2022
9
UK Consumers and Gadget Insurance Market Report 2022
2022-03-24T03:06:14+00:00
OX1100779
2195
149322
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Report
en_GB
“Rising inflation will put pressure on the gadget insurance market. The cost of policies is already seen as the biggest barrier and this will be heightened by current economic trends.

UK Consumers and Gadget Insurance Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Consumers and Gadget Insurance report identifies consumer attitudes towards mobile phone and gadget insurance, insurance claims, and competitive strategies in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Consumers and Gadget Insurance market in the UK.

Current Market Landscape

Despite the vast majority of policyholders having successful claims, some perceptions regarding insurers not paying out persist. Insurers are currently well placed to challenge this perception, and build trust by publishing the proportion of claims approved and providing case studies to showcase a successful and efficient claims process.

  • 84% of insurance policyholders who have cover for their gadgets and made a claim in the last two years had their claim paid out.
  • 46% of adults with insured gadgets are always looking for the cheapest cover, while 48% of those without insurance think it is too expensive.
  • While 87% of adults own a smartphone, only 45% have cover to protect their devices.

Rising inflation will put pressure on the gadget insurance market, pushing up costs for insurers due to rising claims costs associated with repairs and replacements. If providers pass on these costs, consumers face higher premiums for an already discretionary product. The current cost-of-living crisis is also having a direct impact on people’s finances, creating a defensive mindset towards spending and limiting non-essential purchases among some consumers.

Future Market Trends in Gadget Insurance 

Cost is already seen as a major barrier to taking out gadget insurance, with consumers with tighter budgets considering cancelling or downgrading their insurance cover and make others even more reluctant to take it out. Insurers will therefore have to focus on demonstrating the value of their products and enhancing perceptions of value.

The gap in insurance shows there is still significant room for expansion, and insurers have an opportunity to increase sales by attracting more smartphone owners. As the value of smartphones increases, providers can highlight how gadget insurance can help consumers save money by not paying for a replacement or covering the cost of a repair.

Read on to discover more details or take a look at all of our UK Technology market research

Quickly understand

  • Market performance, including market drivers.
  • An analysis of competitive strategies and launch activity.
  • Ownership of gadget insurance.
  • Claims experience.
  • Purchase drivers and barriers.

Covered in this report

Brands: Samsung (Galaxy, Samsung Care+), Apple (AppleCare+), Back Market, SO-SURE, AXA, Insurance2go, Barclays, Virgin Money, Arma Karma, EE, Lloyds Bank.

Expert analysis from a specialist in the field

This report, written by Stefania Apostol, a leading analyst in the Financial Services sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Rising inflation will put pressure on the gadget insurance market. The cost of policies is already seen as the biggest barrier and this will be heightened by current economic trends. Insurers will have to demonstrate the value of their products by offering reassurance to existing policyholders, and enticing new customers with a combination of simplicity, flexibility and price incentives.

Stefania Apostol - Financial Services AnalystStefania Apostol
Financial Services Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for gadget insurance
      • Figure 1: Category outlook, 2022-26
    • The market
    • Policy sales up, driven by growth in technology sales
      • Figure 2: Estimated number of gadget insurance policy sales, 2016-21
    • Pandemic-led increase to stabilise
      • Figure 3: Market forecast for gadget insurance policy sales, 2016-26
    • Rising inflation raises concerns
    • Financial confidence declines due to heightened uncertainty
      • Figure 4: Financial Confidence Index, 2019-22
    • Companies and brands
    • Insurance for refurbished devices
    • Tech giants make inroads into gadget insurance
    • The consumer
    • 42% of gadget owners have experienced accident or loss in the last two years
      • Figure 5: Experience of damage, breakdown, loss or theft, 2021
    • More than half have at least one gadget covered…
    • …but only 16% have specific gadget insurance
      • Figure 6: Penetration of gadget insurance – NET, 2021
    • Significant gap in smartphone protection
      • Figure 7: Penetration of gadget insurance, by type of gadget, 2021
    • Specific gadget insurance most likely to be arranged at the time of purchase
      • Figure 8: Method of arranging specific gadget insurance, 2021
    • Policyholders want reassurance above all else
    • Younger generations are more likely to take online reviews into account
      • Figure 9: Attitudes and behaviours towards gadget protection, 2021
    • Majority of gadget-related claims were paid
      • Figure 10: Outcome of gadget insurance claim, 2021
    • A third could be encouraged to take out a bundled cover
      • Figure 11: Purchase drivers of gadget insurance, 2021
    • Cost and perceived lack of value are the main barriers
      • Figure 12: Gadget insurance barriers, 2021
  3. Issues and Insights

