Budapest Business Journal 2521

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

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BUSINESS JOURNAL BUDAPEST

VOL. 25. NUMBER 21

NOVEMBER 17 – NOVEMBER 30, 2017

SPECIAL REPORT

Insurance SPECIAL REPORT

Hungary’s SMEs Remain Largely Uninsured Most Hungarian companies seem to put price ahead of other aspects when it comes to insurance. While some global trends are apparently reaching the Carpathian Basin, the lack of foresight among local SMEs still leaves a lot of room for the Hungarian corporate insurance sector. 16 SPECIAL REPORT

Health Policies Rise From Very low Base

The health insurance segment has been on the rise in Hungary, but the penetration of such policies is nowhere near that of life insurance. Most people get coverage from their employer; individuals prefer to pay for private health care.18

Celebrating 25 Years With our Partners

SOCIALITE

South Balaton Producers Hail Stellar Vintage

Producers from South Balaton were out in force in the capital on November 6 debuting wines from the 2017 vintage and the results were highly encouraging. 22

NEWS

Economy Doing Well, but Lagging CEE Peers It seems a good time to be Hungary’s economy minister: a casual glance at the ministry website reveals a veritable tsunami of positive news. But could the country do better?5

S N EW

We reflect on the not insignificant anniversary of the paper turning 25 years old, something we could never have achieved without the support of our readers and, of course, our business partners. 2

BUSINESS

An Economic Snapshot Through the Prism of HR The Budapest Business Journal polled senior HR executives to get a snapshot of the Hungarian labor market and related issues. The findings paint a fascinating picture.  12

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Budapest Business Journal | November 17 – November 30, 2017

THE EDITOR SAYS

BBJ

A QUARTER-CENTURY OF NEWS THAT WORKS This issue marks 25 years since the Budapest Business Journal first appeared. No other English-language publication has lasted as long, publishing as regularly. So, if you will forgive the indulgence, we will reflect a little on that achievement.

Much has changed in 25 years. The world is a very different place. According to some research we did for the Book of Lists, which also celebrates its quarter-century this year, average inflation in Hungary in 1993, for example, was 22.5%. You hardly need me to tell you the average today is 2.37%. The newspaper, too, has changed shape, adopted a higher quality (and no longer pink) newsprint, and moved from being a weekly to a biweekly publication from January 2008.

One thing that has not changed in all that time is our commitment to providing concise, clear and accurate information, information that business leaders can trust and use. Or, as the founders said on the front cover of that first issue of November 9, 1992: “Business News That Works”.

They added that readers would “find the facts you need to do business profitably in Hungary”. That is still the aim today.

Any publication that has been around for 25 years will generate a fair amount of statistics in its own right, and one of our colleagues has indulged in a little data mining. Tamás Kiss has a double interest in doing so; not only is he our financial director, but, having joined the

newspaper in 1999, he is the longest continuously serving member of staff (there are others here who joined before him, but they left and then came back).

According to his research, there have been 964 issues of the Budapest Business Journal. If you assume an average pagination of 24 pages per issue (a conservative assumption; it is not unusual for us to run 32- or even 40-page papers, and now very rare to drop to a 16-pager), that comes to 30,848 pages. Put another way, that is 74 km of newsprint weighing 960,504 kg.

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL STAFF: Sonja Bencze, Zsófia Czifra,

David Holzer, Levente Hörömpöli-Tóth, Christian Keszthelyi, Gary J. Morrell, Claudia Patricolo, Rob Smyth, Ágnes Vinkovits.

LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

Should be submitted in English to news@bbj.hu LAYOUT: Zsolt Pataki PUBLISHER: Business Publishing Services Kft. CEO: Tamás Botka ADVERTISING: AMS Services Kft. CEO: Balázs Román SALES: sales@bbj.hu

CIRCULATION AND SUBSCRIPTIONS: circulation@bbj.hu

Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu SUBSCRIPTIONS: Budapest Business Journal

In a LinkedIn post marking the anniversary, Stephen O’Connor, founder of New World Publishing, owner of the Budapest, Warsaw & Prague Business Journals from 1992 to 2004, wrote: “Twenty-five years ago today (on the third anniversary of the Fall of the Berlin Wall), a ragtag band of adventurers from America, Hungary, and Romania, after much difficulty, printed the very first issue of the weekly Budapest Business Journal.

No one told us we couldn’t – so we did. A year later, with only just 5,000 copies a week in English, we sold close to USD1 million in advertising – more than even the national daily newspaper at the time, the former Communist Party mouthpiece at 700,000 copies a day! ‘The world turned upside down’. Congrats to all my fellow colleagues of the BBJ and all alumni of New World Publishing, wherever you are in the world.”

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Budapest Business Journal | November 17 – November 30, 2017

News

///macroscope

Ratings Upgrade in the Pipeline?

The past few weeks saw a busy macro calendar: industrial output, consumer price index and gross domestic product figures were released, and one international credit rating institute revised its outlook for the Hungarian economy, which does not rule out an upgrade next year.

ZSÓFIA CZIFRA

Hungary’s gross domestic product grew by 3.6% in the third-quarter of 2017 from the same period of last year, according to raw data. Seasonally and calendar adjusted and reconciled data shows an increase of 3.8%.

The volume of GDP rose by 3.7% in the first three-quarters of 2017 compared to a year earlier.

Although first estimates do not detail the structure of the growth, the KSH said that the main contributors to the growth were market-based services. Zsuzsanna Boros Szőke, department head at KSH added that, in addition, the construction sector also boosted growth in the third-quarter, while agriculture held it back.

Reacting to the fresh release, the government confirmed its expectation of GDP growth of

around

4%

for the full year. Some analysts agree, but others are more cautious, putting full year GDP growth at 3.7-3.8%.

“Hungary’s economy grew dynamically in the third-quarter of this year, a trend accompanied by steadily rising wages, and thus working people have been gaining

The good news is that one of the major international credit rating institutions acknowledged the favorable macro figures the Hungarian economy has been producing.

On November 10, in its regular review, Fitch Ratings revised its outlook on Hungary’s long-term foreign- and local-currency issuer default ratings to positive from stable.

“A combination of high current account surpluses, European Union inflows and private and public sector external deleveraging have contributed to a marked improvement in Hungary’s net external debt position.”

more and more from economic expansion,” Minister for National Economy Mihály Varga said, commenting on the data.

Temporary Slowdown

Although Hungary’s industry performed a bit weaker in September than in the previous month, the slowdown is likely to be only temporary. In the ninth month of the year, industrial output showed a 0.7% setback from the previous month, but it is worth noting that in August, the sector grew a robust 5.5% from the same period of last year.

Of the sections of industry, production

rose by

5.7%

in manufacturing, representing a decisive weight (96%), and by 14.6% in mining and quarrying, having little weight.

The output of energy industry (electricity, gas, steam and air-conditioning supply) decreased by 2.6%.

Another good sign is that the purchasing manager index has been steadily above the 50 points marker, and stood at 59.3 in September and 58.3 in October, this indicates that industry can maintain its growth path in the coming months.

On the other hand, order stocks in the manufacturing sector are still lower than a year ago, they were 9.7% lower in September than in the same period of last year.

However, weaker order stock data hasn’t been reflected in industrial performance lately. Favorable global economic conditions and new manufacturing sector projects are also expected to continue to boost the sector’s expansion.

The question is, will we see a 4% (or even higher) GDP growth this year, or not? According to Takarékbank analyst Gergely Suppan, the government’s goal

can be reached. “Growth could pick up in the fourth-quarter, raising fullyear growth to 4%”, the analyst said in a press release reacting to the Q3 data.

The consumption dynamic, the wave of home and office construction, increased state investments supported by European Union funding, new automotive industry

“Hungary’s economy grew dynamically in the thirdquarter of this year, a trend accompanied by steadily rising wages, and thus working people have been gaining more and more from economic expansion.” capacity and manufacturing industry investments combined could lift GDP growth to 4.2% in 2018, he added.

Ratings Upgrade?

Not everyone shares such a high degree of optimism, Erste Bank senior analyst Orsolya Nyeste, for example, expects fullyear growth figures of 3.7% in 2017 and 3.4% in 2018, K&H Bank chief analyst Dávid Németh also predicts 3.7% for this year, but projects a slightly more ambitious 3.5% for 2018. ING’s head analyst Péter Virovácz thinks that the economy can expand above 4% in the fourth-quarter of the year, resulting in a 3.8% expansion for the full year.

“A combination of high current account surpluses, European Union inflows and private and public sector external deleveraging have contributed to a marked improvement in Hungary’s net external debt position”, Fitch said in the accompanying statement. The agency also revised its GDP forecast for Hungary: it now expects that the Hungarian economy will grow by 3.7% in 2017 and

3.5% next year.

Changing the outlook to positive usually indicates an upgrade in the sovereign debt in the foreseeable future. A continued reduction in external indebtedness and improved external liquidity supported by current account surpluses, sustained decline in government debt, and increased confidence in the economic policy framework and improved business environment that would support stronger GDP growth potential are factors that can lead to an upgrade, Fitch noted in its statement.

Numbers to watch KSH will publish how earnings have changed between January and September on November 23. On the same day, the second reading of retail trade data will be released. On November 28, we’ll find out about investment figures in the third quarter of the year, followed by employment and unemployment data for the period of August-October.

4 | 1 News

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Budapest Business Journal | November 17 – November 30, 2017

Cushman & Wakefield Opens Global Portfolio Services Center Cushman & Wakefield has opened its global Portfolio Services Center (PSC) at the Studium office building in Budapest. The choice of the location is seen as a significant success for Hungary; the country must attract companies from the high-quality service industry to provide employment possibilities for its population in this sector.

GARY J. MORRELL

“The PSC office in Budapest is an integral operation of the Cushman & Wakefield Global Occupier Services division and is shaping the future strategy of client portfolios, as well as providing day-to-day management services,” the company said.

The first 1,300 sqm phase of the office will accommodate around 150 staff. That is planned to be extended to up to

300 people

by 2019 with the addition of another floor.

The Studium center, next to Corvinus University and the historic building of the central market hall in District IX, was completed in 2010 by Wing.

James Maddock, head of global occupier services for EMEA at Cushman & Wakefield, describes occupier services as the fastest growing part of the company’s business. Budapest has been selected as the location for the office despite a trend for consultancies to choose Warsaw when establishing international offices in the CEE region.

“Occupier services provides consultancy services throughout the real estate cycle, from the creation of a general business concept strategy, acquisition of a building and transaction management, property management and facility management (FM),” Maddock said. He stressed that the PSC is a “front office” as opposed to a “back office,” reflecting the high skilled work undertaken by staff.

Increased Recognition

Minister for Trade and Foreign Affairs Peter Szijjártó said he saw the establishment of the Cushman & Wakefield

The interior of the Cushman & Wakefield Portfolio Services Center in Budapest. office as a sign of the increased recognition of Hungary as a venue for value-add employment.

“Hungary now has the opportunity to retain a well-trained workforce and there is also the opportunity for Hungarians to return home.

This is a paradigm shift, in that Hungary is no longer just a destination for companies setting up assembly facilities. In this sense, it has developed into a venue for the provision of high level services,” he said at the official opening of the PSC. The Hungarian government will provide funds for training at the center.

A shortage of skilled labor has been seen as a barrier to growth in all sectors of the real estate and related industries, with a perceived need for training or the creation of conditions that would attract Hungarians working abroad in the EU to move back home.

