Hungarians spending more on life insurance
Insurance companies registered a significant increase in revenues from life insurance in Q3, while the expenses connected with them barely rose. Damages paid out were also up, year-on-year.
Hungarian insurersʼ third-quarter revenue from premiums rose 7% year-on-year to HUF 225.3 billion, fresh data compiled by the National Bank of Hungary (MNB) shows.
Revenue from premiums on life insurance policies rose 7.3% to HUF 109.8 bln. Revenue from non-life insurance premiums increased 6.8% to HUF 115.5 bln. The number of insurance contracts rose by 3.8% in Q3 year-on-year to 13.31 million. There were 2.38 million life insurance contracts, up 0.5%, and 10.93 million non-life contracts after a 4.5% rise at the end of September.
In the first nine months of the year, revenue from premiums reached HUF 711.15 bln, up 6.4% compared to the same period in 2016. Revenue from premiums on life insurance policies rose 4.4% to HUF 338 bln and revenue from general insurance policies was up 8.2% at HUF 373.25 bln.
By the end of the third quarter, home insurance policies generated more than HUF 86 bln in revenue from premiums, revenue from premiums on mandatory vehicle insurance was over HUF 116 bln, and revenue from premiums on comprehensive vehicle insurance at nearly HUF 57 bln.
Damages paid by insurers by the end of September was at HUF 270.3 bln for life insurance contracts and HUF 166.6 bln for non-life contracts. In Q1-Q3 2017 insurers paid a combined HUF 437 bln of damages up by 7.2% compared to Q1-Q3 2016.
Total expenses for life insurance contracts was at HUF 70 bln in Q1-Q3, up only 0.1%. Costs for non-life contracts grew by 6.2% to HUF 195.8 bln.
MNB gathered data from 25 insurers, including seven life insurance companies, nine non-life insurers and nine composite insurers. Data shows combined pre-tax profit was at HUF 47.72 bln in the first three quarters of 2017, down 11% from the same period a year earlier while after-tax profit was down 5.4% to HUF 45.01 bln.
The capital adequacy ratio calculated at the sector level, calculated according to the Solvency II regulatory framework, which entered into force on January 1, 2016, continued to be stable, as seen in previous periods.
In 2017 Q3, the sector-level capital adequacy ratio was 223.4%, reflecting a slight drop of 1 percentage point relative to the previous quarter, but a significant increase of 8.1 pp relative to 2016 Q3.
The ratio significantly exceeded the requirements of 100% prescribed by law and the prudentially required 150% under the MNBʼs statutory provision recommendation. Nearly 70% of insurance companies (17 institutions) had their solvency margin ratio, calculated from eligible own funds and the solvency capital requirement, above 200%.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.