Extended Warranties and Insurance for Mobile and Non-Mobile Consumer Products in the UK
Finaccord Ltd.
July 1, 2011 73 Pages - SKU: FIN6575844
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This report titled Extended Warranties and Insurance for Mobile and Non-Mobile Consumer Products in the UK is about the market for extended warranties and insurance sold in conjunction with white goods, brown goods, grey goods, mobile gadgets and mobile telephones in the UK. The study draws on extensive primary and secondary research covering 172 organisations involved in the production and distribution of mobile and non-mobile consumer products including manufacturers, mainstream mobile network operators, mobile virtual network operators (MVNOs), specialised retailers of consumer electronics, supermarkets and other types of retailer (namely, department stores, DIY outlets, speciality retailers and variety retailers). Hence, it provides a comprehensive overview of this activity across the UK.
Key features of this publication include: - quantification of the market size for extended warranties and insurance linked to mobile and non-mobile consumer products: how much is the market likely to be worth in the UK, and how does it segment between white goods, brown goods, grey goods, mobile gadgets and mobile telephones? - analysis of extended warranty underwriters and brokers that have established scheme relationships with manufacturers and retailers of white goods, brown goods, grey goods, mobile gadgets and mobile telephones, including their unweighted share of partnerships; - consideration of the potential for cross-selling stand-alone extended warranty and insurance policies through independent channels that are separate from either manufacturers or retailers: does an emerging market exist for this form of distribution in the UK? - forecasts for the market size for extended warranties and insurance linked to mobile and non-mobile consumer products up to 2014: assuming no significant changes in the number of manufacturer and retailer schemes, what factors will cause this sector to grow or decline in the next few years?
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- 0.0 EXECUTIVE SUMMARY
- 1.0 INTRODUCTION
- What is this report about?
- Rationale
- Most published data focuses disproportionately on the underlying consumer product markets…
- … ignoring the fact that manufacturers and retailers can make large profits from insurance schemes
- Evolving distribution channels both favour and compromise extended warranty provision
- Methodology
- Manufacturer and retailer survey
- The survey extends to 172 manufacturers and retailers of mobile and non-mobile consumer products
- Market data
- Definitions
- Extended warranties and insurance
- Extended warranties and insurance linked to consumer products come in a variety of formats…
- … and are frequently marketed to consumers under alternative titles
- Operating models
- PartnerBASE™
- Finaccord
- 2.0 WHITE GOODS
- Introduction
- Underlying market value and volume
- The volume of sales of white goods declined by almost 12% between 2006 and 2010
- Manufacturer schemes for extended warranties and insurance
- Domestic & General accounts for the lion’s share of manufacturer partnerships in the UK
- Retailer schemes for extended warranties and insurance
- Lively competition exists for retailer distribution deals in the UK’s extended warranty market
- In terms of its number of partnerships, The Warranty Group is the main rival to Domestic & General
- Dixons Retail Group generates a significant stream of revenue from extended warranties
- Although its international revenues have grown strongly, the UK remains central for Domestic & General
- HomeServe is continuing its mission to expand its warranty market share in the UK…
- …and Warranty Direct is growing profitably, although only partially from consumer electronics
- Risk coverage of all schemes for extended warranties and insurance
- Most programs include cover for accidental damage as well as mechanical breakdown
- Independent distribution channels
- A number of providers in the UK offer extended warranties directly to consumers
- … albeit the OFT continues investigations into the competitive structure of the market
- Market value for extended warranties and insurance
- Market forecasts to 2014
- The white goods market is forecast to have made a modest recovery by 2014
- which will also help the extended warranty market to increase in value
- 3.0 BROWN GOODS
- Introduction
- Underlying market value and volume