The PSC office interior was designed by Réka Kiss, with graphical design by Anikó

Kuthi. The center provides 130 work stations with an additional 100-person capacity meeting area.

Sustainable Office

“The development space plan was for a comfortable and sustainable office. In the current market, a priority is retaining staff and with similar salaries across the market the office environment is an increasingly important element in staff retention and recruitment,” commented Ádám Csikós, head of project and development services at Cushman & Wakefield, who worked on the office interior.

The office interior is regarded as being of the same quality as anything found in major Western European capitals.

“International customers require the same standard of offices in Hungary as elsewhere and therefore more effort and expense is required in fit out and interior design,” Csikós concluded.

Growing Office Pipeline in Budapest and Across Central Europe Eston International estimates that approximately 400,000 sqm of office development is currently ongoing in Budapest in a market suffering from a shortage of quality space.

GARY J. MORRELL

“In the first half year there was a significant 22% decrease in the volume of office leases compared to the data for last year,” the Hungarian consultancy said in its latest market research.

“The fall in demand can be explained by the shrinking supply: since the average vacancy rate has been decreasing continuously, it is becoming more and more difficult to find

Office Garden suitable, big contiguous offices,” it explained.

Eston International has recently formed an association with Savills, the London-based consultancy that is extending its CEE network with cooperation agreements also concluded in Czech Republic and Serbia.

The two major handovers for the year will be in south Buda, where the Hungarian GRT Group is due to deliver the third 18,500 sqm phase of Office Garden, and Wing is scheduled to complete the 24,000 sqm Ericsson research and design headquarters

at the Nobel Prize Winners Research & Development Park. The former was already 70% let by this summer, and the latter is a built-to suit project.

Falling Vacancy, Rising Delivery

Against this background of falling vacancy, delivery is expected to rise significantly in 2018 according to Eston. “If developers are able to keep the earlier set schedule despite

shrinking capacity in the construction industry and increasing prices, modern stock might expand by 386,000 sqm by the end of next year,” the company said. “However we currently see that 250,000 sqm will be delivered in 2018 as some handovers have already been postponed,” it added.

Eston has traced 316,000 sqm of space scheduled to be handed over next year in the two office development hot spots of Váci út and south Buda.

“The dominance of Váci út is expected to continue in the near future; the amount of modern office stock handed over in the area is going to surpass one million sqm by the end of next year. In the south Buda submarket, which with 3% has the lowest vacancy rate, the completion of new offices of over [sic] 118,000 sqm can be expected a year later, in 2019,” said Eston.

JLL, meanwhile, has traced 477,000 sqm of office space under construction and due to be completed by the end of 2019 in its latest Budapest profile. As of the end of the third-quarter, 38% of this total was pre-let with vacancy having fallen to a record low of 7.6%. By way of a regional comparison, JLL estimates that 333,000 sqm of office space is under construction in Prague.

Cushman & Wakefield estimates that 190,000 sqm of office space will be delivered in the Prague office market next year, of which 23% is pre-leased.

1 News | 5

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Budapest Business Journal | November 17 – November 30, 2017

Economy Doing Well, but Lagging CEE Peers For comparison, Romania – the star performer of the second quarter with 6.1% growth – produced what one analyst termed “rip-roaring”

It seems a good time to be Hungaryʼs economy minister: a casual glance at the ministry website (www.kormany.hu/ en/ministry-fornational-economy/ news) reveals a veritable tsunami of positive news.

8.6% growth

Dream Interest Rates

KESTER EDDY

Releases in early November tell of a booming construction industry, stable public finances, improving national competitiveness rankings positive sentiment from foreign investors and a notch upwards in the country’s ratings by Fitch, the credit ratings agency.

Capping this, preliminary

Q3 results

reveal Hungary’s economy expanded by 3.8% (calender adjusted) year-onyear – prompting Minister for National Economy Mihály Varga to state: “The domestic economy grew dynamically in the third quarter, which coincided with a steady increase in wages. So employees are increasingly enjoying [the benefits of] economic growth.”

Despite super-low borrowing costs and various credit schemes, small- and medium-sized businesses are generally baulking at the risk.

In terms of results at least, Varga can sleep well at night. But in an age when government spin can easily morph into fake news, the neutral observer must ask: is it all true?

The answer is “Yes – but read the footnotes”.

“The major indicators of the economy are relatively good,” Éva Palócz, CEO of KopintTarki, a Budapest economic think tank, told foreign journalists earlier this month.

“The structure, the composition of the growth rate, is much more balanced than previous years…. This year, and maybe next, private consumption and investment will have a positive contribution on growth,” she says.

In addition, with interest rates at record lows, “corporations can get credit at very, very low interest rates of 2-3-4%. Ten years ago, we couldn’t dream of this.”

So far, so much like government-speak.

At this point, however, Palócz departs from the official view. For despite super-low borrowing costs and various credit schemes, small- and medium-sized businesses are generally baulking at the risk.

And behind this reluctance is “unpredictable and non-transparent” government policy, she says, citing a business survey conducted late last year.

“We asked the question: why is your investment so low? We asked

in the third, putting it on track for near 7% expansion this year.

From afar, a similar pattern emerges: London-based analyst William Jackson, of Capital Economics puts Hungary’s growth at 4% this year. However, he warns: “This is as good as it gets,” with growth “softening” to 2.8% next year, and inflation rising from 2.5% this year to a worrying 3.8% in 2018.

Intriguingly, Jackson notes that in 2018, growth will “remain faster than potential” - a conclusion that might favour the government line – or not, according to meaning.

“Perhaps we used too much jargon here,” Jackson told the Budapest Business Journal. “Potential growth essentially refers to the underlying rate of growth in the economy, which is determined by how quickly the labour force can rise and how much growth there is in output per worker, or productivity. In Hungary, this ‘potential’ rate of growth is about 2-2.3%,” he said.

Hungary has ‘outperformed’ its natural rate by drawing down European Union funding as fast as possible – boosting

its short-term (and pre-election) performance, but risking stability midterm, he argues.

Indeed, Jackson believes interest rates will need to rise sooner than expected to counter inflationary pressures, or Hungary may face “a nastier inflation shock, and more aggressive rate hikes, further down the road”.

“Yes, we have speedy growth compared to the EU average, but not [within] the region. Compared to the other 11 Central and East European countries, it is nothing special. It is average, maybe a little bit less than the average.”

Inflation, of course, is primarily the central bank’s responsibility – so Varga can continue to sleep soundly.

But analysis reveals efforts to boost the economy before next year’s elections come at a cost, and Hungary’s economic performance in the current benign global context is not so robust, as he might like it to appear.

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300-400 companies,

and it was almost always mentioned: We do not know the future environment for our sector. What will the new regulations say?

What about property rights?”

With such concerns, it is little wonder that SME development in Hungary is stunted, Palócz argues.

On the macro-economic level, András Vértes, head of competing economic consultants GKI, recently upped growth forecasts for both this year and 2018 from 3.5% to 3.8%, based on faster than expected investment and increasing consumption – itself a product of wage growth of around 11%.

Everything is Relative

CHRISAND

Again, this is in tune with the official song sheet. However, what the government repeatedly ignores – except occasionally, when figures allow it to claim superiority – is that, relative to its peers, Hungary’s performance is, if anything, somewhat below par.

“Yes, we have speedy growth compared to the EU average, but not [within] the region. Compared to the other 11 Central and East European countries, it is nothing special.

It is average, maybe a little bit less than the average,” says Vértes.

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2017. 11. 15. 14:43:33

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Budapest Business Journal | November 17 – November 30, 2017

Business

Pop-up Retailing Gaining new Ground

Although pop-up shops have been around in Hungary for a while, the concept has started to extend into other genres: today, not only do temporary fashionthemed stores appear, but the idea is also becoming increasingly popular in gastronomy and even in the media field.

ZSÓFIA CZIFRA

If you take the glass elevator to the top of Mammut shopping center in the heart of Buda and then follow the temporary signs that lead through an area rarely seen by regular customers, you will soon find yourself in a secluded location where a secret, and also temporary, store operates.

This is Titkosbolt (it literally translates as “Secret Shop”), a small business run by businesswoman Zsófia Ungváry. But one had better be quick, as the shop sells its exclusive clothing items for four weeks only before it disappears, only to pop up again next May, at a location yet to be determined. This time, the sales period started on November 18.

“There’s a collection of some 500 individual pieces carefully picked by myself, and these luxury items will only be available for a month,” Ungváry told the Budapest Business Journal, showing the small but luxurious space located on the top of the mall, a location she had negotiated over for a long time. But the concept requires such a special

location, she says, as it greatly contributes to the feel of exclusivity that Ungváry’s buyers already enjoy.

“The world of fashion today is overwhelmed by mass-products and mass brands; the market is ruled by multinational companies,” Ungváry says. But there is an ever-growing demand for exclusivity and uniqueness, and one way to satisfy such needs is the concept of pop-up retail.

There is only one single item of everything Ungváry offers, whether that is a coat, a pair of shoes or a bag. Brands include Furla and Michael Kors. The target group of the business is women

aged

35-50,

for whom it is important to own unique and luxurious clothes that they won’t see worn by others. The one-month sale period starts with an exclusive opening party, to which only VIP customers are invited.

Social Event

“This is also sort of a social event, as many of my clients bring their friends. The ritual

of shopping thus becomes quite personal; in many cases, I pick items based on the preferences of my individual customers,” Ungváry explains.

The main advertising tool of the shop is word of mouth marketing, which is how the vast majority of Ungváry’s customers get their information about the place and time of the next Titkosbolt event. People “popping in” from the street represent only about 5-10% of the shoppers.

“The world of fashion today is overwhelmed by mass-products and mass brands; the market is ruled by multinational companies.”

As the name of the business suggests, customers are given the feeling of belonging to a special group, and this feeling of exclusivity is enhanced by the fact that the venue of the pop up shop keeps changing - the first time, for example, it was held in a remote mansion in the Buda hills.

But what is pop up retail? While the concept might feel fairly new to modernday retail and marketing, in fact its roots

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Budapest Business Journal | November 17 – November 30, 2017

go way back in history. Temporary retail establishments date to the Vienna December

market in

1298,

and the European Christmas markets that followed. Seasonal fairs are another good example of pop-up retail. Customer demands have changed, fast and tangible actions

are needed while, in the meantime, we are increasingly conscious about not missing a thing, says communications expert Kornél Bőhm, explains the modern-day reemergence and spread of the pop up concept.

Psychology of Scarcity

Pop up shops serve such purposes perfectly. It is based on the psychology of

Business

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seen as being of an enormous benefit during the global financial

crisis of

2008:

on one hand, creating a temporary sales location was cheaper for young designers than renting a permanent retail space, and it was also a great tool for filling retail spaces, even temporarily, that would otherwise be standing empty.

Later, luxury fashion brands including Kate Spade, Louis Vuitton and Colette started to develope pop-up shops as part of their campaigns.

In Hungary, fashion designer brand Nanushka was the first to sell its items via pop-up shops. The concept later started to extend into other genres. For one, hamburger outlet Zing started life as a pop-up.

“The method is often used for testing new markets,” Bőhm said. “It is a costsaving solution to start a business or to monitor market demands and get feedback about a new enterprise’s products or services.”

Apart from the world of fashion and gastronomy, there are quite unusual areas where the concept can be detected.

The Dutch, for example, invented the church on demand concept: a transparent inflatable tent that pops up at a location when an urgent need for worship arises.

