As Dr Konstantin Klien, UNIQA Chairman, declared at a press conference held in Salzburg on July 26^th, 2002, “this new acquisition is a promising investment and will offer good opportunities on the Hungarian market. It will enable us start cost-efficient and result-oriented work in one our top-target markets”.

Funeuropa was founded in 1999 by Spanish companies with the objective of marketing funeral insurance. The company is now in the process of expanding its business by offering health and accident insurance, as well. In its two years of existence, Funeuropa has developed a distribution network comprising more than 200 agents who are backed by very lean administrative structures in Funeuropa’s central office in Budapest. Presently the company   manages a total customer portfolio of approx. 30,000.

By acquiring “Agrupacion Funeuropa Biztosito Rt.” UNIQA sees an excellent opportunity to participate in the rapidly growing insurance market of Eastern Europe and, at the same time, to strengthen the profitability of the newly acquired company through its international experience. The chances of success are also based on the enormous savings in start-up costs that a new company launch by “Greenfield operation” would have required.

As Dr Andreas Brandstetter, Member of the Board of UNIQA Versicherungen AG, in charge of international operations states, “since the end of 2000, when UNIQA sold its minority stake in the Hungarian sister company of Signal Iduna we have not been present on the Hungarian market. In line with our strategy to invest in international markets only if we hold a majority, we have thoroughly studied the various aspects of the Hungarian insurance business. Funeuropa is a company with a promising potential and with a structure enabling us to integrate our new acquisition into our Group’s development and growth strategy. It is also a perfect opportunity to start on the Hungarian market with a much lower start-up investment and to use and expand the distribution and administration infrastructures already in place”.

For the Hungarian market, UNIQA’s first step will be to develop the sales activities into a “cross-selling” system and to offer a wider range of products. In a second step, a life insurance line will be developed.

Dr Brandstetter adds, “we see new chances in Hungary to compete successfully on this rather mature market by offering innovative and high quality in perfect harmony with our Group’s strategy”.

The Hungarian insurance market

With very few exceptions, most of the 22 insurance companies presently active in Hungary belong to international finance and insurance groups. The big wave of privatisations and new  foundations started 5 to 10 years ago. This development resulted in a highly efficient and competitive market which offers a complete range of insurance products and distribution models based on IT technologies and is comparable to western standards.

Concentration is still the main feature of the Hungarian insurance business, the six major companies covering 87% of the market. The two leading companies in the life and non-life businesses hold a market share of 30.7% and 43.7%, respectively. In spite of very strong growth rates in the recent past, the Hungarian insurance potential is still quite high. Life insurance has only become a significant line in recent years and the private health insurance sector will grow in the near future. As preparatory measures for entry into the European Union, most of the legal framework has already been adapted to EU standards.