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UK Mobile Phone & Gadget Insurance Market 2021: Consumer Research Report

  • ID: 5331658
  • Report
  • May 2021
  • Region: United Kingdom
  • IRN Research
Number of People Owning Mobile Insurance Increased by 21% Between 2012 and 2021

FEATURED COMPANIES

  • AmTrust Europe Limited
  • Aviva Insurance Ltd
  • Chubb European Group SE
  • EE Insurance (BT Group)
  • Great Lakes Insurance
  • Telefónica Insurance S.A

This report examines the motivations, experiences and opinions of UK consumers who own mobile phone and/or gadget insurance. It identifies and analyses consumer attitudes towards mobile phone and gadget insurance, looks at the claims experience of policyholders, and investigates why they choose one route to purchase over another.

In addition, it explores how price sensitivity is impacting the market. Similar research was run in 2019 for mobile phone customers and the report compares and contrasts findings for mobile phone insurance between 2019 and 2021.

For this report, the publisher commissioned research from MIS Group’s UK panel. The research was structured so that 2,002 nationally representative consumers aged 18+ were asked if they owned an insurance policy.

This generated 457 individuals who stated that they owned a mobile phone insurance policy and 215 who owned gadget insurance. Similar research in 2019 generated responses from 462 individuals who owned mobile phone insurance.

The publisher estimates that in 2021 around 12.1 million adults were covered by mobile phone insurance and 5.7 million by gadget insurance. Between 2012 and 2021, the number of people owning mobile insurance increased by 21%, with the rate of growth slowing in recent years as ownership of mobiles reaches saturation levels.

While over eight-in-ten consumers own a mobile phone and over eight-in-ten own electronic gadgets like computers, digital cameras, tablets, games consoles, e-readers and smart watches, only 24% of consumers who own a mobile for personal use own insurance and 11% of gadget owners have gadget insurance. Therefore, there is ample potential to expand the market, although past attempts have clearly not driven penetration to high levels.

Most mobile phone and gadget insurance policyholders own a standalone policy, and most policyholders pay for their cover on a monthly basis. However, just under half own insurance cover which is bundled with other financial products (mostly packaged bank accounts for mobile cover and other insurances - most likely home insurance - for gadget cover). 

Other findings from the report include:

  • In 2021, around four-in-ten mobile phone and gadget insurance policyholder acquired their current policy by renewing with their existing provider, with around one-in-five obtaining their policies by switching from one provider to another. In both the mobile and gadget insurance markets, around one-third of policyholders acquired their latest policy by embarking on their first ever customer journey, i.e., they were first time buyers. 
  • Between 2019 and 2021 there has been a significant drop in the percentage of mobile phone insurance policyholder making an insurance claim, a drop which is likely to be related to COVID-19 lockdowns. In both the mobile phone insurance and the gadget insurance markets, a large majority of claimants were satisfied with the outcome of their last insurance claim.
  • Both mobile phone insurance and gadget insurance policyholders put much more emphasis on price rather than cover when they select their insurance. However, the final price paid, and the level of cover achieved by policyholders is often the outcome of policyholder/insurance provider negotiation: most cover holders negotiate with their provider before buying a policy.
  • When taking out mobile phone and/or gadget insurance cover, only a minority of policyholders would sacrifice cover or price in order to buy from a high profile brand. 
  • When looking for insurance deals at the start of a customer journey, price comparison websites (PCWs) are by far the most popular resource for both mobile phone and gadget insurance policyholders. PCWs have also become of more importance recently as channels for insurance sales.

The purchase includes the report and the detailed dataset of all survey results.

Note: Product cover images may vary from those shown

FEATURED COMPANIES

  • AmTrust Europe Limited
  • Aviva Insurance Ltd
  • Chubb European Group SE
  • EE Insurance (BT Group)
  • Great Lakes Insurance
  • Telefónica Insurance S.A

1. Executive Summary

  • A market with growth potential
  • Policyholders are relatively loyal, but the customer merry-go-round still spins
  • Policyholders like to discover deals online, mainly via PCWs
  • Mobile phone and gadget insurance policyholders are price focused
  • Brands are important if the buyer is uncertain
  • Most policyholders have a good experience
  • One-in-ten have claimed in the past year
  • The claims process seems to run smoothly for most
  • Over 12 million own mobile phone insurance

2. Introduction

3. Profile Of Policyholders

  • One-quarter of consumers have mobile insurance
  • Smartphones dominate the market
  • Young affluent consumers the most likely to be insured
  • Consumers prefer standalone insurance, paid for monthly
  • Younger consumers are the most likely to opt for bundled cover
  • Mobile phone and gadget owners like to minimise their risks

4. The Customer Journey Begins

  • Most policyholders have been on a customer journey before
  • The renewal prompt helps kick start the customer journey
  • Renewing is a strong sign of loyalty
  • Older cover holders the most likely to renew their insurance
  • Policyholders who switch continue to be on the lookout for cheaper deals
  • Many of those renewing only do so after starting on a new journey
  • Over half of those renewing without searching still try and get a better deal

5. Buying a Policy: Finding the Right Deal

  • Price Comparison Websites are the primary research resource
  • PCWs will lead next year’s policy search
  • PCWs lead the research but buying direct is the norm