Pop-up papers also exist, such as a publication in the United Kingdom reacting to the Brexit decision that had only four issues.

scarcity: simply put, people place a higher value on an object that is scarce, and a lower value on those that are abundant.

The concept brings together immediacy and experience, two keywords for today’s new generation.

What we today call pop-up retail started to appear in the United States at the beginning of the 2000s, and was

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Budapest Business Journal | November 17 – November 30, 2017

Negotiating a Niche for Mediation Photo by Botond Nemcsics

A boutique Budapestbased law firm is carving out a niche for itself in the field of mediation, culminating recently in an invitation to speak at a National Bank of Hungary (MNB) conference.

ROBIN MARSHALL

“I would not say we are the only ones who spotted this trend; however, we are one of the few law firms who openly communicate a business mediation service offering,” says Dénes Horváth, business mediator at the S. Horváth Law and Mediation Office. “We are really proud to have presented a real-life business mediation case in detail at the ADR conference in September.”

Domus_BBJ_Print_252mmx158mm_nov10.pdf

Mutual Benefit

Ágota and Dénes Horváth talk about mediation at Alternative Dispute Resolution Conference.

He is talking about the second Alternative Dispute Resolution Conference (II. Alternatív Vitarendezési Konferencia), held on September 28-29 at the Hungarian Academy of Sciences. Jointly organized by the MNB, the National Court Office (OBH), the Financial Arbitration Board (PBT), and Wolters Kluwer Kft., the firm 1

2017. 11. 11.

gave a presentation called “Creating mutual economic value through business mediation”.

Horváth and his wife Ágota run their eponymous law firm together: she is the managing partner and runs legal services; he is responsible for mediation services.

Dénes says they approached the field from different perspectives.

“Ágota came to the conclusion in the past seven years that only a small fraction of the clients in litigation found the judge’s verdict a real solution, while this is why they opted for going to court in the first place,” her husband explained. “At the same time, she also realized that there is a period in the escalation curve of conflicts where it is still possible to find a solution for the mutual benefit of the parties. This is where the parties no longer negotiate – so there is a cold war or stand-off – but they haven’t started litigating either. If you manage to make the parties in conflict realize that there is still room to collaborate and move on, it can be an enormous win for both, since they share the problem anyway.”

Dénes says his background as a management consultant working on organizational transformation cases led him to realize “that at least 25-50% of every change process has to be handled by conflict management, organizational dispute resolution, or internal mediation or else – however smart the advice – it will fall short.”

That, in turn, has led him to use a hybrid of consulting and so-called evaluative mediation, where clients are advised on alternatives. “Family-owned business succession is where the whole process is really spectacular,” he notes. “The method we apply is based on evaluative mediation but has been adapted by us in the past seven years to local circumstances (cultural, economic and psychological factors specific to the Hungarian social and business scene). We call our proprietary method ‘SIT – Solve It Together’.”

0:27

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2

www.bbj.hu

Budapest Business Journal | November 17 – November 30, 2017

When to use Mediation

INSIDE VIEW

“If you manage to make the parties in conflict realize that there is still room to collaborate and move on, it can be a huge win for both, since they share the problem anyway.”

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SWISS Business Day 2017 Innovation and Talent

time is absolutely precious, so they no longer want to spend up to four-to-eight years in court.”

He adds that the Hungarian legal system has also changed quite a bit in the past few years. More importantly, from January 1 next year, the Civil Court Procedure Law changes in a way that judges will be obligated to offer the possibility of mediation in business disputes as well in the first hearing. The law firm recommends that clients looking for mediation services on the market check whether the mediator has an education background in business as well as experience in business mediation. “We also recommend to check whether the mediator uses evaluative mediation. In our experience, these techniques have a clear advantage over transformative mediation in settling business disputes,” Dénes adds.

Growth Hacking to Propel Telenor Accelerate Hopefuls to new Heights As Telenor’s corporate startup program progresses, methods like growth hacking are taking center stage.

Family Finances team.

Startups tend to struggle with many obstacles in their early phase of development, the majority of which are related to limited financial resources and lack of revenues.

But while generating market traction is key, so is keeping costs to the minimum.

That is where innovative solutions such as growth hacking come in.

“We need to come up with tools that can boost growth without massive budgets,” notes Gábor Fodor-Papp, founder of Family Finances, one of the mentored startups, which aims to improve overall financial awareness whilst also developing a virtual wallet.

“We’ve got a very specific target group with parents and children. All we need to do is to create a likeable product they are happy to promote by sharing,” he says.

“Instead of push marketing, the emphasis is put on volunteerism which drastically cuts customer conversion expenses.”

Fodor-Papp admits he and his colleagues are in search of a wider range of tactics that has the same impact, especially because Family Finances is active both in the B2B and the B2C segments.

Another way of luring would-be customers to stick around is to life easier for them by letting them register seamlessly, or integrating functions into the app that incentives daily use.

“Integrating individual e-commerce records will lead to an intensified level of engagement,” says Fodor-Papp.

“On the other hand, opportunities in content marketing should not be left untapped, either.”

As highlighted by Zsolt Czigler, co-founder of Vimage, an app that allows

INNOVATION Insight

users to make cinemagpraphs, there is no standard way of growth hacking. The bottom line is that general out-of-the-box thinking is required to make it work well.

“Creativity is what matters most at the end of the day,” he says. “We started with an Instagram campaign where our watermarked samples can lead to more visibility.”

Anton Kovach, CEO of Shiwaforce Zrt. points out that the danger that startup founders often get carried away by their own product and they fail to beat their own bias. Kovach is participating as a trainer in the program and says that what makes or breaks a project is the direction in which all that sweeping positive energy is channeled.

“The truly successful startups regard their idea as a hypothesis they validate on the market from time to time,” he says. “They start developing only once they have gathered enough evidence that their hypothesis works in practice.”

This is where so-called agile development kicks in. In this phase, all market feedback gained in several two-week intervals is processed and output is adjusted to the needs of potential customers.

“It is all about continuous adjustment,” Kovach stresses. And so is growth hacking, which is meant to identify and, more importantly, harness interest.

“Growth hacking constitutes an approach that came to life around ten years ago with the purpose to generate dynamic expansion with nearly zero budget. By applying relevant methods, the product under development can be tested, and participants of the Telenor program can benefit from this concept as well,” Kovach adds.

sponsored by

NOTE: ALL ARTICLES MARKED INSIDE VIEW ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

► Not all conflicts can be solved by mediation, but if you find your company ticking at least a few of the below boxes , the chances are it could provide an answer. ► The parties in conflict have stopped the negotiation process with each other ► There has been a silent stand-off for a while with no meaningful action ► The parties are reluctant to go to court because their lawyers advise that the litigation process can take a long time and the outcome is uncertain ► The parties depend on each other in doing business ► The parties realize that their dispute is a shared problem ► The parties don’t want an arbitrator or a judge to impose a verdict on them ► Either or both the parties are in possession of information (trade secret, intellectual property, know how etc.) that they do not want to share with the other party of the court ► The parties realize that parting ways is less beneficial for both of them than finding a solution and staying together

Dénes is clear that, based on the experience of the law firm over the past few years, the need for mediation is a growing trend. “Business owners want cost- and time-efficient solutions to their problems. And they have more and more problems (i.e. conflicts). Their

Business | 9

10 | 2

Business

www.bbj.hu

Budapest Business Journal | November 17 – November 30, 2017

Company ///news

Nestlé Opens HUF 20 bln Expansion at pet Food Plant in Bük Swiss-owned Nestlé Hungária Kft. inaugurated a HUF 20 billion expansion at its pet food plant in Bük (210 km west of Budapest) on November 10, reported tozsdeforum.hu. Minister for National Economy Mihály Varga said at the ceremony that the 5,000 sqm plant shows Nestlé’s commitment to Hungary.

In addition to its pet food plant, Nestle Hungária makes cocoa and coffee products in Szerencs (210 km northeast of Budapest) and chocolate figurines in Dósgyőr (also in the northeast of Hungary). In 2016, Nestlé had revenues of HUF 125 bln. The company employs more than 2,400 people and has invested more than HUF 100 bln since its foundation in Hungary in 1991.

GE Hungary Unit Wins Large-scale U.K. Contract From Sainsbury’s General Electric’s (GE) lighting plant in Nagykanizsa (215 km southwest of Budapest) has received an order for 250,000 LED lights from U.K. supermarket chain

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Sainsbury’s, a spokesperson for GE’s lighting division said, according to magyaridok. hu. The LED lights will be fitted at 450 Sainsbury’s supermarkets over the next three years, said Kinga Kalocsai. The plant recently started the production of LED panels, which are able to cooperate with smart technologies. The full order exceeds the plant’s annual output, she added. The plant employs around 2,000 workers.

Opel’s new Plan Designed to Maintain all Plants The restructuring that Opel motor vehicle manufacturer is undergoing will make it a profitable and global electric car producer, said Michael Lohscheller, CEO of Opel–Vauxhall, reported mno. hu. Perhaps more importantly for local jobs at the engine plant in Szentgotthárd (275 km southwest of Budapest, close to the border with Austria), the recently unveiled plan to harness synergies with Opel’s new owner, France’s PSA, will not involve plant closures or layoffs. A spokesman for the local unit confirmed earlier in November that some contract laborers had been let go and that a further reduction in their number was expected

Tram No. 1 Route Extension Starts Traffic signs mark the start of roadworks for the extension of the Tram No. 1 line at the intersection of Hengermalom út and Fehérvári út, on November 13, 2017. MTI Photo: Zoltán Balogh. The extension of the route of Tram line No. 1 to Kelenföld railway station started on November 13. The project will cost HUF 8.63 billion, of which HUF 8.5 bln will come from the European Union operative program to develop transportation, index.hu earlier reported. The works are scheduled to finish at the beginning of 2019. The 1.7 km long tram line will run in the middle of Etele út, turn onto Somogyi út, and will terminate at Etele tér. Some trees will have to be felled, but 500 new trees will be planted instead. Etele tér will also be renovated as part of the project, and a bicycle path built.

this year because of changes to production volume. The Szentgotthárd factory turned out about 630,000 engines last year. “The plan is designed with the clear intention to maintain all plants and refrain from forced redundancies in Europe,” Opel

said in a statement. “The necessary and sustainable reduction of labor costs shall be reached with thoughtful measures such as innovative working time concepts, voluntary programs or early retirement schemes,” it added.

Gruppo T.F.M. KFT. 1068 Budapest, Király u. 102.

1st District

3rD District

4th District

7th District

12th District

14th District

106 sqm – 3 rooms, országház street

48 sqm – 2 rooms, hadrianUs street

84 sqm – 4 rooms, homoKtövis sUbdiv.

75 sqm – 3 rooms, baross sqUare

128 sqm – 3 rooms + hall, böszörményi str.

38 sqm – 1 room, ameriKai street

In the Buda Castle, this completely renovated, very spacious, unique apartment benefits of private gas heating, terrace and private garden.

This very sunny, high floor apartment, that needs renovation, has beautiful panorama from the balcony and it is situated within a renovated building with elevator.

In a new built subdivision, this street facing apartment benefits of separate rooms, 2 bathrooms, terrace and private gas heating.

In a well maintained building with elevator, this very bright, street facing, high floor apartment benefits of separate rooms, sleeping gallery and private gas heating.

This completely renovated, garden facing, high floor apartment has two bathrooms and private gas heating. It is situated within a well maintained period building with elevator.

This very bright apartment, that needs renovation, has private gas heating, large balcony and parking space in the courtyard.

