Extended Warranties and Insurance for Mobile and Non-Mobile Consumer Products in Brazil is about the market for extended warranties and insurance sold in conjunction with white goods, brown goods, grey goods, mobile gadgets and mobile phones in Brazil.

The study draws on extensive primary and secondary research covering 164 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 Brazil.

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 Brazil, and how does it segment between white goods, brown goods, grey goods, mobile gadgets and mobile phones?

- 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 phones, 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 Brazil?

- forecasts for the market size for extended warranties and insurance linked to mobile and non-mobile consumer products up to 2015: 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?

Table Of Contents

TABLE OF CONTENTS

0 0 EXECUTIVE SUMMARY 1
1 0 INTRODUCTION 3
What is this report about? 3
Rationale 3
The market for extended warranties and insurance for consumer products has been little studied 3
Evolving distribution channels both favour and compromise extended warranty provision 3
Methodology 4
Manufacturer and retailer survey 4
The survey's scope covers 164 manufacturers and retailers of mobile and non-mobile consumer products 4
Market data 4
Distribution channels for retailers 5
Online-only and mixed retail models dominate the distribution of consumer electronic products in Brazil 5
Definitions 6
Extended warranties and insurance 6
Extended warranties and insurance linked to consumer products come in a variety of formats… 6
…and are frequently marketed to consumers under alternative titles 6
Premiums and other revenues 7
Operating models 7
PartnerBASEâ„¢ and market data annexe 8
Finaccord 8
2 0 WHITE GOODS 11
Introduction 11
Underlying market value and volume 12
Sales of white goods grew by over USD 30 billion between 2007 and 2011 12
Manufacturers' original warranty length and consumer law 13
One-year warranties are the standard coverage offered for white goods 13
Brazilian consumer law allows consumers to demand refunds, replacements or discounts 13
Manufacturer schemes for extended warranties and insurance 14
Only three manufacturers offer an extended warranty on white goods… 14
…with domestic warranty specialist Garantec the most prominent partner 14
Retailer schemes for extended warranties and insurance 16
Two thirds of retailers offer extended warranties on white goods 16
A wide variety of operating models are found for retailer extended warranty programs… 16
…although single external partnerships are by far the most common method of provision 16
Risk coverage of all schemes for extended warranties and insurance 18
Coverage for accidental damage is not a common feature of extended warranties 18
Independent distribution channels 18
Extended warranties are available from Garantec away from the point of sale 18
Market value for extended warranties and insurance 19
Market forecasts to 2015 20
The white goods market is forecast to experience continued growth through to 2015… 20
which will help boost the market for extended warranties 21
3 0 BROWN GOODS 22
Introduction 22
Underlying market value and volume 23
The volume of sales of brown goods increased by more than half between 2007 and 2011 23
Manufacturers' original warranty length and consumer law 24
Once again only one manufacturer offers an original warranty of longer than one year 24
Manufacturer schemes for extended warranties and insurance 25
No manufacturer of brown goods in Brazil offers an extended warranty 25
Retailer schemes for extended warranties and insurance 26
Just over a half of retailers promote extended warranties on brown goods… 26
…with the partnerships very similar to those found for white goods 26
Assurant is used by an additional retailer for brown goods in Brazil… 26
…while Cardif joint venture Luizaseg again manages schemes for Magazine Luiza 26
Risk coverage of all schemes for extended warranties and insurance 28
All schemes provide cover against technical or mechanical failure 28
Independent distribution channels 28
Garantec remains the only third-party option for extended warranties for brown goods 28
Market value for extended warranties and insurance 29
Market forecasts to 2015 30
Brazil's market for brown goods is predicted to continue to enjoy strong growth 30
…which should continue to drive growth in the market for extended warranties 31
4 0 GREY GOODS 32
Introduction 32
Underlying market value and volume 33
Brazil's grey goods market value and volume both declined between 2007 and 2011 33
Manufacturers' original warranty length and consumer law 34
More manufacturers offer multi-year warranties for grey goods than they do for brown or white goods 34
Manufacturer schemes for extended warranties and insurance 35
Manufacturers of grey goods that offer extended warranties do so exclusively via internal provision 35
Retailer schemes for extended warranties and insurance 36
External partnership is the preferred extended warranty operating model among grey goods retailers… 36
Risk coverage of all schemes for extended warranties and insurance 38
One third of schemes cover accidental damage to grey goods 38
Independent distribution channels 38
Luma Seguros offers a specialised insurance program for desktop computers 38
Market value for extended warranties and insurance 39
Market forecasts to 2015 40
The market for grey goods is forecast to continue to decline through to 2015 40
…which will translate into a continued contraction of the extended warranty market 41
5 0 MOBILE GADGETS 42
Introduction 42
Underlying market value and volume 43
Brazil's mobile gadget market value doubled between 2007 and 2011 43
Manufacturers' original warranty length and consumer law 44
Almost all manufacturers offer only a one-year warranty for mobile gadgets 44
Manufacturer schemes for extended warranties and insurance 45
Both manufacturer schemes for mobile gadgets in Brazil rely exclusively on internal provision 45
Retailer schemes for extended warranties and insurance 46
More retailers offer coverage for mobile gadgets than for brown or grey goods 46
Risk coverage of all schemes for mobile gadget insurance 48
The great majority of coverage is limited to mechanical or technical fault only 48
Independent distribution channels 49
Brazilian insurer Porto Seguro leads the field for independent mobile gadget cover 49
Market value for extended warranties and insurance 50
Market forecasts to 2015 51
The mobile gadget market is forecast to continue its strong growth through to 2015 51
…with the corresponding extended warranty and insurance market forecast to grow commensurately 52
6 0 MOBILE PHONES 53
Introduction 53
Underlying market volumes 54
The volume of mobile phone subscriptions doubled between 2007 and 2011 54
while the number of individuals in possession of a mobile phone also experienced substantial growth 55
Manufacturers' original warranty length and consumer law 56
No manufacturer of mobile phones offers an original warranty of longer than one year 56
Manufacturer schemes for mobile phone insurance 57
Only Nokia distributes extended mobile phone cover 57
Retailer schemes for mobile phone insurance 58
Just over half of retailers investigated sell extended coverage for mobile phones 58
External providers hold by far the largest share of partnerships… 58
…with Garantec, Cardif and MAPFRE the most frequently named insurers 58
Risk coverage of all schemes for mobile phone insurance 60
Coverage for call fraud or airtime abuse is not a feature of retailer-distributed insurance programs in Brazil 60
Independent distribution channels 61
Coverage options for mobile phones differ slightly from those for mobile gadgets 61
Market value for mobile phone insurance 62
Market forecasts to 2015 63
Mobile phone subscriptions are forecast to increase by almost 20% between 2011 and 2015 63
which would equate to a penetration rate among consumers reaching 80% 64
Increasing take-up and market penetration should help buoy the mobile phone insurance market 65

