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Consumers and Gadget Insurance - UK - September 2014

“In order to drive their businesses forward and generate revenue growth, specialist providers of gadget insurance need to explain the benefits of cover to a wide audience, including home insurance policyholders, and promote a reputation for claims fairness and transparency.”
– Sarah Hitchcock, Senior Analyst – Financial Services

This report covers the following key areas:

  • The battle for customers in a mobile world
  • Putting a price on protection
  • Working towards greater transparency and better claims handling

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Table of contents

  1. Introduction

      • Report scope and product definitions
        • Distribution mix
          • Abbreviations
          • Executive Summary

              • The market
                • Gadget cover is widely held, though it comes in different forms
                  • Product evolution
                    • Value of the market
                      • Size of the add-on sector
                        • Market factors
                          • Technological advances drives growth…
                            • …but the market is facing increased regulatory pressure
                              • Gadget and mobile phone insurance is commonly sold as an add-on to a packaged current account
                                • Company, brands and innovation
                                  • Leading administrators and underwriters
                                    • Product innovation
                                      • The consumer
                                        • UK adults are avid users of mobile devices
                                          • Figure 1: Personal ownership of gadgets, by type, June 2014
                                        • Frequency of taking gadgets outside the home
                                          • One in six have accidentally damaged their gadget
                                            • Figure 2: Experience of loss, damage, theft and breakdown, June 2014
                                          • Take-up of gadget and other related insurance
                                            • Figure 3: Ownership of gadget/mobile phone insurance and personal belongings cover, June 2014
                                          • Experience of making a claim
                                            • Figure 4: Proportion of policyholders who have made claim in the past two years and claimant satisfaction, June 2014
                                          • One in ten of the non-insured are planning to get cover in the coming year
                                            • Figure 5: Likelihood of getting mobile phone or gadget insurance within the next 12 months, June 2014
                                          • Attitudes toward gadget insurance
                                            • Figure 6: Agreement with statements about gadget insurance, June 2014
                                          • What we think
                                          • Issues in the Market

                                              • The battle for customers in a mobile world
                                                • The facts
                                                  • The implications
                                                    • Putting a price on protection
                                                      • The facts
                                                        • The implications
                                                          • Working towards greater transparency and better claims handling
                                                            • The facts
                                                              • The implications
                                                              • Trend Application

                                                                  • Trend: Extend my Brand
                                                                    • Trend: Click and Connect
                                                                      • Trend: The Suite Life
                                                                      • Market Drivers

                                                                        • Key points
                                                                          • The average person owns electronic devices worth over £4,000
                                                                            • Laptops and smartphones are the most commonly owned gadgets
                                                                              • Figure 7: Technology products personally owned, April 2013, April 2014 and June 2014
                                                                            • Technology buying intentions are up strongly in 2014
                                                                              • Figure 8: Technology products plan to buy/upgrade in the next three months, April 2013 and April 2014
                                                                            • Average price of smartphones, laptops and tablets continues to fall
                                                                              • Figure 9: Value (and volume) of the mobile phone, laptop and tablet markets, 2011-14
                                                                            • Mobile phone cover is a staple part of the packaged account offering
                                                                              • Perceived relevance of mobile phone and gadget insurance by packaged account holders
                                                                                • Figure 10: Inclusion and perceived relevance of common packaged account benefits, June 2013
                                                                              • Summary of recent regulatory developments affecting the gadget insurance market
                                                                              • Market SWOT Analysis

                                                                                  • Figure 11: The gadget insurance market– SWOT analysis, 2014
                                                                              • Who’s Innovating?

                                                                                • Key points
                                                                                  • An evolving market
                                                                                    • SPB Group brings walk-in repair model to the UK
                                                                                      • Switched On Insurance launches travel add-on product
                                                                                      • Market Size and Segmentation

                                                                                        • Key points
                                                                                          • Exact product penetration is difficult to determine due to consumer confusion over exactly what cover they have
                                                                                            • Figure 12: Ownership of gadget and mobile phone insurance, June 2014
                                                                                          • A market with strong sales growth and good expansion potential
                                                                                            • Most providers partner with specialist third-party administrators and underwriters
                                                                                              • Figure 13: Selected providers of gadget/mobile phone insurance and their administrators/underwriters, August 2014
                                                                                          • Companies and Products

                                                                                              • Assurant Solutions
                                                                                                • Company description
                                                                                                  • Product/service range
                                                                                                    • SPB UK & Ireland (formerly Citymain)
                                                                                                      • Company description
                                                                                                        • Product/service range
                                                                                                          • Supercover Insurance
                                                                                                            • Company description
                                                                                                              • Product/service range
                                                                                                              • Brand Communication and Promotion

                                                                                                                • Key points
                                                                                                                  • Protect Your Bubble is the leading gadget insurance advertiser
                                                                                                                    • Figure 14: Advertising expenditure on mobile and gadget insurance, 12 months to June 2014
                                                                                                                  • A note on adspend
                                                                                                                  • Gadget Ownership and Usage Outside of the Home

                                                                                                                    • Key points
                                                                                                                      • Survey background
                                                                                                                        • Some 99% of UK adult internet users own at least one electronic device
                                                                                                                          • Figure 15: Personal ownership of gadgets, by type, June 2014
                                                                                                                        • Laptops still more popular than tablets
                                                                                                                          • Wearable devices are set to be the “next big thing”
                                                                                                                            • Some 84% normally carry their smartphone on them every day
                                                                                                                              • Figure 16: Frequency of taking gadget outside the home, by type of gadget, June 2014
                                                                                                                          • Experience of Common Risk Factors