99.000.000 hUF

17.500.000 hUF

39.900.000 hUF

27.500.000 hUF

68.900.000 hUF

+36.1.201.0403

2nD District

+36.1.430.1403

3rD District

+36.1.782.7275

4th District

+36.1.351.0446

7th District

+36.1.789.2846

12th District

20.900.000 hUF

+36.70.642.7598

14th District

75 sqm – 3 rooms, Fillér street

45 sqm – 2 rooms, raKtár street

226 sqm – 4 rooms, megyeri street

73 sqm – 3 rooms, rózsa street

126 sqm – 3 rooms, ignotUs street

70 sqm – 3 rooms, angol street

In a quiet and green area, this sunny, garden facing apartment has living room with open kitchen, 2 separate bedrooms and 20 sqm of terrace.

This sunny and quiet, street and garden facing apartment has private gas heating and it is situated within a well maintained building.

This two storey family house built on 423 sqm of lot, has two bathrooms, underfloor heating, alarm system and garage. It is located in the garden suburb area.

Close to the beautiful Rózsák Square, this sunny, renovated apartment has separate rooms and private gas heating. It is situated within a nice, renovated period building.

This completely renovated, very spacious apartment has nice view over the Városmajor Park, fully fitted kitchen and two bathrooms. It is situated within in a renovated building with elevator.

This very well divided, sunny, street facing apartment has separate rooms and private gas heating. It is located in a very quiet and green area. Good connection to public transport.

34.900.000 hUF

120.000.000 hUF

28.900.000 hUF

56.800.000 hUF

+36.1.336.1706

2nD District

25.900.000 hUF

+36.1.430.1403

3rD District

66.990.000 hUF

+36.1.782.7275

5th District

+36.1.351.0446

10th District

+36.1.789.2846

13th District

+36.70.642.7598

15th District

98 sqm – 3 rooms + hall, bajvívó street

41 sqm – 2 rooms, KossUth l. rivers. res.

73 sqm – 2 rooms, váCi street

60 sqm – 3 rooms, gyaKorló street

46 sqm – 2 rooms, országbíró street

150 sqm – 7 rooms, garden sUbUrb

In a Bauhaus style building, this sunny and well divided apartment has balcony and it is situated in a quiet, green street.

Next to the Danube, in a new building, this well divided, garden facing apartment has living room with open kitchen, bedroom and terrace. Handover in 2018.

In the pedestrian Váci Street, this duplex office has private gas heating and it is situated within a well maintained period building.

This completely renovated, well divided, street facing apartment benefits of separate rooms and balcony. It is situated within a building with elevator.

This high floor apartment has panoramic view from the 12 sqm of terrace, living room with fully fitted open kitchen and bedroom. It is situated within a new building with parking space.

In a quiet side street, this very bright, two storey family house built on 478 sqm of lot, has two separate entrances, two bathrooms, garage and parking space in the courtyard.

25.900.000 hUF

21.490.000 hUF

42.900.000 hUF

69.000.000 hUF

+36.1.201.0403

27.300.000 hUF

+36.1.430.1403

39.000.000 hUF

+36.70.651.0660

+ 36.70.646.6818

+36.70.455.8062

+36.70.398.8754

5th District

10th District

13th District

90 sqm – 3 rooms, KUrUClesi street

48 sqm – 2 rooms, platán-liget sUbdivision

81 sqm – 2 rooms, Királyi pál street

320 sqm – 8 rooms, lavotta street

31 sqm – 1 room, visegrádi street

152 sqm – 5 rooms, ráKospalota

This completely renovated, very bright apartment has balcony and garage. It is situated within a condominium with nice common garden.

Next to the Danube, in a new built subdivision with playground, this garden facing apartment in good condition benefits of separate rooms.

It is located in a very quiet and green area.

This very bright, street facing apartment, that needs renovation, has separate rooms and private gas heating. It is situated within a well maintained building with elevator.

This well divided, two storey family house in good condition built on 540 sqm of lot, has private gas heating, 2 large balconies and garage.

In a renovated period building, this apartment in good condition has sleeping gallery and private gas heating. It is located close to the beautiful St. István Park.

This well divided, two storey family house in good condition built on 428 sqm of lot, has 2 kitchens, 2 bathrooms, balcony and two car garage.

75.900.000 hUF

37.900.000 hUF

59.900.000 hUF

58.900.000 hUF

21.900.000 hUF

49.990.000 hUF

2nD District

+36.1.376.6080

2nD District

3rD District

+36.70.669.5350

3rD District

+36.70.651.0660

6th District

+ 36.70.646.6818

11th District

+36.70.414.7759

13th District

15th District

+36.70.398.8754

Dunakeszi

122 sqm – 4 rooms + hall, gyergyó str.

180 sqm – 4 rooms, béCsi street

58 sqm – 2 rooms, teréz CirCUit

96 sqm – shop, alíz street

72 sqm – 3 rooms, gogol street

72 sqm – 3 rooms, gyártelep

This very spacious and sunny, street and garden facing apartment benefits of separate rooms and 2 balconies. It is situated within a Bauhaus style building, in a quiet side street.

This two storey family house, that needs renovation, built on 880 sqm of lot, has 10 sqm of terrace and it is located in a green area, next to the forest.

A perfect solution for anybody seeking a renovation project to make 3 rooms, within a very nice period building with elevator, close to the Andrássy Boulevard.

In a new built subdivision this shop in good condition has terrace and air conditioning system. Currently it works as café. All of the furniture is included in the price.

This bright, well divided, street and garden facing apartment in good condition has private gas heating and parking space.

79.000.000 hUF

55.000.000 hUF

This very bright, garden facing apartment, that needs renovation, benefits of separate rooms and balcony. It is situated within a well maintained building with elevator.

31.990.000 hUF

65.000.000 hUF

29.900.000 hUF

+36.1.336.1706

2nD District

+36.1.430.1403

+36.70.414.7759

28.000.000 hUF

+36.70.399.0399

11th District

13th District

121 sqm – 4 rooms, Keve street

84 sqm – 3 rooms, szondi street

94 sqm – 3 rooms, barázda street

51 sqm – 2 rooms, metodrom hoUse

400 sqm – 9 rooms, Centre

Next to the forest, this new, two storey family house built on 5000 sqm of lot, has 77 sqm of terrace, 100 sqm of wellness area, 4 car garage and well kept garden.

This renovated, duplex apartment benefits of a fully fitted kitchen, fireplace, air conditioning system, 2 bathrooms, 2 balconies and terrace.

In a condominium with nice common garden.

This renovated mansard apartment benefits of a living room with fully fitted open kitchen, 2 separate bedrooms, 2 bathrooms and 20 sqm of terrace. In a renovated period building with elevator.

In a new building with elevator, this very spacious, top floor apartment has air conditioning system and panoramic view from the 79 sqm of terrace.

In a new building, this very bright apartment benefits of a living room with fully fitted open kitchen, 14 sqm of terrace and 45 sqm of private garden.

This two storey family house built on 778 sqm of lot, benefits of a fireplace in the living room, alarm system, two car garage and very nice, well kept garden.

259.000.000 hUF

64.900.000 hUF

54.900.000 hUF

78.900.000 hUF

34.900.000 hUF

86.000.000 hUF

36.70.669.5350

6th District

+36.1.720.2433

500 sqm – 6 rooms, gyöngyvér street

+36.1.376.6080

3rD District

+36.70.3156.087

+36.70.3156.087

+36.1.720.2433

+36.70.455.8062

Dunakeszi

+36.70.399.0399

each agency independently owned and operated. • these offers are valid, till the apartments are sold. • these information do not constitute a contractual element. tecnocasa_bbj_2017_11.indd 1

2017. 11. 14. 9:54

12 | 2

Business

www.bbj.hu

Budapest Business Journal | November 17 – November 30, 2017

A Snapshot of the Economy Through the Prism of HR as memorable as possible. If orientation and the whole introductory process is perceived in a positive way, it has the potential to significantly boost employee engagement − a key for long-term emotional attachment.

The Budapest Business Journal polled senior HR executives to get a snapshot of the Hungarian labor market and related issues. The findings paint a fascinating picture.

Prestige

Questions were asked about the prestige of the HR profession in the survey as well. As the statistics show, about half of the respondents believe it has improved

“Many senior human resources professionals would like to be in the board room and have their say. But if their area was really of strategic importance, they would be capable of making executives realize what they are expected to do for the sake of genuine results... As long as this is not the case, though, HR will remain to have a predominantly or solely service function.”

LEVENTE HÖRÖMPÖLI-TÓTH

Market surveys normally target corporate decision makers in the C-suite to gain a general idea about prevailing conditions and trends. The BBJ decided instead to pick the brains of senior HR executives in search of their impressions of the labor market, the level of independence from their foreign parent companies and the prestige of their own profession.

High-ranking specialists working at large corporations in Budapest and the countryside were approached and with yearend around the corner their input might deliver a lesson or two for those employed in other key corporate positions.

Not surprisingly, the gloom over the dire lack of supply on the labor market was widely confirmed as a total of

nearly

84%

of respondents said current conditions have a negative or a very negative impact on their firm.

“This is a truly stunning figure,” commented Csaba Szabó, CEO of training, coaching and consulting company Develor Zrt. “When we started talking about bottlenecks in terms of skilled labor around two years ago, many just shrugged it off, saying it was a problem in the Western regions of Hungary. Since then the phenomenon has swept the entire country.”

Indeed, for ever more Hungarian professionals, the labor market is turning truly global, with remote locations such as Singapore or Shanghai now on the map, among others. “Even more oddly, in 2017 it is a completely realistic scenario that workers from India, Indonesia and Pakistan could soon be imported to work at construction sites and in assembly plants in Hungary,” adds Szabó.

The Emigration Question

Neighboring regions with large Hungarians communities such as Transylvania in Romania, Transcarpathia in Ukraine and Novi Sad in Serbia, can no longer supply enough working hands, since people from there prefer to go further West. On the other hand, whole crews from various CEE countries operate in Western Europe on a permanent basis, another indication that cross-border supply-demand rules prevail in the European labor game.

Csaba Szabó, CEO Develor.

The BBJ survey underlines the impact of emigration as well: some 55% of respondents said that it concerns them either to an average or substantial extent.

Another related hot topic, wage pressure was also addressed in the poll, and only some 20% of the surveyed HR execs agreed with the statement that the matter doesn’t concern them.

Interestingly, in spite of all those bumps in the road,

some

77%

of the firms polled have plans to expand their work force in the next one or two years.

This figure sounds particularly ambitious in light of the already record low unemployment rate, which was at 4.1% in September, according to data published by KSH, the Hungarian Central Statistical Office.

“Everybody is eager to grow, but they keep hitting barriers,” notes Szabó, who believes that a healthy competition has been evolving where wages are only part of the equation. “Employer branding is gaining in importance, but that has many components.” Workers simply move on if they get disillusioned or believe

“What used to be cool to show off with, like having foosball tables at the workplace, is losing its appeal. Factors such as career development training and professional improvement outshine facility-related assets by far.”

in the past three years, but it still lacks an adequate level of credit. At the same time, nearly the same ratio of respondents described their area of expertise as strategic. According to Szabó, the latter is more likely wishful thinking.

“Many senior human resources professionals would like to be in the board room and have their say. But if their area was really of strategic importance, they would be capable of making executives realize what they are expected to do for the sake of genuine results such as employee retention and improving employee engagement. As long as this is not the case, though, HR will remain to have a predominantly or solely service function.”