LIST OF GRAPHICS / TABLES
0 0 EXECUTIVE SUMMARY 1
Approximate market value for extended warranties and insurance linked to mobile and non-mobile consumer products in Brazil, 2011 and 2015 (forecast) 2
1 0 INTRODUCTION 3
Organisations researched segmented by type 5
Retailers segmented by distribution channel, 2012 6
2 0 WHITE GOODS 11
Comparative length of original warranties offered by manufacturers of white goods in Brazil, 2012 13
Manufacturer schemes for extended warranties and insurance linked to white goods in Brazil: provision rates, operating models and provider share of non-captive partnerships, 2012 15
Retailer schemes for extended warranties and insurance linked to white goods in Brazil: provision rates, operating models and provider share of non-captive partnerships, 2012 17
Risk coverage of all schemes for extended warranties and insurance linked to white goods in Brazil, 2012 18
Approximate market value for extended warranties and insurance linked to white goods in Brazil, 2011 19
Value and volume of sales of white goods in Brazil, 2011 and 2015 (forecast) 20
Forecast market value for extended warranties and insurance linked to white goods in Brazil, 2015 21
3 0 BROWN GOODS 22
Comparative length of original warranties offered by manufacturers of brown goods in Brazil, 2012 24
Retailer schemes for extended warranties and insurance linked to brown goods in Brazil: provision rates, operating models and provider share of non-captive partnerships, 2012 27
Risk coverage of all schemes for extended warranties and insurance linked to brown goods in Brazil, 2012 28
Approximate market value for extended warranties and insurance linked to brown goods in Brazil, 2011 29
Value and volume of sales of brown goods in Brazil, 2011 and 2015 (forecast) 30
Forecast market value for extended warranties and insurance linked to brown goods in Brazil, 2015 31
4 0 GREY GOODS 32
Comparative length of original warranties offered by manufacturers of grey goods in Brazil, 2012 34
Manufacturer schemes for extended warranties and insurance linked to grey goods in Brazil: provision rates and operating models, 2012 35
Retailer schemes for extended warranties and insurance linked to grey goods in Brazil: provision rates, operating models and provider share of non-captive partnerships, 2012 37
Risk coverage of all schemes for extended warranties and insurance linked to grey goods in Brazil, 2012 38
Approximate market value for extended warranties and insurance linked to grey goods in Brazil, 2011 39
Value and volume of sales of grey goods in Brazil, 2011 and 2015 (forecast) 40
Forecast market value for extended warranties and insurance linked to grey goods in Brazil, 2015 41
5 0 MOBILE GADGETS 42
Comparative length of original warranties offered by manufacturers of mobile gadgets in Brazil, 2012 44
Manufacturer schemes for extended warranties and insurance linked to mobile gadgets in Brazil: provision rates and operating models, 2012 45
Retailer schemes for extended warranties and insurance linked to mobile gadgets in Brazil: provision rates, operating models and provider share of non-captive partnerships, 2012 47
Risk coverage of all schemes for mobile gadget insurance in Brazil, 2012 48
Approximate market value for extended warranties and insurance linked to mobile gadgets in Brazil, 2011 50
Value and volume of sales of mobile gadgets in Brazil, 2011 and 2015 (forecast) 51
Forecast market value for extended warranties and insurance linked to mobile gadgets in Brazil, 2015 52
6 0 MOBILE PHONES 53
Volume of mobile phone subscriptions and subscriptions per capita in Brazil, 2007 and 2011 54
Number of individuals owning a mobile phone in Brazil and their weighting within the total population, 2007 and 2011 55
Comparative length of original warranties offered by manufacturers of mobile phones in Brazil, 2012 56
Manufacturer schemes for mobile phone insurance in Brazil: provision rates and operating models, 2012 57
Retailer schemes for mobile phone insurance in Brazil: provision rates, operating models and provider share of non-captive partnerships, 2012 59
Risk coverage of all schemes for mobile phone insurance in Brazil, 2012 60
Approximate market value and policies in force for mobile phone insurance in Brazil, 2011 62
Volume of mobile phone subscriptions and subscriptions per capita in Brazil, 2011 and 2015 (forecast) 63
Number of individuals owning a mobile phone in Brazil and their weighting within the total population, 2011 and 2015 (forecast) 64
Forecast market value and policies in force for mobile phone insurance in Brazil, 2015 65

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