Market Guide: Life Insurance And Pensions In Hungary 2006

Publication Date	June 2007
Publisher	Datamonitor
Product Type	Report
Pages	24
ISBN Number	not applicable
Product Code	DAT06310

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Summary

Introduction

This report is most appropriate for companies looking for an overview of the life insurance and pensions markets in order to assess the level of market opportunity (using our market data and forecasts), regulatory barriers and opportunities, and level of competition in the market. For more detailed market data please refer to Datamonitor's European Life and Pensions Interactive Database 2006.

Scope

Presents competitor market data for life insurance and pensions companies;
Assesses regulatory barriers and opportunities;
5 years historic data from 2001-5 and 5 year forecast to 2010.

Highlights

In 2005, the market for traditional life insurance reflected a decline in premium income, while the market for unit-linked contracts grew. Heightened demand for investment products including a life insurance element was attributed to the solid performance of the Budapest stock exchange and the bond market.

HFSA Recommendation No. 1 of 2006 (I. 27.) established the principles applicable in the course of informing clients using investment (asset) management services. Apart from banks and asset management companies, it also applies to insurance companies and intermediaries, particularly in instances of selling unit-linked products.

As at December 2005, branches of insurance undertakings domiciled in Austria, France, the Netherlands, the UK, Germany and Spain had been established in Hungary and in excess of 200 member state insurance companies gave notification to the HFSA of their intention to undertake insurance activities through cross-border services.

Reasons to Purchase

Get an overview of the life and pensions market, including past growth and forecast growth;
Assess regulatory barriers and opportunities affecting life insurance and pensions in this country;
Analyze competition from life insurance companies.

Content

Overview
Catalyst
Summary
Executive Summary
Following compound annual growth of 8.9% in the last three years, between 2006 and 2010, growth in the Hungarian life and pensions market is set to accelerate to 21.1%
The Hungarian life and pensions market expanded by a compound annual rate of 8.9% between 2001 and 2005
Growth in the life and pensions market will accelerate
The market will continue to be shaped by EU legislation
Mutual insurance companies dominate the Hungarian market
The market leaders rely on distribution through intermediaries, including banks
Market Overview
- The Hungarian life and pensions market expanded by a compound annual rate of 8.9% between 2003 and 2005
- The Hungarian life and pensions market reflected a compound annual growth rate of 8.9% between 2003 and 2005
- Since 2003, the proportion of premium income attributed to non unit-linked insurance has declined
- Debt securities account for the single highest proportion of the investment assets of life insurance companies
Market Forecasts
- Growth in the life and pensions market will accelerate
- Over the next 5 years, premium income is set to grow at a compound annual rate of 21.1%
Market Regulation
- The market will continue to be shaped by EU legislation
- The Hungarian Financial Supervisory Authority (HFSA) regulates the life insurance and pensions sector
- Recent legislation affects insurance intermediaries
- Insurance providers and intermediaries are subject to HFSA recommendations on client information
- Distance marketing rules define sales practices
- Proposed anti-money laundering legislation implies an additional administrative burden for insurers
- Upcoming laws will enhance consumer protection
- Providers may be required to fund a new insurance guarantee
Competitive Market Structure
- Mutual insurance companies dominate the Hungarian market
- The Hungarian insurance market is dominated by mutual insurance companies, by number
- The top 5 life insurers control just under three-quarters of the market by gross premium income
Market Leaders
- The market leaders rely on distribution through intermediaries, including banks
- ING (ING Hungary Insurance Pte.Co.Ltd.) is the life insurance market leader, based on premium income in 2005
- OTP Garancia Insurance trails the market leader in the life insurance sector
- AEGON Hungary ranks third among life insurance companies
- Generali-Providencia is the fourth highest ranked life insurer by premium income
- Allianz rounds out the top 5 life insurers
Appendix
- Definitions
- Capital redemption policy / bond
- Composite insurer
- Defined contribution pension scheme
- Defined benefits pension scheme
- Group policy
- Individual pension scheme
- Individual policy
- Life assurance
- Occupational pension scheme
- Pension insurance policy
- Premium income
- Regular premium
- Single premium
- Technical provisions
- Traditional insurance
- Unit-linked insurance
- Further reading
- Interactive Databases
- Reports and Briefs
- Ask the analyst
- Datamonitor consulting
- Disclaimer
List of Tables
- Table 1: Life and pensions insurance premium income, segmented by product, EURm, 2003-2005
- Table 2: Life and pensions insurance premium income, segmented by product, in percentages, 2003-2005
- Table 3: Life and pensions insurance premium income, segmented by investment risk, EURm, 2001-2005
- Table 4: Life and pensions insurance premium income, segmented by investment risk, in percentages, 2001-2005
- Table 5: Investment assets of life insurance companies, EURm, 2001-2005
- Table 6: Investment assets of life insurance companies, in percentages, 2001-2005
- Table 7: Life and pensions insurance premium income, EURm, 2006-2010
- Table 8: Number of insurance providers segmented by type, as at Dec 2005
- Table 9: Top 5 life insurers by gross premium income, as at Dec 2005
List of Figures
- Figure 1: Life premiums accounted for more than 60% of total premium income between 2003 and 2005
- Figure 2: Between 2001 and 2005, the market for unit-linked insurance experienced compound annual growth of 21.1%
- Figure 3: The proportion of life insurers' investment assets held in stocks and other assets declined sharply between 2001 and 2005
- Figure 4: By 2010, premium income in the Hungarian life and pensions market will amount to EUR2.8bn
- Figure 5: Insurance companies account for 44% of the total market (life and non-life) by number
- Figure 6: ING led the Hungarian life insurance sector as at December 2005