It was also interesting to find out more about the level of independence the polled firms have from their foreign parent companies. Some 80% said they have partial autonomy in general and just 16% said autonomy was subject to no restrictions. More than half of them, in turn, had no discretion over wage issues, whereas free choice seems to be biggest in terms of training,

with

they were fooled in a job interview and find reality doesn’t live up to their expectations.

“What used to be cool to show off with, like having foosball tables at the workplace, is losing its appeal,” adds the expert. “Factors such as career development training and professional improvement outshine facility-related assets by far.”

Therefore, as Szabó explains, the key is to work on the so-called employee journey design and make its initial stage

90%

of respondents claiming they have a free hand regarding such decisions.

“The overall moral of the story is simple,” Szabó concludes. “The economy can no longer continue to focus on lowadded value processes. An ultimate shift is needed towards less labor-intensive production using cutting-edge technology and towards offering jobs creating high added value and attracting R&D activities.

Shared service centers and IT services can play a crucial role in this process.”

Business | 13

2

www.bbj.hu

Budapest Business Journal | November 17 – November 30, 2017

The Hungarian Labor Market: the HR Company View 4 2

1

How would you describe the impact 1 of the current labor market situation1on your company?

1

Very negative 1Negative 1Not affected Positive 2% Very 7% 14% Positive 2% 2% 7% 7% 14% 14% 7% 2% 14% 7% 7%7% 2% 7%7% 14% 2% 7% 14% 7%

1

7%

2

6

6

1

5

31% 4

2

7%

39%

How much is the current labor market situation affecting your company? Putting pressure on our employees.

3

5

34% 4

20%

23%

3

On a one to five scale where 1 = it does not affect us at all and 5 = it very much influences us.

5 2%

11

36%

8

What is the primary role of HR in your company?

49%

9

9 5%

8 8

59% 59% 59%

59% 59%

36%

36%

36%

Provider 8 Administration 8 Strategic Other

20%

13%

20%

2% 2% 6Hungarian Foreign Mixed

5% 5% 5%full We have 6autonomy We have partial autonomy We can 5%decide on 36% very few 5% issues 36% on their own 5%

30% 3

23%

2

20% 20%

82%

6

8

7%

They have not changed Increased Increased 7 significantly

6

6

5% 32%

32%

32% 32%

46%

5% 13%

36%

16%

Has not changed and is acknowledged 1 Has still not 2%sufficiently acknowledged 1 7% changed 14% not but 2% is properly recognized 7% and is14% 7% Has got worse badly acknowledged 2% 7% 14% 7% 2% 7% 14% 7% 7% 2% 7% 14%

70%

2%5%

59% 48%36% 36% 59% 2% 59%

46% 46% 2% 2%2% 46% Improved but still not sufficiently 46% 1 2% Improved and properly acknowledged 1 1

6

In what direction do you think the expectations of the HR profession have changed in the last 2-3 years?

36%

20%

32%

36%

1

4

59%

4%

Recruitment Training and skills development yourself? 8 820% Wages Other 10 20% 32% 32% 4% 16% 20% 20% Is your 32% 32%company 2%ownership, 2% Hungarian, foreign or mixed?

22%

5%

11%

Where 8 can 8 you not decide

5

23%

On a one to five scale where 1 = it does not affect us at all and 5 = it 6 very much influences us.

11

How do6you decide on key issues?

How 6 much are these topics decided upon by your international center?

4

How does the current labor market situation affect your company? Qualified workers migrate abroad.

5

48%

32% 23%

How much is the current labor market situation affecting your company? Leadership replenishment is difficult.

36%

6

4

2

29%

10

1

21%

On a one to five scale where 1 = it does not affect us at all and 5 = it very much influences us.

46% 46% 80% 6 46% 46%

27%

2%

5%

59% 59% 59%

1

3

How much is the current labor market situation affecting your company?

There are few skilled workers.

12

36% 36%

13%

2

Is workforce expansion planned for the next 1-2 years?

23%

5

3

Yes, in significant quantities Yes, 6 but minimal No 5% 5%

5%

On a one to five scale where 1 = it does not affect us at all and 5 = it very much influences us.

70% 70% 70% 70% 70%

70%

12

3

7%

16%

21%

7

How has the general perception of the HR profession changed over the last 3 years?

14 | 2

Business

www.bbj.hu

Budapest Business Journal | November 17 – November 30, 2017

Best Digital Financial Education Ideas Sought A grant program aims to reward those who come up with the most attractive digital solutions to solidify the financial knowledge of young generations. And you don’t even need to be computer geek to be eligible for the prizes.

LEVENTE HÖRÖMPÖLI-TÓTH

On offer is a total of HUF 38 million, with the first prize set at HUF 15 mln. The money is being put up by the OTP Fáy András Foundation, which aims to promote ideas that raise financial awareness among the target group aged 12-22.

The foundation has been working for 25 years to improve financial and economic skills of the younger generations. Its track record has seen it pick up domestic and international recognition, an ever-growing

Thanks to funding from OTP Bank and the Ministry of Human Resources, ideas are now welcome from anybody who can put together a proposal serving the above-mentioned goal. The only restriction is an age barrier; only those

over

14-years-old

may apply. But that relatively low age bar also means that IT skills are not required to be eligible for the prizes. Nor is it relevant whether the applicant can implement the idea themselves.

Gamification

“Today it is no longer enough to reach out to young people in an offline environment and only via classic educational activities; that is why we would like to move in the direction of gamification, innovation and Csányi Péter the internet in the field of financial education,” says Péter Csányi, managing director of OTP Bank Nyrt.’s partner network, and more than Directorate for Digital Sales and 100,000 financially prepared young people.

Development, and who also heads the Its education concept is a one-of-apanel judging the applications. kind method that is taught at schools “We are aware that many applications, and in training hubs in Budapest and games and software exist, but we also Nyíregyháza, a city 230 km northeast of know that the best one hasn’t been made Budapest. The plan is to supplement the yet.” Hopefully this will happen soon, concept with a digital program so that he said, adding that the work of OTP young people get the chance to become Fáy András Foundation has always been financially responsible adults in a playful, determined by a novel way of thinking innovative and creative way. and a child-centric approach.

Péter Schrankó, managing director of the foundation, noted: “Our aim is to find solutions that truly support and improve the lives of people in the age group 12-22.

Applicants have been granted total liberty on purpose; all we ask is that the idea presented should be digitally executable, innovative and exciting, and it should concern the improvement of financial culture in some way.”

A four-member jury will pick the best candidate, who will scoop up prize money of HUF 15 mln. The remaining HUF 23 mln will be distributed among those whose concept makes it through to the so-called “Mentor Program”. The deadline to file applications is January 15, 2018.

Schrankó Péter

PROMOTION

Mother-to-be Projects and Child Camps = Family-friendly Companies “Am I going to get my job back after the birth of my baby?”

“Who is going to take care of the children when they’re sick and I have to work?” “How can I get to the kindergarten, or to the school when the kids are done?” “What are they going to do in the summer if I can’t take leave?”

These are tough questions that are often raised in the mind of someone who has a family, and they show exactly that balancing work and personal life isn’t an easy task.

The conflict between the two roles is one of the biggest obstacles for young people having as many children as they wish. The Three Princess, Three Princesses Movement – which aims to help longed-for babies have a chance to be born – fights to change this negative trend. Therefore, the movement handed over the Familyfriendly Company Awards and Familyfriendly Company titles for the fifth time in 2017. The recognition was awarded at the gala held on November 14 in Budapest Music Center to companies who can give real answers to these questions.

The awarded companies, through their actions, facilitate not only the lives of

their employees but also strengthen the family-friendly approach of the whole society. Their creative, baby-encouraging steps are examples for other enterprises as well. But who – and with what ingenious steps – deserved the Familyfriendly Company Award and Familyfriendly Company title in 2017!

The professional jury awarded the prize in three categories: large – medium – and small-sized companies.

In 2017, Celanese became the “Familyfriendly Company of the Year” in the large-sized company category. The company became ten years old this year, and the fresh-starters who were there at the beginning with them have become parents by now. The management adapted to the new situation. The pregnant employee gets all necessary information and help during the nine months, and also before and

The company realized that vacation was as much fun for the children as it was a huge problem for parents. It is hard to solve that the little ones are always occupied while the adults are working.

The company offers eight thematic camps for this problem, and not just simple ones. On hearing about robotics, horse or science camps, the eyes of the adults can also light up.

In addition to these awards, the movement handed also over a special prize. Morgan Stanley received the award for its Return to Work program. The 12-week long, paid program gives returnees who have been absent for a longer period a chance to get used to work again.

Many of the applicants also earned the during returning to work. Employees right to call themselves a “Family-friendly are supported in the office with fruits, Company” in 2017. BDO, BPO, British vitamins, and motivational performances Petrol, Budapest Bank, Citi Bank, Diageo, to be able to stay strong in their body and Egis, Gallus and HR Partner Consulting all soul, not only at work but at home as well. received the title, but with their varied, MetLife also puts great emphasis on family-supporting programs the jury the support of mothers-to-be. With its was also convinced by Lechner, MAVIR, complex program for mothers-to-be, National Instruments, Profigram, Prolan, the company has earned the “FamilyRICOH, Salva Vita Foundation, SHS, Szent friendly Company of the Year Award” as Kristóf Szakrendelő, and SZ+C Stúdió. a medium-sized company. Among all A kindergarten owned and run next the family-friendly steps of MetLife, it is to the office, a home-visiting farmers worth highlighting its Buddy program, in market, home offices, extra days-off, which employees returning to work get a children’s day at the office, support for supportive co-worker next to them. This children in need, student work programs, helps the returnee reintegrate and to and childcare packages; the list of steps find a way to reconcile the two roles. that made this year’s applicants “FamilyPC Trade Systems, the third winner of friendly Companies” goes on. These the “Family-friendly Company of the colorful, creative, useful and niche steps Year Award”, has confuted the misbelief show that more can be – and should be that truly helpful family-friendly steps –done to ensure that family and work can only be made by large companies. aren’t enemies here in Hungary.

3

www.bbj.hu

Budapest Business Journal | November 17 – November 30, 2017

Special Report Insurance

A look at some of the trends shaping the insurance industry in Hungary in 2017.

Hungary’s SMEs Remain Largely Uninsured 16 More Transparency Leads to More Regulation17 Health Policies on the Rise From Very low Base18 Insurance Company Listing (Ranked by Gross Premium Income) 19

Special Report

16 | 3

www.bbj.hu

Budapest Business Journal | November 17 – November 30, 2017

Hungary’s SMEs Remain Largely Uninsured Most Hungarian companies seem to put price ahead of other aspects when it comes to insurance. While some global trends are apparently reaching the Carpathian Basin, the lack of foresight among local SMEs still leaves a lot of room for the Hungarian corporate insurance sector. ÁGNES VINKOVITS

Just as with several other business areas where the country reacts to intercontinental trends with some leeway, Hungary has its local specialties regarding corporate insurance, too.

On a global scale, business disruption is still what companies fear the most and, as a relatively new trend, businesses pay increasing attention to the risk of nonphysical damage, data from the Allianz Risk Barometer 2017 shows.

By the same token, an unpredictable business environment is considered to be a growing risk throughout the world; a danger not only fed by market volatility, but also fueled by political risks such as strengthening protectionism or increasing terrorist threats, the survey concluded. Cyber risks, whether caused by a technical breakdown or human failure, are considered the third biggest threat for businesses on a global level.

In Hungary, however, this is the first year in which digitalization issues appear among the top ten, debuting as the

5th

biggest risk.

