Open AccessMethodological Background of the New Motor Third-Party Liability Insurance Index of the Magyar Nemzeti Bank
Author(s) -
Gabriella Merész,
Norbert Holczinger,
Koppány Nagy
Publication year - 2021
Publication title -
financial and economic review
Language(s) - English
Resource type - Journals
eISSN - 2415-928X
pISSN - 2415-9271
DOI - 10.33893/fer.20.3.5979
Subject(s) - index (typography) , stock market index , business , population , order (exchange) , liability , stock market , economics , finance , geography , computer science , context (archaeology) , demography , archaeology , sociology , world wide web
In order to provide an accurate description of developments in the Hungarian motor third-party liability insurance (MTPL) market, as well as to inform the public and stimulate competition, the Magyar Nemzeti Bank (the Central Bank of Hungary, MNB) has elaborated an index to indicate the MTPL premium level. The method offers a comprehensive picture of changes in average premiums, as it uses data from the central itemised MTPL database to cover not only the population switching insurers but also remaining contracts and new entrants. It reduces bias due to seasonal effects and trends by eliminating changes in the stock composition. It can also illustrate how much the premium has changed in relation to the change in the magnitude of claims, taking into account the estimated average change in claims. In our study, we present the statistical and methodological considerations used in the calculation of the MTPL index and describe the relevant characteristics of Hungarian MTPLs.