Number of pension insurance policies in Hungary exceeds half a million
The number of pension insurance contracts in Hungary has been growing year after year, with tens of thousands of new contracts being taken out every year, with customers having a wide choice of 14 insurers now. Central bank (MNB) statistics showed that at the end of the first quarter of this year, there were already more than 497,000 contracts.
Based on the trend, it is safe to say that we have already exceeded 500,000 in August, as indicated by the newly published MABISZ Yearbook 2023 of the Association of Hungarian Insurance Companies (MABISZ), which explains that the growth in the number and income of pension insurance continues, with a 24.8% increase in premium income last year compared to a year earlier.
Pension insurance has a number of advantages that make this form of savings attractive. The state reimburses 20% of the contributions (up to HUF 130 000) each year in the form of tax credits. During the insurance period, the money paid in generates a return, increasing the value of the savings.
Many pension insurance products offer flexible conditions, such as the possibility to temporarily suspend payments, modify premiums or extend the term. If the insured person dies during the period of insurance, the beneficiary(ies) or heirs of the insured person will receive the amount of the insurance, which allows the family to maintain financial security and to be exempt from inheritance tax.
Some pension insurance products allow you to increase the amount you pay each year by the rate of inflation, thus preserving the value of your savings.
In Hungary, pension insurance is typically chosen by customers who are financially aware, have a stable income and are already thinking about their financial security in retirement.
As a result, per capita savings can now provide real support in retirement, contributions are steady, attrition is low and the number of contracts is growing dynamically.
As the Yearbook notes, pension insurance continues to be a key product in the life insurance sector, with contract growth of around 10% last year.
This is all the more remarkable as the number of life insurance policies (excluding accident, sickness and travel insurance) was 2,223,246 at 31 December 2023, 4.7% lower than a year earlier. The market has been hit hard by the decline in single premium products, basically because the extra profit tax makes this type of product unprofitable. Single premium income has almost halved compared to the previous year.
The yearbook also shows that the number of non-life insurance contracts on 31 December 2023 exceeded 13.2 million, an increase of 0.5% compared to the previous year. Within this, the number of contracts for motor and retail property insurance, the two with the largest weight, increased by 1.3% for Motor Third Party Liability Insurance (MTPL or KGFB in Hungarian) and 0.4% for household property insurance.
The publication analyses the situation and performance of the Hungarian economy last year, the development of the insurance market and the legal environment for insurance, the motor vehicle market in addition to the life and non-life market, and the activities of the MABISZ Separate Organisational Unit.
It also notes that the total assets of insurance companies amounted to HUF 3,671 billion last year - meaning that as institutional investors, they continue to represent a very significant investment capital force in the financial market.
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