Still, there has been some other significant realignment in the country, too.

While a couple of years ago force majeure and a break in the supply chain were among the most feared events, nowadays they are not even mentioned among the biggest menaces. At the same time, the unpredictable legal environment, which previously was seen only at the end of the list, is now the leading risk and is followed by market insecurity and uncertainty about macro-economic developments.

Environmental Risks

Nonetheless, environmental risks are still taken seriously both globally and locally, perceived as a threat that is already causing

an increasing amount of damage, but which is expected to show its full strength only in the future due to global warming.

This is encouraging insurance companies to be proactive in finding solutions in advance, market players report. It also makes cooperation with clients even more essential, although in truth this fits into the reforming marketing strategy of the sector anyway: the emphasis is relocating from a practice of “push” marketing to “pull”.

This means that convincing clients about what they need is slowly being replaced by insurance providers finding out the current demands of the companies and offering ultra-customized solutions, while also keeping close contact to be able to react quickly to any instant need in the future.

This is the only way of providing really valuable solutions, sector players argue.

With human interactions to the fore – staying in touch and giving personal support is vital – online solutions are rare in the corporate insurance sector and mostly appear only in administrative tasks, corporate insurance providers told the Budapest Business Journal. The only exceptions to this are micro businesses, which more or less act like the household market.

While Hungarian companies tend to go for

100% coverage

when it comes to property insurance, for liability insurance they usually set

very low limits, even when dangerous activities are involved.

The number of liability insurance policies has been on the rise recently, but market players argue that the reason behind this tendency is the increasing number of business activities that are obliged by law to be backed up by insurance, rather than any growing sense of responsibility among Hungarian businesses.

Meanwhile, the insurance sector reports that fulfilling these legal requirements often poses a huge administrative burden on them. “The purpose of most regulations is fair, yet the effects are often counter productive,” Edit Dervenka head of PR at Aegon tells the BBJ.

Least Insured

According to a survey by UNION Insurance, SMEs are the least insured in the Hungarian corporate sector. Almost one-quarter of the

country’s

1.15 million

micro-, small- and medium-sized enterprises had no insurance at all in 2016, even though “they are the most vulnerable in the case of an unexpected incident”, Gabriella Almássy, head of non-life insurance segment at UNION argues.

To give an example, contrary to the global trends, only 4% of the property insurance in the Hungarian

corporate sector covers business disruption. That might well represent unwarranted optimism given the fact

“The purpose of most regulations is fair, yet the effects are often counter productive.” that, for instance, an incident making a restaurant suspend its services for one or two months while still paying salaries and other fixed expenditures could easily mean the end of the business. However, a well-structured insurance would refund not only the unexpected costs of the incident but also the profit lost.

“Hungarian companies are anything but provident,” Dervenka says, adding that they usually have a follower’s mentality and often act only at the very last moment.

They also tend to spend smaller amounts of money on insurance than their peers in Western Europe.

However, changes could well come with time (and market experience). Insurance fees have been dropping for a decade already, although that pace is now slowing down somewhat. Still, Almássy estimates that if the price tendency carries on and is combined with the ongoing economic growth, the proportion of non-insured SMEs might decrease to one-fifth by the end of the decade.

www.bbj.hu

3

Budapest Business Journal | November 17 – November 30, 2017

Special Report | 17

More Transparency Leads to More Regulation Tax deductibility and the uncertainties surrounding future pension schemes have given a boost to life insurance in Hungary.

SONJA BENCZE

As people feel more insecure about their future and pension, self-provision is being given ever more emphasis. In the insurance market, this makes for a growing number of life and retirement plans.

According to information from the Association of the Hungarian Insurance Companies (MABISZ), the life insurance market saw a 2%-rise last year. The fairly low rate of growth is attributed to the structural changes taking place in the market: emphasis is shifting towards continuous coverage policies.

At the end of 2016, life insurance

made up

49.5%

of the entire insurance market, according to the data of UNION Biztosító. Within life insurance, retirement plans have increased by more than 50%, both in traditional mixed and unit-linked-type policies. These represented 10% of overall life insurance revenues in 2016. All of the above reflect the positive impact of the tax credit introduced in January 2014 that, in line with expectations, has managed to boost long-term savings, MABISZ said.

For insurance companies, the past year was about adjusting to changing regulations. They have had to adapt to harmonized EU legislation that covers, among other things, a detailed product description. They have also had to follow the rules of the so-called ethical life insurance concept set by the National Bank of Hungary (MNB).

Significant Impact

This latter has had a significant impact on the structure and number of products. According to a study on the effects of the regulation, the number of new acquisitions have dropped by approximately 11% from Q2/2016 to Q2/2017. Yet this decrease was countered by the increase of average fees by roughly the same percentage, MABISZ data shows.

The concept is to provide a more transparent and detailed product description and consultation. In practice, this means that clients need to be informed about any hidden costs. MNB also expects insurance companies to

conduct demand assessment (have the client fill out a form) prior to taking a life insurance policy. The guidelines also promote better comparability between products, which they can see by looking at total cost indicators (TKM).

A more transparent market benefits insurance companies as well, MNB said, since the periods over which clients can keep life and retirement policies will expand. According to data from the central bank, people currently keep their policies for an average of 6.4 years.

Should this extend to 9.7 years, the revenues from fees could multiply by 1.5, MABISZ calculates.

In line with the market and legislative environment, the main focus of Aegon was on retirement plans. With its 8.6% share of the life insurance market (on a revenue basis), the company was the fifth largest player in Hungary in 2016.

Aegon collected around HUF 39 million in this segment in the past three years.

The majority (44%) of those taking out a life insurance policy are

aged

40-50

or over 50 (38%), the Budapest Business Journal learnt from Aegon. Because of the shortness of the term, they are the ones who pay the highest contribution, more than HUF 15,000/month on average. Those aged below 30 constitute

2.5% of Aegon’s retirement plan clientele, while people aged 30-40 represent 15.5% of the portfolio. For them, average monthly contributions are around HUF 13,000-14,000.

“Life insurance for me is not about an investment, rather it is about taking care of my loved ones should something happen to me.”

As is the practice at many insurance companies, Aegon calculates the monthly fee after a consultation based on individual needs. Should it be a small amount, it can still help maintain a standard of living, the company told the BBJ. It is the possibility of tax credit that many find attractive, which is often considered as a supplement to yield in the current low-interest environment.

Savings can be achieved even with low interest rates, thanks to new legislation, Aegon claims.

Financial Stability First

However, life policies should not necessarily be looked on as an investment; financial stability should always come first, the company experts warn. That is, in the current economic environment, even if the yields offered

by Aegon are stable, the focus group are

those seeking a secure investment, rather than extreme or very high interest rates, the company noted.

Many people agree. “Life insurance for me is not about an investment, rather it is about taking care of my loved ones should something happen to me,” Judit Tóth, a freelance accountant told the BBJ. Tóth says she has several life policies with a number of beneficiaries. She also had a number of mixed products, in which accumulated cash reserves could be used freely at the end of the term and which contained risk coverage as well. But she found other types of saving were a better investment.

“Due to the risk element, I received less money back than I had paid altogether.

Therefore, I no longer take out such policies”, she said.

Still, many find it useful to combine different types of life policies and to use the money to fend off inadvertent events and also have some savings. Sometimes, a life policy is a requirement for a mortgage from a bank, with the bank being the beneficiary.

Policies taken out by employers can be exempt from tax up to a limit set in the personal income tax legislation. The insurance fee can be written down as part of the expenses of the enterprise. If the insurance also covers employees’ relatives (who are not employed by the entity), their fees will not decrease the tax base of the employer.

18 | 3

Special Report

www.bbj.hu

Budapest Business Journal | November 17 – November 30, 2017

Health Policies on the Rise From Very low Base The health insurance segment has been on the rise in Hungary, but the penetration of such policies is nowhere near that of life insurance. Most people get coverage from their employer; individuals prefer to pay for private health care.

SONJA BENCZE

With waiting lists getting longer and the quality of healthcare covered by social security being challenged, the number of people attending private healthcare facilities is growing. The growing popularity of private healthcare, however, has not translated into more health insurance.

The number of individual health plans, which are not part of another policy, for example, life insurance, is very low in Hungary, compared to the penetration of such policies in Western Europe, according to data from the National Bank of Hungary.

One reason is that the Hungarian insurance market is less developed than its Western peers. It also has to do with the countries’ social security systems. “In Austria, social security coverage is reduced to basic life support if a person suffers an accident outside work. All the related treatment, rehabilitation, etc. must be covered by individual plans,” insurance expert Anita Hegymegi told the Budapest Business Journal. In Hungary, the system does not differentiate as to where or why an accident happened – it covers the treatment, she added.

Health insurance is the newest segment in Hungary. The development of the insurance market always begins with property insurance, followed by life insurance, Viktor Maják, head of PR at Union Biztosító told the BBJ. Health insurance is usually the third wave, and the Hungarian market is just at beginning of this phase. This segment will see a significant growth in the future, he said.

Twin Categories

Health insurance can be divided into two main categories. Fixed amount insurance (összegbiztosítás) pays a certain, previously set amount when an insurance event (accident, disease, etc.) occurs. It can cover the costs related to hospitalization such as an operation, daily hospital care fees, and the healthcare necessary for recovery.

Health insurance is the newest segment in Hungary.

The development of the insurance market always begins with property insurance, followed by life insurance.

Health insurance is usually the third wave, and the Hungarian market is just at beginning of this phase.

This segment will see a significant growth in the future.

number of plans offering further assistance such as a second opinion, a medical call center or the arrangements of certain tests is also on the rise.

Although attendance at private healthcare institutions is on the rise, most people still seem to prefer to meet the related costs out of pocket rather than take out an insurance policy. Healthcare plans are seen as affordable for people with an average-level income, but most of these policies are taken as a group, usually by a multinational employer.

Group policies are a dynamically growing type; however, they will bring about a drop in individual health insurance, Hegymegi noted. “It is precisely this circle, people working for multinational firms, that could afford to pay a healthcare plan. Yet this way they get covered at a more favorable rate or don’t even have to pay at all – when the insurance is paid by the employer as part of a benefit scheme,” he said.

Care vs. Prevention

The other type of policy provides coverage for services to maintain health. It includes outpatient medical care, screening tests, diagnostic imaging, one-day surgery, and also costs of hospitalization. Some companies now offer cover for critical illnesses such as cancer. These pay for the costs of the care and treatment, for recuperation aids and also replace any lost income due to a decreasing ability to earn or even a fund for a change in lifestyle.

There are also a few that will allow healthcare and treatment/operations to take place in foreign institutions. The

As for individuals, it is those

aged

35-60

who are most interested in health policies. A growing proportion of the older generation uses healthcare services at private facilities. The young are more focused on prevention and screenings.

Beyond education, healthcare reform would be necessary in the long run to define and clarify the role of private insurers, Union Biztosító told the BBJ. Companies usually take out health insurance for a year and renew them at the end of the year when the next year’s taxing policy is known.

Unfortunately, few detailed statistics are available for medical insurance – the experts can only experts estimate the proportion of different types of plans.

How many people/policies a group scheme includes does not show up in statistics either, which is another reason for the low rate of health insurance in Hungary.

The MNB does not have a dedicated line for different types of health care policies, so the experts can only estimate the rate of each, Hegymegi explained.

MNB statistics do not include Medicover data either, which represents a large proportion of the Hungarian health insurance market. (Medicover is a crossborder institute with a subsidiary in Hungary therefore it is not included in Hungarian data).

