Expensive smartphone takeup is driving the global mobile insurance market says analyst
The global market for mobile phone insurance and extended warranties reached $13.3 billion in 2015, and is on track to rise to $17.6 billion by 2019, according to analyst Finaccord.
Finaccord says the rise in ownership of smartphones is boosting take-up rates for mobile phone cover globally, as individuals with such handsets are more likely to purchase insurance or extended warranty cover.
Consumers who acquire a subsidised smartphone from a mobile network operator under contract are usually tied for up to two years to a particular handset which would be expensive to replace. This thereby makes the addition of a mobile phone insurance or extended warranty policy a more attractive proposition to market, said Finaccord.
Claire Fetherstonhaugh, consultant at Finaccord, said: “The worldwide market for mobile phone cover is not especially large when compared with other consumer insurance markets such as personal motor and home insurance.
“However, it has already overtaken travel insurance which had a global stand-alone value of around $15.8 billion in 2015.
“Moreover, as with travel insurance, the mobile phone insurance and extended warranty sector is likely to be increasing at an annual rate that is significantly ahead of both motor and home insurance.”
Fetherstonhaugh added: If more major mobile network operators launch schemes for this type of cover – something which is not factored into our forecast as it stands – or if independent distributors are able to expand their share of the market, then revenues from it could grow even more rapidly.”
The research undertaken by Finaccord covered close to 1,700 distributors of mobile phone cover across 40 countries, comprising retailers – including mobile network operators – and manufacturers.