Hungarian Minister for the National Economy Márton Nagy announced on his Facebook page that the government will now go after insurance companies for excessive fees and has met with representatives from several banks to get them to comply.
“After food retailers, banks, and telecommunications companies, insurance companies are next. The goal remains the same: protect the Hungarian population against price increases!” he posted on the social media platform.
Insurance premiums have increased significantly in recent years, writes business news portal Portfolio, due to contractual indexations following the previous year’s inflation.
For home insurance, for example, despite the home insurance campaign that also had a price-reducing effect, the National Bank of Hungary (MNB) registered average premiums that were 17.1 percent higher at the end of 2024 than at the end of 2023, while the level of claims expenditure did not change significantly.
For compulsory motor vehicle liability insurance, the average annual premium increased by 8 percent, which was more than double the 3 percent annual increase in claims expenditure.
This year, insurers were given the opportunity to reduce their extra-profit tax sector level by increasing their government securities portfolio by about HUF 200 billion (€490 million), thus reducing their total special tax burden from last year’s 240 billion forints to under 220 billion forints.
It is not known to what extent insurers will pass on this HUF 20 billion reduction in the special tax burden to customers in the form of premium reductions or reductions in premium increases.
However, it is expected to negatively affect insurance brokers, who typically realize their commission income proportionally to premiums.
A few weeks ago, Hungarian banks agreed to voluntarily roll back the increases in bank account fees that they have implemented since December. They also undertook until mid-2026 to no longer pass on the increase in their internal operating costs and the inflationary impact to their customers.
Insurance companies may now follow suit.
Earlier this month, Remix News reported that data out of Hungary’s Central Statistical Office showed that the margin freeze on basic food items had had an impact, as consumer inflation came in lower than expected.
