Press Releases

Budapest, November 3, 2011 10:15

Magyar Telekom and the Union Insurance Company joined arm in arm to offer their customers bill payment insurance as of late October, thereby providing coverage to customers facing financial difficulties in paying their bills due to loss of work or permanent illness.

Telekom is the first to render available in Hungary a kind of insurance that provides a solution to its customers in paying their telephone, internet or TV bills when work is lost or when they are forced into a lengthy disability. The bill payment insurance is currently available for Telekom's 1.7 million residential customers with mobile contract and, respectively 1.6 million wire line service users. Only a minor fraction of the gainfully active population in Hungary possess some sort of insurance whereby they can offset the financial impacts of losing one's work (the so called unemployment insurance), while the overwhelming majority of the gainfully active population go without this kind of insurance. One of the obvious consequences of unexpectedly losing one's job is the need to immediately reduce costs and close to three fourths of the gainfully active population feel they would be facing a problem in paying their mobile bill if losing their job*. "The new arrangement has been called to life by the emerging customer need, which is our primary concern in our cooperation and development efforts. Another key to the popularity of the arrangements provided for various life situations is that they should be easily accessible to the user" - emphasised Viktor Maják, Union's communication director.

As it is an everyday need for the customer to maintain his availability to be able to get a new job or during lengthy illness, it is important for the customer to take care of paying the bills. Telekom's and Union's joint bill payment insurance offers a solution to this, as the insurance provides coverage for the payment of bills when regular income is lost. The insurance company pays the insurance directly to the telephone provider. The insurance provides coverage for settling the customer's account even when the cause for terminating the employment with mutual agreement is not specified. Apart from unemployment the arrangement covers the fees of the specified services if the client has suffered an accident or is ill and is unable to work for over 60 days.

The insured person may decide in what distribution he intends to use the amount paid by the insurer, either within the family or dividing it among various services. The arrangement provides a guarantee for the upkeep of services for 6 months within the value limit of HUF 10 to 15 thousand depending on the customer's choice. "This value limit ensures adequate protection according to the current telephone, internet and TV usage habits for the average bill expenses of a household, thus we consider that we can extend substantive help through this service to our struggling customers" - emphasised Gábor Pukler, Magyar Telekom's director of innovations and business development.

Average costs of the telephone, internet and TV services used by customers

Mobile spendings
Average monthly spending of a customer with one mobile contract: HUF 5 956
Wire line spending
Monthly average telephone cost of a wire line telephone customer: HUF 3 427
Monthly average spending of a wire line broad band internet customer: HUF 3 944
Average monthly spending of a TV customer: HUF 2 949
(Source: Magyar Telekom's Annual Report 2010)

In the result of the cooperation with the Union Insurance Co. having been in place since 2008 Telekom's customers may avail of various kinds of insurance services: so far close to 150 thousand customers have opted for the family accident insurance and also popular is the travel insurance customers can effect by sending a text message.

*Source: MagyarTelekom survey