- The volume of sales of brown goods was more than 10% less in 2010 than in 2006
- Manufacturer schemes for extended warranties and insurance
- In the UK, over a half of major manufacturers of brown goods run extended warranty programs
- Retailer schemes for extended warranties and insurance
- Most retail brands outsource their extended warranty programs to external partners
- …with a variety of specialised brokers and underwriters in evidence in this context
- Risk coverage of all schemes for extended warranties and insurance
- Most schemes provide cover for accidental damage as well as technical breakdown
- Independent distribution channels
- Market value for extended warranties and insurance
- Market forecasts to 2014
- The UK’s brown goods market may have retreated further still by 2014
- with the value of the related extended warranty market falling in tandem
- 4.0 GREY GOODS
- Introduction
- Underlying market value and volume
- The UK’s grey goods market value declined by almost a third between 2006 and 2010
- Manufacturer schemes for extended warranties and insurance
- Several manufacturers collaborate with external extended warranty or insurance providers
- Retailer schemes for extended warranties and insurance
- Several providers compete for retailer partnerships with Domestic & General and The Warranty Group
- Domestic & General is the accredited partner of Sky for policies sold in conjunction with Sky boxes
- Risk coverage of all schemes for extended warranties and insurance
- Two thirds of schemes provide cover for accidental damage in addition to technical breakdown
- Independent distribution channels
- Market value for extended warranties and insurance
- Market forecasts to 2014
- The value of the grey goods market is likely to decline further between 2006 and 2010
- which means that the value of sales of associated extended warranties will also retreat
- 5.0 MOBILE GADGETS
- Introduction
- Underlying market value and volume
- A continuing flow of innovative product launches stimulates growth in sales of mobile gadgets
- Manufacturer schemes for mobile gadget insurance
- A narrow majority of major manufacturers in the UK offer some type of insurance program
- Retailer schemes for mobile gadget insurance
- Over a half of major retailers of mobile gadgets have developed an insurance program
- There are upwards of a dozen non-captive providers competing for retailer partnerships
- Risk coverage of all schemes for mobile gadget insurance
- Cover for accidental damage is increasingly a standard feature of mobile gadget insurance in the UK
- Independent distribution channels
- Numerous options exist for consumers to buy mobile gadget insurance through independent channels
- including Assurant’s Protect Your Bubble proposition
- and other niche brands such as Compucover, Gadget Cover and Insurance2Go
- Market value for mobile gadget insurance
- Market forecasts to 2014
- The value of the UK’s mobile gadget market will continue to expand in the years leading up to 2014
- which makes mobile gadget insurance a promising area in which to be involved
- 6.0 MOBILE TELEPHONES
- Introduction
- Underlying market volumes
- The volume of mobile telephone subscriptions rose by nearly one quarter between 2006 and 2010
- while the number of individuals in possession of a mobile telephone grew by 3.6 million
- Manufacturer schemes for mobile telephone insurance
- Retailer schemes for mobile telephone insurance
- Numerous external partners compete in the market for mobile telephone insurance…
- including both major multi-line insurers and specialised niche providers
- with the result that this market is densely populated with no obvious market leader
- Assurant’s Protect Your Bubble brand achieves high visibility through advertising campaigns…
- …while Citymain and Lifestyle Services Group have both seen changes in ownership…
- …and other specialist providers include CPP, NEW Asurion, Summit Insurance Services and Supercover
- Risk coverage of all schemes for mobile telephone insurance
- Almost all policies cover accidental damage and the vast majority also cover theft
- Independent distribution channels
- UK consumers can choose from numerous independent insurance options
- including niche brands such as Insurance2Go and Supercover
- Mobile insurance is slowly spreading to comparison websites
- Market value for mobile telephone insurance
- Market forecasts to 2014
- Mobile telephone subscriptions per capita are forecast to reach 1.45 in 2014
- which equates to a predicted number of individuals with a mobile telephone of 59 million