    • Rising inflation will put pressure on sales of gadget insurance
    • Gadget owners are seeking flexibility, convenience and a simple claims process
  4. Market Size and Performance

    • Policy sales up, driven by growth in technology sales
      • Figure 13: Estimated number of gadget insurance policy sales, 2016-21
  5. Market Forecast

    • The five-year outlook for gadget insurance
      • Figure 14: Category outlook, 2022-26
    • Pandemic-led increase to stabilise
      • Figure 15: Market forecast for gadget insurance policy sales, 2016-26
      • Figure 16: Market forecast for gadget insurance policy sales, 2016-26
    • Market drivers and assumptions
    • Forecast methodology
  6. Market Drivers

    • Rising inflation raises concerns
      • Figure 17: Consumer concerns about household finances, 2021-22
    • Financial confidence declines due to heightened uncertainty
      • Figure 18: Financial Confidence Index, 2019-22
    • Semiconductor chip shortage impacts supply across the tech sector
    • Smartphone market recovers
    • Laptops see strong growth
    • Tablet market decreased in 2021
    • Wearable technology gains popularity
    • Headphones and earbuds market continues to see positive performance
    • Substantial growth in the gaming industry
    • Home contents insurance sales stagnate
      • Figure 19: Total written home contents and combined insurance policies, 2012-21
  7. Regulatory and Legislative Changes

    • FCA is set to introduce a new Consumer Duty
    • FCA introduces fair-value rules for insurance products
  8. Competitive Strategies and Launch Activity

    • AXA continues its expansion into the gadget insurance market
    • Insurance for refurbished devices
    • Barclays relaunched its Tech Pack insurance
    • Virgin Money includes gadget insurance in its Club M packaged account
    • Arma Karma offers possession-based insurance
    • Tech giants make inroads into gadget insurance
    • EE adds AppleCare to its insurance plans
    • Home contents policies offer more flexibility
  9. Gadget Ownership

    • Gadget ownership is widespread
    • Smartwatch ownership sees strong growth
      • Figure 20: Ownership of gadgets, 2020-21
    • 42% of gadget owners have experienced an accident or loss in the last two years
      • Figure 21: Experience of damage, breakdown, loss or theft, 2021
  10. Gadget Insurance Penetration

    • More than half have at least one gadget covered…
    • …but only 16% have specific gadget insurance
      • Figure 22: Penetration of gadget insurance – NET, 2021
    • Significant gap in smartphone protection
      • Figure 23: Penetration of gadget insurance, by type of gadget, 2021
    • Penetration of specific gadget insurance is higher among owners of high-end headphones…
    • …and wearable technology
      • Figure 24: Penetration of gadget insurance, by type of coverage and gadget, 2021
  11. Methods of Arranging Specific Gadget Insurance

    • Specific gadget insurance most likely to be arranged at the time of purchase…
    • …with embedded insurance set to increase reach of gadget cover
      • Figure 25: Method of arranging specific gadget insurance, 2021
  12. Attitudes and Behaviours towards Gadget Protection

    • Policyholders want reassurance above all else
    • Younger generations are more likely to take online reviews into account
      • Figure 26: Attitudes and behaviours towards gadget protection
    • Almost half of policyholders look for the cheapest cover
      • Figure 27: Selected behaviour towards gadget protection, by type of gadget cover, 2021
  13. Claims Experience

    • Accidental damage is the main reason for making a claim
      • Figure 28: Claims made in the last two years, 2021
    • Majority of claims were paid
      • Figure 29: Outcome of gadget insurance claim, 2021
  14. Purchase Drivers of Gadget Insurance

    • A third could be encouraged to take out a bundled cover
    • Flexible policies are more likely to appeal to younger generations
      • Figure 30: Purchase drivers of gadget insurance, 2021
    • A combination of simplicity, flexibility and price incentives can increase engagement
      • Figure 31: TURF analysis – consumers and gadget insurance, November 2021
  15. Purchase Barriers

    • Cost is the main barrier…
    • …followed by a perceived lack of value
      • Figure 32: Gadget insurance barriers, 2021
    • Simplifying gadget insurance could help improve trust
      • Figure 33: Purchase drivers of gadget insurance, by barriers, 2021
  16. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  17. Appendix: Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 34: Market forecast for gadget insurance policy sales, 2021-26
    • Market drivers and assumptions
    • Forecast methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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