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UNIQA Biztosító Zrt offers legal insurance |
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Saturday, 27 February 2010 |
“Currently there is barely any competition in Hungary in terms of legal insurance,” Pál Ertl, board member of UNIQA Biztosító, noted. Last week his insurance company officially set about changing that.
Until now the Hungarian legal insurance market has been dominated by a single large specialist supplier, D.A.S. Jogvédelmi Biztosító. In addition some of the larger insurance companies such as Generali and Allianz also offer legal insurance, albeit fairly half-heartedly. Of the 36,000 legal insurance contracts registered with the State Financial Supervisory Authority (PSZÁF) with a combined annual turnover of around HUF 1.5 billion (EUR 5.56 million), some 30,000 were signed with D.A.S according to the company’s own figures.
UNIQA appears to attribute greater importance to entering the legal insurance market than the other general insurance companies active in this field. The company has set itself very ambitious growth targets. According to Ertl the company is targeting turnover of several hundred million forints this year, and within three years is even aiming for the HUF 1 billion (EUR 3.71 million) mark. The company is starting almost from zero: according to its own figures it currently has around 400 legal insurance customers.
To cover its expenses UNIQA currently needs around 300 new contracts each month. At around 30,000 contracts the system will then pay for itself. How quickly that figure can be reached depends largely on how quickly Hungarian consumers recognise the value of legal insurance and new sales channels can be opened up. Ertl believes that it could soon be as natural for car dealerships to offer legal insurance as full-coverage and liability insurance.
Due to legal insurance not being widespread in Hungary and insufficiently appreciated by Hungarian consumers the company is placing great emphasis on training its insurance advisers. Ertl is convinced that the expense will pay off. “While in Germany around 51% of households have legal insurance compared to just 1.5% in Hungary. That percentage will certainly grow in the coming years. In am expecting a significant increase in competition among suppliers. The companies that were the first on this submarket will hold the best cards.”
Ertl believes it is important for the success of his new product that it is really used by its customers: “Our insurance only has a purpose if it is used,” he said. He encourages customers not only to take out the insurance, but also to use it. He is not concerned that some customers will take his words too literally and start suing people right, left and centre because experience in Western Europe shows that the litigiousness of most customers does not change significantly as a result of owning legal insurance.
And even if some customers do in fact become overly litigious after taking out legal insurance, the system would - given an appropriate number of legal insurance contracts - be able to manage the cost. “Supported by insurance mathematics and based on experience in Western Europe our model will function in Hungary,” Ertl said. And if a customer were to go totally overboard, the insurance company retains the possibility of terminating the contract with due notice. “Naturally after fulfilling all our previous obligations,” he added.
The new form of insurance at UNIQA will be introduced in three key areas: family, car and real estate. Some situations, however, are not covered, for example legal disputes with insurance companies and over violations of copyright. Legal disputes connected to speeding are also excluded as a precaution. “We don’t want to encourage anyone to violate the rules through our products,” Ertl stressed. In the future the legal insurance is also to be rolled out in other areas. This spring, for example, the introduction of special legal insurance for hunters is planned.
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