing premiums in line with inflation, and where they have already done so, they will reverse it. The amount of home and car insurance will of course rise in line with inflation, so there will be no underinsurance, he added, saying: "We are negotiating this week, we will negotiate next week. We will meet again on Monday in two weeks' time.

If the insurers do it, that's fine, we can accept it as a voluntary commitment. If they do not, we will intervene with regulatory instruments,

he said.

Here's a gun. It's loaded. Point it at your foot! Good. Now pull the trigger! If you don't, I will. But I sincerely hope you volunteer to shoot yourself. I hope you've learned your lesson and now know that when the government tells you to do something 'voluntarily', it's just a sarcastic way of saying it's a bona fide ultimatum.

We wrote here about the government's new ideas to tighten the screws on an already over-taxed sector:

Banks have already made similar adjustments to their charges, which the government is now demanding of insurers:

Cover photo: Portfolio