6. Policy Acquisition: Price Negotiation

  • By their nature, policyholders are price sensitive
  • Brands are important if the buyer is uncertain
  • The final price/cover offer is the result of a negotiated settlement
  • Negotiations likely to centre on broad policy features
  • Insurers need to deliver policyholder information in a concise manner

7. Being a Policyholder

  • Getting mobile and gadget cover is easy and satisfying
  • Most policyholders now use online portals to manage their policies
  • Around one-in-ten policyholders have claimed in the past year
  • Claiming is a satisfying and smooth process

8. Market Size and Trends

  • Mobile phones, a near ubiquitous technology
  • Over 12 million own mobile phone insurance
  • A diverse market in terms of brands

List of Figures
Figure 1 The ownership of mobile phones, gadgets and related insurances, 2019/2021
Figure 2 The types of handset owned by consumers, 2019/2021
Figure 3 The penetration of mobile phone and gadget insurance
Figure 4 The type of insurance owned by mobile phone and gadget insurance owners, 2019/2021
Figure 5 Penetration of mobile phone cover by consumer characteristics
Figure 6 Attitudes to buying insurance by mobile phone and gadget owners
Figure 7 How the current mobile phone and gadget insurance policy was acquired, 2019/2021
Figure 8 Factors that helped drive a new customer journey, 2021
Figure 9 Time with current provider by means of policy acquisition, 2021
Figure 10 How mobile phone and gadget insurance was acquired by policyholder groups
Figure 11 Search activity of mobile phone insurance policyholders before renewing
Figure 12 The activities of mobile phone and gadget insurance policyholders who renew at renewal time
Figure 13 The resources consulted before arranging insurance over the past two years, 2019/2021
Figure 14 Where policyholders would look to compare deals and their attitudes to PCWs
Figure 15 From where the last mobile phone/gadget insurance policy was purchased, 2019/2021
Figure 16 Price focus when buying mobile phone/gadget insurance
Figure 17 Brand focus of policyholders
Figure 18 Negotiation with the insurer when taking out a new policy or renewing, 2019/2021
Figure 19 How policyholders read and understand their policy documents,2019/2021
Figure 20 Why policy documentation is not read in full, 2021
Figure 21 How online policyholder portals are used, 2021
Figure 22 The incidence of making a claim in the past year, 2021
Figure 23 Claimant opinion of their last policy claim
Figure 24 The number of mobile phone subscriptions, 2011-2021
Figure 25 The number of adults with mobile phone insurance in their own name
Figure 26 Examples of leading mobile phone insurance providers and underwriters, 2021

Note: Product cover images may vary from those shown

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  • American International Group UK Limited
  • AmTrust Europe Limited
  • Assurant General Insurance Limited
  • Astrenska Insurance Limited
  • Aviva Insurance Ltd
  • Axa (Inter Partner Assistance SA)
  • Better Buy Insurance (Square Pound Limited)
  • Buymobilephoneinsurance.com (Buymobilephone-Ins Ltd)
  • Captain Cover (Lexelle Ltd)
  • Chubb European Group SE
  • CoverCloud (Acumen Insurance Services Ltd)
  • CUSC Foneguard (Pier Insurance Managed Services Limited)
  • EE Insurance (BT Group)
  • Gadget Cover (Insurance Factory Ltd - Markerstudy)
  • Gadgetbuddy.com (ROCK Insurance Services Limited)
  • Great Lakes Insurance 
  • Helpucover (Cardif Pinnacle Insurance Management Services plc)
  • Helvetic Swiss Insurance Co
  • i-Digital (i-Partners Insurance Management Limited)
  • insurance2go (Loyal Insurance Services Ltd)
  • Leisure Guard (Business Brokers Limited)
  • Liberty Mutual Insurance Europe Limited
  • Loveit Coverit (Pier Insurance Managed Services Limited)
  • Mobile Phone Insurance Direct (Pier Insurance Managed Services Limited)
  • Multigadget.Insure (Elliott Slowther Insurance Services Limited t/as A19 Insurance) 
  • Novus Underwriting Limited (Helvetic Swiss Insurance Co)
  • O2 Insurance (Telefónica UK Limited)
  • Protect Your Bubble (Assurant Direct Limited)
  • Row.co.uk (BIG Warranties Ltd)
  • simple insurance (simplesurance GmbH)
  • so-sure (appointed representative of Shepherd Compello Ltd)
  • Starr International (Europe) Limited
  • Switched On Insurance (Taurus Insurance Services Limited)
  • TeamKnowHow Insurance (The Carphone Warehouse Limited)
  • Telefónica Insurance S.A
  • Tesco Mobile
  • Three (Hutchison 3G UK Ltd)
  • Tinhat (Bastion Insurance Services Ltd)
  • Trusted Insurances (Taurus Insurance Services Limited)
  • UK General Insurance Ltd (Great Lakes Insurance SE)
  • Virgin Media
  • Vodafone
  • Watford Insurance Company Europe Limited
  • WDP Insurance Limited
  • White Horse Insurance Ireland Ltd.
  • Zenith Insurance Plc (Markerstudy Group)
Note: Product cover images may vary from those shown
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