Key challenges of the Central and Eastern European

Market in View of Implementation of EU Regulations

INSURANCE BASED INVESTMENT
PRODUCTS ON THE SAVING MARKET
 Decision Technology Ltd. Study
• 80% of investment
decisions are face to face 48% of customers not
familiar with the
• 58% influenced by investment product
advice
27% not ready to shop
• 80% have trust in advisor around
EU focus on only 15-27% make optimal
interaction and advice investment decision
without help
 QUESTION IN HUNGARY
Will IDD and PRIIPs regulation – inspired by MiFID -
meet the expectation of lawmaker? Will sales
process result in better consumer decision and
more satisfied clients? The answer may influence
the long term competiveness of insurance industry
on saving market.

?
 Why IBIP should be strategic in HU?
• Still lot to do for the 2017Q2/2016Q2

insurance industry 25,00%

20,00%
• Life reserves represent
15,00%
4,2% of HU household
10,00%
assets. Decreasing trend.
5,00%
• Growth of life reserves
0,00%
lagging behind compared

Life Res.
T. Deposit
Cash
Shares
to other saving types.
 IDD – Better sales process?
• Mandatory provision of advice on IBIPs in HU
Advice • More responsibility on distributor

• Not the same rule for UCITs in HU

Market • Lack of level playing field
 PRIIPS KID – Better information?
• UCIT KIID and PRIIPs KID are not comparable
 • Flexible parameters make KID comparison difficult - HU
answer is further standardization
• Strict KID methodology results in figures that must be
 explained to the customer – Q&A is made in HU
• HU has a very similar cost index to RIY since 2010 (TKM)
 • Problem of duplicity
EC focus on personal pension products
• More choice, more mobility
Save more • More capital for long term
investment

• Better Finance study (2017) on

real returns
Save better • EC request to ESAs on costs and
past performance
 Pension insurance has strategic role in HU
(growth of premium income 2017Q2/2016Q2)
50,00%
41,90%
40,00%

30,00%

20,00%
6,30%
10,00%
3,20%
-5,40%
0,00%
Traditional Life UL Pension Total Life
-10,00%
PEPP Regulation is coming (2019?)

Chance and challenge at the same time

  ?
Simple, cost Domestic and Probability of
effective EU cross border having tax
pension product switching relief
 General issue of concern

Extremely tight implementation timelines for EU

regulations. Multy-layer of regulatory process
(consisting 3 or more different levels) must be
reconsidered for the future.
Thank you for your attention.
CONTACT
Association of Hungarian Insurance Companies
1062. Budapest, Andrássy út 93.
www.mabisz.hu
Katalin Lencsés
katalin.lencses@mabisz.hu