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

The study draws on extensive primary and secondary research covering 174 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 / furniture / home outlets, speciality retailers and variety retailers). Hence, it provides a comprehensive overview of this activity across Canada.

Key features of this publication include:

- quantification of the market value for extended warranties and insurance linked to mobile and non-mobile consumer products: how much is the market likely to have been worth in Canada in 2015, how did it split between white goods, brown goods, grey goods, mobile gadgets and mobile phones, and to what extent did each of these segments grow or decline in value since 2011?

- 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 and weighted 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: to what extent has this form of distribution developed in Canada and who are the main competitors in this respect?

- forecasts for the value of the market for extended warranties and insurance linked to mobile and non-mobile consumer products up to 2019: 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

Extended Warranties and Insurance for Mobile and Non-Mobile Consumer Products in Canada
TABLE OF CONTENTS
00 EXECUTIVE SUMMARY 1
10 INTRODUCTION 3
What is this report about? 3
Rationale 3
A number of factors are causing dynamics to change in the extended warranty and insurance sector… 3
… including shifts in consumer behaviour… 3
… especially in relation to their use of distribution channels 4
Methodology 4
Manufacturer and retailer survey 4
The survey's scope covers over 170 manufacturers and retailers of the consumer products in scope 4
Market data 5
Distribution channels for retailers 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
Weighted shares 8
PartnerBASE and market data annexe 8
Finaccord 9
20 WHITE GOODS 10
Introduction 10
Underlying market value and volume 11
The value and volume of sales of white goods has increased steadily in recent years 11
Manufacturers' original warranty length and consumer law 12
Over three quarters of manufacturers offer only one-year original warranties for white goods… 12
Manufacturer schemes for extended warranties and insurance 13
… but over two thirds of them promote extended warranties 13
… with AIG, AmTrust, Assurant and The Warranty Group all involved here as external providers… 13
… and with Assurant a likely sector leader among these 14
Intact Financial Corporation took over full control of Comerco Services in August 2015 14
Retailer schemes for extended warranties and insurance 16
Over three quarters of retailers of white goods operate an associated extended warranty scheme… 16
with Comerco Services prominent in both the unweighted and weighted analysis… 17
and with only four other providers taking more than one partnership 17
Asurion, Sears, Assurant and London Drugs rank from second to fifth in the weighted analysis 17
Combined analysis for manufacturer and retailer schemes 19
Intact Financial Corporation emerges from the combined analysis as the probable sector leader 19
Risk coverage of all schemes for extended warranties and insurance 20
Extended warranties for white goods are limited to providing cover for mechanical faults 20
Independent distribution channels 20
Securranty and TAS Canada constitute alternative sources of cover for white goods 20
In Canada, home warranties are less likely to be viewed as a substitute product than in the US 20
Market value for extended warranties and insurance 21
Market forecasts to 2019 22
The white goods market is forecast to experience slightly stronger growth through to 2019… 22