For insurance to become more widespread in Hungary, the insurance association MABISZ says it would be useful to increase the rate of coverage in life, accident and health insurance so that they can provide real support in the event of death, accident or disease. It takes around three years for a family’s finances to recover after the death of a member, which means a risk premium equivalent of, or higher than, the three-year income of the insured person should be selected, the organization said.

www.bbj.hu

3

Budapest Business Journal | November 17 – November 30, 2017

Special Report | 19

Insurance companies [1] Ranked by gross premium income RaNk

bReakdoWN oF GRoss amouNt oF Claims paid iN 2016 (HuF mlN) GRoss pRemium iNCome iN 2016 (HuF mlN)

CompaNy Website

liFe

NoN-liFe

total

13.69

– Generali CEE Holding B.V. (100)

Mihály Erdős Gergely Horváth –

1066 Budapest, Teréz körút 42–44.

(1) 301-7100 (1) 452-3505 generali@generali.hu

10.37

– Groupama S.A. (100)

bertrand Woirhaye Mihály Bácsfalvi István Csonka

1145 Budapest, Erzsébet királyné útja 1/C (1) 467-3500 (1) 361-0091 info@ groupamagarancia.hu

10,888

10.35

– AEGON Hungary Holding B.V. (50), AEGON Hungary Holding II B.V. (50)

péter zatykó Gyula Horváth –

1091 Budapest, Üllői út 1.

(1) 477-4800 (1) 476-5710 ugyfelszolgalat@aegon.hu

71,229

1,390

8.53

– NN Continental Europe Holdings B.V. (100)

imre sztanó Csilla Varga Szalainé –

1068 Budapest, Dózsa György út 84/B (40) 464-464 (1) 267-9093 nn@nn.hu

4,381

52,663

1,398

7.67

Magyar Posta Zrt. (33.07) Talanx International AG (66.93)

anett pandurics Ferenc Pap Péter Mester

1022 Budapest, Bég utca 3–5.

(1) 423-4200 (1) 423-4210 info@mpb.hu

9,169

26,619

224

6.36

– Uniqa International Beteiligungs- Verwaltungs GmbH (99.93), UNIQA International AG (0.07)

krisztián kurtisz Thomas Dockal –

1134 Budapest, Róbert Károly körút 70-74.

(1) 238-6000 (1) 238-6060 info@uniqa.hu

4.93

– KBC Insurance N.V. (100)

Nik vincke – –

1851 Budapest, Lechner Ödön fasor 9.

(1) 461-5200 (1) 461-5276 biztosito@kh.hu

3.94

– Vienna Insurance Group Wiener Städtische Versicherung AG (100)

Gábor lehel Anett Vadas-Földvári Viktor Maják

1082 Budapest, Baross utca 1.

(1) 486-4200 (1) 486-4390 info@unionbiztosito.hu

anna Czakóné kovács Balázs Király –

1211 Budapest, Szállító utca 4.

(1) 666-6200 (1) 666-6404 –

3

GRoupama iNsuRaNCe zRt.

4

aeGoN maGyaRoRszáG általáNos biztosító zRt.

95,279

34,004

23,939

57,943

5

NN biztosító zRt.

78,493

71,229

–

70,573

48,282

58,572

17,450

6

www.groupama.hu

www.aegon.hu

www.nn.hu

maGyaR posta biztosító / maGyaR posta Életbiztosító zRt.

125,993

95,488

29,344

37,781

addRess pHoNe Fax email

péter kisbenedek Ildikó Láng –

2

www.generali.hu

top loCal exeCutive CFo maRketiNG diReCtoR

– Allianz New Europe Holding GmbH (100)

GeNeRali biztosító zRt.

27,543

oWNeRsHip (%) HuNGaRiaN NoN-HuNGaRiaN

14.18

alliaNz HuNGáRia biztosító zRt.

130,517

maRket sHaRe iN 2016 (%)

1368 Budapest, Könyves Kálmán körút 48-52.

(1) 421-1421 (1) 301-6100 ugyfelszolgalat@ allianz.hu

1

www.allianz.hu

pRe-tax pRoFit iN 2016 (HuF mlN)

41,807

17,631

24,631

69,350

46,975

62,412

14,121

9,976

5,182

www.postabiztosito.hu

7

uNiqa biztosító zRt.

8

k&H biztosító zRt.

9

uNioN vieNNa iNsuRaNCe GRoup biztosító zRt.

10

WábeReR HuNGáRia biztosító zRt.

21,188

-

9,025

9,025

3,627

2.30

W-NEW Holding Kft. (58), VKH Vagyonkezelő Kft. (42) –

11

siGNal biztosító zRt.

20,627

8,423

4,700

13,123

403

2.24

– Signal IDUNA Allgemeine Versicherung AG (100)

tamás kálózdi Dénes Csata –

1123 Budapest, Alkotás utca 50.

(40) 405-405 (1) 458-4260 info@signal.hu

12

eRste vieNNa iNsuRaNCe GRoup biztosító zRt.

18,242

13,168

–

13,168

655

1.98

UNION Vienna Insurance Group Biztosító Zrt. (5), Erste Bank Hungary Zrt. (5) Vienna Insurance Group (90)

zsolt Raveczky – Viktor Maják

1082 Budapest, Baross utca 1.

(1) 484-1700 (1) 484-1799 info@erstebiztosito.hu

13

vieNNa liFe biztosító zRt.

15,263

8,095

915

9,010

394

1.66

– Vienna Insurance Group AG Wiener Versicherung Gruppe (100)

anett vadas-Földvári – Csaba Bunghardt

1138 Budapest, Váci út 135–139.

(1) 888-2888 (1) 413-5101 info@viennalife.hu

14

CiG paNNóNia Életbiztosító NyRt.

1.47

Individuals (54), legal entities (41), other (5) –

Gabriella kádár Miklós Barta –

1033 Budapest, Flórián tér 1.

(1) 244-5858 (1) 247-2021 info@cig.eu

15

GRaWe Életbiztosító zRt.

1.21

– Grazer Wechselseitige Versicherung AG (100)

andras Hochmann – –

7632 Pécs, Kastély utca 2.

(1) 202-1211 (1) 355-5530 info@grawe.hu

www.uniqa.hu

www.kh.hu/biztositas

www.unionbiztosito.hu

www.wabererbiztosito.hu

www.signal.hu

www.erstebiztosito.hu

www.viennalife.hu

www.cigpannonia.hu

www.grawe.hu

Ÿ= would not disclose, NR = not ranked, NA = not applicable

45,412

36,264

13,535

11,153

10,172

7,126

7,906

3,735

15,955

7,058

–

–

26,127

14,184

7,906

3,735

3,587

381

1,094

2,271

This list was compiled from responses to questionnaires received by November 15, 2017 and publicly available data. Data is based on companies’ own data revelations. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

Notes: (1) Data from the database of Hungarian Financial Supervisory Authority-National Bank of Hungary.

GLOBÁLIS JELENLÉT, HELYI ELKÖTELEZETTSÉG

A sikeres cégvezeto ˝k folyamatosan keresik a leheto ˝ségeket vállalatuk továbbfejlesztésére. Vállalati kapcsolattartóink segítik Önöket a helyi kihívások megoldásában, és emellett hozzáférést biztosítanak a Citi páratlan globális hálózatához. Ily módon nyújtunk széles köru ˝ banki szolgáltatásokat a magyarországi vállalatoknak. A Citi több mint 200 éves tapasztalatára építve válaszolunk ügyfeleink változatos igényeire. Kiváló szakembereink, személyre szabott megoldásokkal támogatják Önöket üzleti céljaik elérésében, függetlenül attól, hogy ügyfeleik Magyarországon, Közép-Európában vagy a világ bármely más táján találhatók. www.citibank.hu

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Malian Musical Magic on the Banks of the Danube David Holzer interviews the remarkable Malian singer and guitarist Rokia Traoré, who played at Müpa Budapest, the city’s glittering palace of culture by Rákóczi bridge on the Pest embankment, on November 15.

DAVID HOLZER

Although Rokia Traoré’s roots are anchored in Malian Mandingo culture, she spent much of her childhood outside Mali because her father was a diplomat. The result is that her French and English are both excellent and she has much more of an international worldview than I had initially thought, given the strength of her Malian identity.

Traoré’s childhood travels also gave her an open-minded attitude to music, which Rokia Traoré. comes through in her work. She has said that blues, jazz and rock and roll were more accessible to her than traditional Malian music. Being culturally distant from the facility for the contemporary arts – music, music of her country also meant she “had literature, performing arts, visual arts and to take a great creative detour to gain a photography. few years of experience in the practice of In the song “Beautiful Africa” you a musical style that I invented for myself.… describe yourself as an “Afro-Progressive”. my goal was and still is, to expand the What does that mean to you? scope of freedom for my artistic work.”

For me, it’s the fact of deciding to see Before the performance, I interviewed Africa differently from how it’s been taught to Traoré by telephone at her home in Mali. us as Africans. Africa was a continent made She was friendly and open but clearly selfby the colonizers. Even what Africans know possessed and a determined, deep thinker. about themselves is often very different from what the real continent is. But it’s difficult Have you played in Budapest or Hungary to show Africa the way it truly is, free from before? images of colonization and, even before that, Once, eight or ten years ago. It was a slavery. We need to understand that what great experience performing somewhere I we’ve been taught we are is not who we really only knew through reading books and the are before we can properly explain ourselves media. The audience was good. They were to the world. We have to be those who teach, very focused and interested in what I was who show Africa and the rest of the world doing on stage. how we’d like to be seen.

You’ll be performing “Dream Mandé What music do you listen to?

Bamanan Djourou”. Could you tell me a I listen to everything. But I have to say little about this? that, for me, the most interesting things I’ll be performing with five musicians and happened in the 1950s and ’60s and, since a choir of six. The show is based on covers then, we’ve just been repeating what has of traditional Malian Bambara songs and been done before. adaptations of classic French chanson by Why did you record Billy Holiday’s writers like Jacques Brel and Léo Ferré. All harrowing but beautiful “Strange Fruit” the profit from my performances on this on your last album, “Né So”? tour will go to my foundation, the Espace Classical jazz, blues and rock and roll are Culturel Passerelle in Bamako, the capital all naturally connected to Africa. It’s very of Mali. This is an arts center and training easy for me to feel close to a singer like

Billie Holiday. What “Strange Fruit” says is about me, African and Afro-Americans.

Yes, the song is sad but it’s the truth. It happened, to people who had common roots with me. It’s part of my common history and so painfully connected to us that it doesn’t make sense trying to forget it. Especially with all the problems we ADVERTISEMENT

still have in Africa and America that are rooted in slavery and colonization. But, as a singer, my first interest is in the technical difficulties of covering Billie Holiday.

It seems to me that you’re on a mission to try and help create universal understanding through your music. Are they both equally important to you?

I definitely am an artist. I love imagining and creating. I can’t be anything else. It’s the way I feel the world and think about my place in my environment. But, of course, because I think so much about so many things in the past, present and future, this makes me and other artists conscious of our humanity. More than anything else, I want to show, without any pretension, that there are several truths to life. But I also have to create opportunities and businesses. Maybe that might make me what you call an ambassador, but that’s not what I really want to be.

African music, from so many African countries, is loved all over Europe. What part do you think African music can play in changing perceptions of the continent in Europe?