- In terms of its value, several factors indicate that the UK market should grow between 2010 and 2014
- LIST OF GRAPHICS / TABLES
- 10.0 EXECUTIVE SUMMARY
- Approximate market value for extended warranties and insurance linked to mobile and non-mobile consumer products in the UK, 2010 and 2014 (forecast)
- 1.0 INTRODUCTION
- Organisations researched segmented by type
- 2.0 WHITE GOODS
- Value and volume of sales of white goods in the UK, 2006 and 2010
- Manufacturer schemes for extended warranties and insurance linked to white goods in the UK: provision rates, operating models and provider share of non-captive partnerships, 2011
- Retailer schemes for extended warranties and insurance linked to white goods in the UK: provision rates, operating models and provider share of non-captive partnerships, 2011
- Risk coverage of all schemes for extended warranties and insurance linked to white goods in the UK, 2011
- Approximate market value for extended warranties and insurance linked to white goods in the UK,
- Value and volume of sales of white goods in the UK, 2010 and 2014 (forecast)
- Forecast market value for extended warranties and insurance linked to white goods in the UK, 2014
- 3.0 BROWN GOODS
- Value and volume of sales of brown goods in the UK, 2006 and 2010
- Manufacturer schemes for extended warranties and insurance linked to brown goods in the UK: provision rates, operating models and provider share of non-captive partnerships, 2011
- Retailer schemes for extended warranties and insurance linked to brown goods in the UK: provision rates, operating models and provider share of non-captive partnerships, 2011
- Risk coverage of all schemes for extended warranties and insurance linked to brown goods in the UK, 2011
- Approximate market value for extended warranties and insurance linked to brown goods in the UK, 2010
- Value and volume of sales of brown goods in the UK, 2010 and 2014 (forecast)
- Forecast market value for extended warranties and insurance linked to brown goods in the UK, 2014
- 4.0 GREY GOODS
- Value and volume of sales of grey goods in the UK, 2006 and 2010
- Manufacturer schemes for extended warranties and insurance linked to grey goods in the UK: provision rates, operating models and provider share of non-captive partnerships, 2011
- Retailer schemes for extended warranties and insurance linked to grey goods in the UK: provision rates, operating models and provider share of non-captive partnerships, 2011
- Risk coverage of all schemes for extended warranties and insurance linked to grey goods in the UK, 2011
- Approximate market value for extended warranties and insurance linked to grey goods in the UK, 2010 .
- Value and volume of sales of grey goods in the UK, 2010 and 2014 (forecast)
- Forecast market value for extended warranties and insurance linked to grey goods in the UK, 2014
- 5.0 MOBILE GADGETS
- Value and volume of sales of mobile gadgets in the UK, 2006 and 2010
- Manufacturer schemes for mobile gadget insurance in the UK: provision rates, operating models and provider share of non-captive partnerships, 2011
- Retailer schemes for mobile gadget insurance in the UK: provision rates, operating models and provider share of non-captive partnerships, 2011
- Risk coverage of all schemes for mobile gadget insurance in the UK, 2011
- Approximate market value for mobile gadget insurance in the UK, 2010
- Value and volume of sales of mobile gadgets in the UK, 2010 and 2014 (forecast)
- Forecast market value for mobile gadget insurance in the UK, 2014
- 6.0 MOBILE TELEPHONES
- Volume of mobile telephone subscriptions and subscriptions per capita in the UK, 2006 and 2010
- Number of individuals owning a mobile telephone in the UK and their weighting within the total population, 2006 and 2010
- Manufacturer schemes for mobile telephone insurance in the UK: provision rates and operating models, 2011
- Retailer schemes for mobile telephone insurance in the UK: provision rates, operating models and provider share of non-captive partnerships, 2011
- Risk coverage of all schemes for mobile telephone insurance in the UK, 2011
- Approximate market value and policies in force for mobile telephone insurance in the UK, 2010
- Volume of mobile telephone subscriptions and subscriptions per capita in the UK, 2010 and 2014 (forecast)
- Number of individuals owning a mobile telephone in the UK and their weighting within the total population, 2010 and 2014 (forecast)
- Forecast market value and policies in force for mobile telephone insurance in the UK, 2014
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