The state will have a more active presence as a regulator in Hungary’s insurance sector over the coming months, the minister of economic development told a conference focusing on the topic of insurance in Budapest on Wednesday.
The sector is stable but has not been tapping all of the opportunities of change, Márton Nagy said, adding that although revenues from insurance fees have grown steadily, its market penetration continued to fall. Hungary, he said, is the odd-one-out in international comparison.
The number of insurance contracts is low while “the degree of market concentration can be further increased”, the minister said. “The state will step into the insurance market,” he said, adding that the measure would not mean a constant state presence but would help the sector’s consolidation. “There will be more consultations which will help the market and favour customers. The sector will work more with the [economic development] ministry,” said Nagy.
Speaking about Hungary’s economic outlook, the development minister noted the unfavourable external economic environment. He projected Hungary’s economic output would grow between 4.5-5.0 percent this year and shrink to 1 percent in 2023. He expected shocks, including rising energy and raw material prices and high interest rates, to effect both households and business weighing on economic growth. He noted a faster increasing rate of inflation in Europe than elsewhere in the world and a record high consumer price index.
Hungary is facing tough times ahead “because of all these trends”, Nagy said, calling the strengthening of Hungarian companies and attracting more foreign capital into the country important. As regards the 2023 central budget, he said “a hard work is under way”.