BUDAPEST, Jan 2 (Reuters) - Hungary’s central bank aims to introduce measures in the second half of 2019 to enhance competition in the home insurance market that could make policies cheaper for consumers, the central bank’s managing director said.
The new measures by the bank, which also acts as financial regulator, would be similar to those taken in 2017 to curb the cost of fixed-rate mortgages, Csaba Kandracs told news website novekedes.hu, without giving details.
The bank’s steps to cut mortgage costs included limiting the interest rate spreads that banks could apply on such loans.
“In some segments, such as the mandatory car insurance market, competition is sufficient, but there are areas, where it is not, in home insurance, for example,” Kandracs said in the interview published Wednesday.
“If more players were competing here, then this type of insurance could become cheaper, or clients could get a higher standard of service for the same expense,” he said.
The top five players in the non-life insurance sector in Hungary are Allianz, Generali, Groupama , KBC Groep and Uniqa based on end-2017 assets compiled by the central bank.
The insurers did not immediately respond to emailed requests for comment.
Kandracs said the average return on equity in the Hungarian insurance sector was 24 percent, describing this as “fairly high” and saying this was a sign the market lacked sufficient competition. He did not give figures for comparable markets.
Kandracs said it would be desirable for insurers to establish a body to protect payments made by consumers, in the same way bank deposits are protected.
He said such a body could guarantee savings of up to 30 million forints ($105,700), although he said such a move would require parliamentary approval.
$1 = 283.8700 forints Reporting by Gergely Szakacs and Sandor Peto Editing by Edmund Blair