Captive Insurance And Its Prospects In Hungary

Captive insurance has experienced significant growth globally in recent years, driven by hard market conditions, emerging risks and increased volatility. Statistics reveal a steady increase in the number of captives over the past four years, rising from 5,879 in 2020 to 6,181 by the end of 2023, according to the Captive Managers and Domiciles Rankings + Directory 2024 published by Business Insurance.¹ Captive insurance companies are also increasingly used by Forbes 1000 and Fortune 500 companies to manage complex and emerging risks.

Captive insurers, or "captives", are wholly owned subsidiaries created to provide insurance to their non-insurance parent companies. These entities offer a form of self-insurance, allowing the insured to benefit from underwriting profits. Despite the global rise, the popularity of captives in Hungary remains low, with only OTP Bank and MOL Hungary having established captives.