                                                                                                                            • Key points
                                                                                                                              • Accidental damage is the top threat
                                                                                                                                • Figure 17: Experience of loss, damage, theft and breakdown and of taking gadget(s) on holiday, June 2014
                                                                                                                              • Mitigating the cost of claims
                                                                                                                                • Globe trotting
                                                                                                                                • Penetration of Gadget Insurance

                                                                                                                                  • Key points
                                                                                                                                    • Personal belongings cover is the main competitor to gadget insurance
                                                                                                                                      • Figure 18: Ownership of gadget/mobile phone insurance and personal belongings cover, June 2014
                                                                                                                                    • Standalone gadget insurance fills a gap in the market…
                                                                                                                                      • …but with many people owning more than one policy type, could some be unnecessarily doubling up their coverage?
                                                                                                                                        • Figure 19: Ownership of gadget/mobile phone insurance and personal belongings cover – cross-tabulation, June 2014
                                                                                                                                      • Some consumers may be mistaken about exactly what is covered by their home contents policy
                                                                                                                                        • Figure 20: Requirement to pay extra for gadget/mobile phone or personal belongings cover attached to home contents policy, June 2014
                                                                                                                                      • Good expansion potential
                                                                                                                                        • Figure 21: Likelihood of getting mobile phone or gadget insurance within the next 12 months, June 2014
                                                                                                                                    • Claims Experience

                                                                                                                                      • Key points
                                                                                                                                        • Room for improvement in handling claims
                                                                                                                                          • Figure 22: Proportion of policyholders who have made claim in the past two years and claimant satisfaction, June 2014
                                                                                                                                      • Attitudes toward Gadget Insurance

                                                                                                                                        • Key points
                                                                                                                                          • More work to do in regards to building consumer trust
                                                                                                                                            • Figure 23: Agreement with statements about gadget insurance, June 2014
                                                                                                                                        • Appendix – Gadget Ownership by Demographics

                                                                                                                                            • Figure 24: Ownership of gadgets – top six, June 2014
                                                                                                                                            • Figure 25: Ownership of gadgets – final five, June 2014
                                                                                                                                        • Appendix – Usage Outside the Home by Demographics

                                                                                                                                            • Figure 26: Frequency of taking smartphone outside the home, by demographics, June 2014
                                                                                                                                            • Figure 27: Frequency of taking mobile phone (not smartphone) outside the home, by demographics, June 2014
                                                                                                                                            • Figure 28: Frequency of taking tablet outside the home, by demographics, June 2014
                                                                                                                                            • Figure 29: Frequency of taking e-Reader outside the home, by demographics, June 2014
                                                                                                                                            • Figure 30: Frequency of taking laptop outside the home, by demographics, June 2014
                                                                                                                                            • Figure 31: Frequency of taking MP3 player outside the home, by demographics, June 2014
                                                                                                                                            • Figure 32: Frequency of taking digital camcorder/camera outside the home, by demographics, June 2014
                                                                                                                                            • Figure 33: Frequency of taking portable games console outside the home, by demographics, June 2014
                                                                                                                                            • Figure 34: Frequency of taking Sat Nav outside the home, by demographics, June 2014
                                                                                                                                        • Appendix – Experience of Common Risk Factors

                                                                                                                                            • Figure 35: Experience of loss, damage, theft and breakdown of gadget, by demographics, June 2014
                                                                                                                                            • Figure 36: Experience of taking gadget(s) on holiday, by demographics, June 2014
                                                                                                                                            • Figure 37: Experience of loss, damage, theft and breakdown and of taking gadget(s) on holiday, by type of gadget owned, June 2014
                                                                                                                                        • Appendix – Penetration of Gadget Insurance by Demographics

                                                                                                                                            • Figure 38: Ownership of gadget, mobile phone and personal belongings cover, by demographics, June 2014
                                                                                                                                            • Figure 39: Ownership of gadget and mobile phone insurance as part of a packaged current account, by demographics, June 2014
                                                                                                                                            • Figure 40: Ownership of standalone gadget and mobile phone insurance, by demographics, June 2014
                                                                                                                                            • Figure 41: Ownership of gadget/mobile phone insurance and personal belongings cover, by type of gadget owned, June 2014
                                                                                                                                            • Figure 42: Requirement to pay extra for gadget/mobile phone or personal belongings cover attached to home contents policy, by demographics, June 2014
                                                                                                                                            • Figure 43: Likelihood of getting mobile phone or gadget insurance within the next 12 months, by demographics, June 2014
                                                                                                                                        • Appendix – Claims Experience by Demographics

                                                                                                                                            • Figure 44: Claims experience and satisfaction, by demographics, June 2014
                                                                                                                                            • Figure 45: Claims experience and satisfaction, by type of gadget owned, June 2014
                                                                                                                                        • Appendix – Attitudes toward Gadget Insurance by Demographics

                                                                                                                                            • Figure 46: Agreement with statements about gadget insurance – top five responses, by demographics, June 2014
                                                                                                                                            • Figure 47: Agreement with statements about gadget insurance – final three response, by demographics, June 2014

                                                                                                                                        Companies Covered

                                                                                                                                        • Assurant Solutions
                                                                                                                                        • Assurant, Inc.
                                                                                                                                        • Auchan
                                                                                                                                        • BNP Paribas
                                                                                                                                        • Cdiscount
                                                                                                                                        • Fnac
                                                                                                                                        • GameStop Corp
                                                                                                                                        • Kwik-Fit Insurance Services Ltd.
                                                                                                                                        • Lloyds Banking Group

                                                                                                                                        Consumers and Gadget Insurance - UK - September 2014

                                                                                                                                        US $2,583.33 (Excl.Tax)