For the first time in a long while the Hungarian market recorded a positive growth rate in real terms: a 4.72% growth in GWP, an over 1.9% consumer price index. However, according to the latest statement of the Insurers Association (MABISZ) , "this growth is rather fragile at this point as its primary source is an increase in single premium life insurance sales." Life insurance accounts for a 54% share of the GWP volume, with underwritings of HUF 231.7 billion (EUR 784.4 million), up 9.95% y-o-y in national currency. Non-life premiums amounted to HUF 204.2 billion (EUR 667.4 million), decreasing by 0.8% as compared with 1H2012.

The persisting negative trend of the non-life segment is primarily a consequence of the uninterrupted shrinking of the auto insurance segment: in 1H2013 the Motor Hull line shrank by 12.3%, while on the MTPL class written premiums declined by about 2% y-o-y. According to MABISZ, these results are "part of a long-term trend, partly linked to a dramatic decline in new car sales, as a result of which auto insurance premium revenues decreased as a percentage of the total non-life segment from 53% to 40% in slightly less than 6 years. As for comprehensive auto insurance, the setback was only partly caused by less profitable premiums, another part of the problem being the declining number of policies: the 797,000 policies reported at the end of H1 2013 represent 4.1% less than a year earlier. "

The 10% premium increase on the life insurance side is mostly due to the increasing demand for single premium products, which saw a massive growth y-o-y. It is also interesting to observe this trend on the Unit-Linked products segment, usually considered a growth driver for the life insurance segment. Lately the highest popularity was recorded by other products than the classic long-term investment type policies. According to MABISZ, the explanation of this trend lies in the major structural change in investments following the "decline in deposit interests, pushing people towards alternative forms of investments." Yet, for the market stability this is not very good news, as such short-term products are easy to liquidate.

In terms of profitability, Hungarian insurers ended 1H2013 with a consolidated net profit of EUR 48.6 million. Life insurance balance for 1H2013 closed with a positive technical result of EUR 27.2 million, while on the non-life segment the technical result was negative, of EUR 34.76 million. An overall positive balance of the market resulted due to the non-technical results.

Read more in the forthcoming edition of XPRIMM Insurance Report - CEE, Russia&CIS, SE 1H2013, to be released on October 20th, on the occasion of the XPRIMM Reception in Baden-Baden.

Access www.xprimm.com and download the 1H2013 Hungarian insurance market statistics.

Market portfolio (in EUR and HUF) according to Hungarian Financial Supervision Authority (PSZAF):

• Gross written premiums
• Paid claims
• Growth rates
  

Market rankings (GWP/ Market shares/Growth rates - in EUR and HUF) according to Association of Hungarian Insurance Companies (MABISZ):

• Overall market ranking
• Overall life insurance ranking
• Non-life insurance ranking
• Compulsory MTPL