European interest in African culture 25 to 30 years ago was a great first step. But now those of us who’ve been able to have an important career in Europe have to take advantage of the awareness of who we are and the money we’ve made. We need to use our experience to support culture and the arts inside Africa and our money to support other artists and create spaces for culture and arts to develop before we go out to the rest of the world. It’s a major part of how we arrive at the new Africa, the Africa we Africans would like the continent to be.

Once we’ve done this, we’ll be able to spread what we think is the truth about Africa.

If you haven’t already been, Müpa is well worth a visit, and features a very wide range of performers and styles.

Find out more at www.mupa.hu.

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Photos by Furmint Photo

South Balaton Producers Hail Stellar Vintage Producers from South Balaton were out in force in the capital on November 6 debuting wines from the 2017 vintage and the results were highly encouraging.

ROB SMYTH

“The harvest completed a beautiful year in the South Balaton wine region and we are all truly satisfied with the results,” said Ferenc Bujdosó, president of the Balatonboglár Winegrowers’ Association, and winemaker at the eponymous Bujdosó Winery. He added that all that was needed was a little bit of care and labor to have good wines bottled from 2017.

“It was a great vintage for 13 of our 15 grape varieties; minimal spraying was needed thanks to the dry conditions,” proclaimed Péter Baranyai, chief

Winemakers on the southern banks of Lake Balaton are hailing a vintage crop of wines for 2017. winemaker at Garamvári Szőlőbirtok.

The two grape varieties that struggled were Kadarka and Cabernet Sauvignon, he said.

Thanks to the early ripening, the wines are expressive, full bodied and taste great, according to József Pócz, winemaker of the Pócz Winery. “Lake Balaton helps to moderate weather extremes in our wine

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region, so we didn’t have to worry about losing acidity,” he said.

“Everything needed to be harvested at the same time; I will have to boost my cooling technology in the future,” remarked László Veszprémi from Veszprémi Pince. He added that the winter that preceded an otherwise very strong vintage was problematic and had a negative impact on yields.

“Little rain or snow fell in the winter for the vines to draw on much-needed water reserves in the dry summer, while the grapes didn’t like the cold,” Veszprémi said. On the flip side, neither did the pests that the cold killed off, leading to fewer problems later. Veszprémi saw a 20% reduction in his average yields, while 2016 was 20% up on average.

Many of the wines on offer were from the early-ripening Irsai Olivér, a grape which is often dismissed out of hand by wine snobs. In fact, I recall the look of disdain on the sommelier’s face asking for an Irsai at a certain noted Budapest wine bar on behalf of interested American tasters. This crossing of Csabagyöngye and Pozsonyi fehér, created by Pál Kocsis in 1930, is a vibrantly aromatic grape that appeals to many consumers with its floral, fruity, muscaty nose.

Fragrant, Fruity and Fresh

A színdarab ősbemutatója az angliai Chichester Festival Theatre-ben volt 1999. októberében.

A színdarab Magyarországon a The Agency (London) Ltd. és a THEATRUM MUNDI Színházi és Irodalmi Ügynökség között létrejött szerződés alapján kerül színre.

Irsai can reveal it all on the first whiff but let you down when you get to what can be a disappointingly flabby palate, which can be over in a second with no acidity to flesh out the length. However, when the balance is better with good acidity to match the aromatic attack, it can be fragrant, fruity and fresh, as were the examples from Garamvári and Veszprémi.

Leaving South Balaton for a moment, the well-known Nyakas Pince from Zsambék in the Etyek-Buda region does one of the best Irsai Olivérs around and the 2017 has a bit more substance about it than usual.

Irsai is one of the parents (the other being Red Traminer) of Cserszegi fűszeres, crossed by Károly Bakonyi in 1960, and often has the acidity that Irsai so often lacks, as well as an exciting spiciness.

Garamvári is set to come out with its first Cserszegi, which is from the current vintage. Tasted as a tank sample at the

South Balaton tasting, it showed great promise but still needed a little time to settle. The winery’s first Furmint is also on the way, also from this vintage.

The Hungarian wine scene was shaken last year with the loss of János Konyári to cancer. He not only made some excellent wine at his own Konyári family cellar but also oversaw winemaking at the great-value Ikon Winery, both from South Balaton.

At the family winery, he had been making wine in tandem with his highly capable and experienced son Dániel for years. The Konyári Márton Napi Újbor 2017, a nouveau style wine, a Rosé 2017 tank sample, and a Chardonnay 2017, which are part of the winery’s entry-level range, were all looking very good.

Meanwhile, Dani’s sister Borbála is now in charge of winemaking at the larger Ikon winery. Tank samples of the 2017 editions of the Ikon Chardonnay and Rosé were both clean and correct, plus that wee bit more. The still cloudy Chardonnay was very citrusy with good acidity, while the rosé exuded fresh raspberry and bubblegum aromas, with lots of soft and juicy fruit on the smooth and round palate.

Borbála also makes wines for Késa, her very own family winery.

The renowned South Balaton producer Ottó Légli was not present at the tasting, but is set to unleash the next vintage of his traditional method sparkler. Légli Pezsgő Méthode Traditionnelle Brut 2015 is a blend of Riesling and Furmint and has lively fruit (peach, pear and green apple) and the slightest hint of petrol on the nose with fine bubbles and ideal acidity, which both help to make the otherwise fruity palate long and extremely elegant on the finish.

Two exciting young wines from South Balaton: Konyári Márton Napi Újbor 2017 Floral and light, soft and fruity with lots of peach, faultless and surprisingly good for a light nouveau wine made to hit the market on St. Martin’s Day on November 11. Blend of Olaszrizling and Sauvignon Blanc. The funky drawing of the goose on the label comes courtesy of Dani’s daughter.

HUF 1,690 from Bortársaság, Garamvári Irsai Olivér 2017 Fresh floral and fruity aromas with hints of citrus fruit, lychee, pear drop and grape soda, yet also pleasantly restrained. Vibrant and clean as a whistle with good body for the grape and a welcome twist of bitterness on the finish. Not much in the way of acidity but nevertheless a good representative of the grape and a good choice for those who don’t like their wines sharp.

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Photos by Russell Skidmore/XpatLoop.com

Budapest Bonfire Night Breaks Charity Fundraising Record The organizer of the annual Budapest Bonfire Night event held at the Budapest Marriott Hotel on November 5 says the 2017 version has bettered the record charity fund raising total of HUF 4.236 million set in 2016.

Party goers enjoying the Bonfire night atmosphere.

Singing on stage is local star Dávid Hegyi, who performed a medley of George Michael songs, in celebration of the fact that the late singer did a lot of work for charity that only became widely-known after his death.

ROBIN MARSHALL

Although donations are still being collected, it looks likely that this year more than HUF 5 million will have been generated. All money raised on the night will be split between three charities: Young People in Need (Rászoruló Fiatalok); the Magic Lamp Wish Granting Foundation (Csodalampa Alapítvány); and SOS Children’s Village.

Stephen Linfitt, the owner and publisher of XpatLoop.com, told the Budapest Business Journal that “heartfelt thanks are due for the

enthusiastic support of many good people and kind companies, not least British Ambassador Iain Lindsay, who kindly volunteered to conduct the Live Auction this year after his positive experience with the event in 2016.”

The ambassador congratulated XpatLoop.com “for organizing a fantastic Bonfire Night party. It was a lovely event which raised a record amount for Hungarian children’s charities. A huge thanks to all those who contributed so generously.”

The live auction he conducted raised HUF 2.4 million towards the total.

Rooted in the British Guy Fawkes tradition, which harks back to a 1605 attempt to assassinate King James I and blow up the U.K.’s Houses of Parliament, the Budapest evening features a by now traditional virtual bonfire and fireworks display.

Other entertainment included a “fireworks dance performance” choreographed especially for this event by internationBallet, live vocalists and musicians, wine casino games, and party tunes courtesy of Buddha Bar DJ Mr. T, as well as a silent auction and raffle.

As the event also doubles as XpatLoop’s birthday – the portal is now 17-years-old – there was a huge birthday cake (Hungary’s cake of the year for 2017, prepared by Gina Cukrászda), as well as a wide range of fine food and beverages.

Principal sponsors and partners included FirstMed, Special Effects International, Pappas Auto, Kreativ Dental Clinic, and the Marriott, which was hosting the event for the second year running.

International Circles

Linfitt estimated the crowd for the event at 200 plus, and said it was made up of expats and “locals who move in international circles”. The guest list included local VIPs and the ambassadors from Belgium, France, India, Italy, Portugal, Saudi Arabia, Spain and the UK, as well as Austrian Embassy Attaché Gerhard Staflinger, and U.S. Chargé d’Affaires David Kostelancik.

Ambassador Iain Lindsay in action during the live auction.

PROMOTION

Deluxe Rebirth Arany Kaviár Restaurant is now fully refurbished and its famously strong menu has been given yet another boost. So, if you havenʼt visited for the past two years, it is time to rediscover the venue where an even more deluxe experience is awaiting than ever before.

It is definitely not just a face-lift; Arany Kaviár Restaurant has undergone a fullyfledged remodeling. The addition of an elegantly cozy champagne garden marked stage one. Now the kitchen has been upgraded as well. As guest numbers doubled upon the inspiration of the brand-new looks, with seating capacity having remained the same, the cooking area needed to be adjusted to heavy demand.

“We have always been known for style and uniqueness, and this newly decorated interior, together with an elevated level of service, reflects it even better,” says Attila Molnár, co-owner of Arany Kaviár, which is popular with fans of Russian and global cuisine alike.

“Never have this many people worked here,” adds Molnár. “We hired additional kitchen and service staff, and we managed to sign colleagues with a Michelin-starred background.”

What fills him with particular pride is that new, mostly younger guests have been popping up on the radar, which has a lot to do with a strong social

media presence. Daily posts unveil behind-the-scenes activities, team building event details, and the state-of-the-art technology used to prepare signature dishes.

“Arany Kaviár is a true brand now,” says Molnár, referring the fact that the place has not only evolved into a major culinary hub in town, but it relies on two other pillars as well. For one, bistro Moskva tér, with its top-notch Russian dishes, has made a name for itself in the street food segment. Arany Kaviár also prides itself on being a heavyweight in the caviar business. Its gourmet selection, which is also available via its online web store, offers an exceptionally wide selection of leading global caviar brands.

“We want to raise awareness and share knowledge about this food segment,” notes Molnár. “Our specialist even holds workshops to that end, as we want to educate people in to different ways in which caviar can be consumed, and how it can make a difference even in smaller quantities.”

The menu of Arany Kaviár has witnessed an upgrade too. The leading novelty is a tasting menu of Hungarian fish, for which the ingredients are bred specifically for the restaurant in a fish farm in the countryside that gives the eatery the scope to serve fresh fish from an approved source.

“We intended to prove naysayers wrong who claim that fresh water fish cannot compete with sea fish,” says Molnár. “We walked an unbeaten path here for sure, as it was challenging to figure out what fish works best in what form of preparation. But it worked out, and the menu was received with very much enthusiasm.”

It is recommended that the fish tasting be enriched with a journey into the realm of caviar. On the menu are two main options: a standard five-item plan targets those that rather just wish to dip in a toe at first, whereas the deluxe caviar menu contains cream-of-the-crop black caviars for die-hard gourmets.

Pairings with vodka and champagne is set to crown the experience.

“The triangle of ambience, service and food must work in harmony,” notes Molnár. “I believe we have got that covered, and, thanks to our complete renewal, that harmony has reached a level where everything is given to make Michelin-star recognition a reality.”