which will help to sustain the market for related extended warranties 23
30 BROWN GOODS 24
Introduction 24
Underlying market value and volume 25
The value of sales of brown goods grew by over CAD 500 million between 2011 and 2015 25
Manufacturers' original warranty length and consumer law 26
Most brown goods manufacturers in Canada offer only a one-year factory guarantee 26
Manufacturer schemes for extended warranties and insurance 27
Four manufacturers of brown goods work with an external partner for their extended warranty schemes… 27
with AIG and The Warranty Group benefiting in this respect 27
Retailer schemes for extended warranties and insurance 29
Extended warranties are quite commonly available from retailers of brown goods in Canada 29
Asurion, Comerco Services and CornerStone United each claim more than one partnership in this field 29
Asurion and Assurant hold the highest weighted partnership shares in this field… 30
Combined analysis for manufacturer and retailer schemes 32
… although they are split by AIG in the combined, weighted analysis 32
Risk coverage of all schemes for extended warranties and insurance 33
Extended warranty schemes for brown goods are mainly restricted to cover for technical faults 33
Independent distribution channels 33
Market value for extended warranties and insurance 34
Market forecasts to 2019 35
Canada's market for brown goods is predicted to carry on growing steadily up to 2019 35
… which will help to support growth in the related extended warranty market 36
40 GREY GOODS 37
Introduction 37
Underlying market value and volume 38
In line with global trends, the value of the grey goods market retreated between 2011 and 2015 38
Manufacturers' original warranty length and consumer law 39
‘All-in-one' computer systems sometimes include three-year manufacturer guarantees 39
Manufacturer schemes for extended warranties and insurance 40
Most manufacturers of grey goods manage their extended warranty programs on an internal basis… 40
… albeit AIG and AmTrust both pick up significant partnerships in this sphere 40
Retailer schemes for extended warranties and insurance 42
The supply structure for retailer extended warranties for grey goods is similar to that for brown goods 42
AIG, Assurant and Asurion account for almost a half of the total in the weighted analysis… 42
Combined analysis for manufacturer and retailer schemes 44
… and they also lead the weighted analysis for manufacturers and retailer programs combined 44
Risk coverage of all schemes for extended warranties and insurance 45
Cover for accidental damage is quite often available with extended warranties for grey goods 45
Independent distribution channels 45
Market value for extended warranties and insurance 46
Market forecasts to 2019 47
The market for grey goods is forecast to continue its decline between 2015 and 2019 47
…which is likely to translate into a further contraction of the associated extended warranty market 48
50 MOBILE GADGETS 49
Introduction 49
Underlying market value and volume 50
The value of the Canadian mobile gadget market increased by over a third between 2011 and 2015 50
Manufacturers' original warranty length and consumer law 51
Most mobile gadget manufacturers limit their original guarantee to just one year 51
Manufacturer schemes for extended warranties and insurance 52
AIG underwrites three out of four programs that are organised via external partners… 52
… making it the leader in the weighted analysis 52
Retailer schemes for extended warranties and insurance 54
Retailer schemes for mobile gadget cover utilise a variety of operating models… 54
… with six external partners benefiting from more than one partnership in this field 54
When viewed in weighted terms, close to a half of partnerships are concentrated with four competitors 55
Combined analysis for manufacturer and retailer schemes 57
AIG and Asurion lead the weighted analysis for manufacturer and retailer schemes together 57
Risk coverage of all schemes for extended warranties and insurance 58
Few mobile gadget policies cover theft or loss but many provide protection against accidental damage 58
Independent distribution channels 58
Market value for extended warranties and insurance 59
Market forecasts to 2019 61
Both the value and volume of the mobile gadget market will achieve growth through to 2019 61
…although the market for related insurance and extended warranty cover is likely to stagnate 62
60 MOBILE PHONES 63
Introduction 63
Underlying market volumes 64
Mobile subscriptions per capita in Canada are likely to exceed 100 during 2016… 64
with over 28 million individuals now owning at least one cellphone 65
Manufacturers' original warranty length and consumer law 66
No cellphone manufacturers offer an original warranty of longer than one year… 66
Manufacturer schemes for extended warranties and insurance 67
… although six promote their own extended warranties 67
AmTrust benefits from its partnerships in this arena with BlackBerry and Microsoft 68
Retailer schemes for extended warranties and insurance 70
A majority of retailer cellphone insurance schemes are organised through one or more external partners… 70
… with Asurion and Brightstar's eSecuritel claiming the most partnerships… 71
and with the former company apparently dominant in the weighted analysis… 71
Combined analysis for manufacturer and retailer schemes 73
… a situation which persists in the combined, weighted analysis for all schemes 73
Risk coverage of all schemes for extended warranties and insurance 74
Most schemes include cover for one or more of accidental damage, theft and loss 74
Independent distribution channels 75
Market value for extended warranties and insurance 75
Market forecasts to 2019 77
Cellphone subscriptions could increase by close to a further 10 million between 2015 and 2019 77
which would equate to a mobile handset penetration rate reaching over 80% of the total population 78
The continuing popularity of smartphones should help buoy the market for cellphone insurance 79
LIST OF GRAPHICS / TABLES
00 EXECUTIVE SUMMARY 1
Approximate market value for extended warranties and insurance linked to mobile and non-mobile consumer products in Canada, 2011, 2015 and 2019 (forecast) 2
Approximate market value for extended warranties and insurance linked to mobile and non-mobile consumer products in Canada, 2011, 2015 and 2019 (forecast) (table) 2
10 INTRODUCTION 3
Organisations researched in Canada, segmented by type, 2015 4
Retailers researched in Canada segmented by distribution channel, 2015 6
20 WHITE GOODS 10
Value and volume of sales of white goods in Canada, 2011 and 2015 11
Comparative length of original warranties offered by manufacturers of white goods in Canada, 2015 12
Manufacturer schemes for extended warranties and insurance linked to white goods in Canada: provision rates and operating models, 2015 13
Manufacturer schemes for extended warranties and insurance linked to white goods in Canada: unweighted and weighted provider share of partnerships, 2015 15
Retailer schemes for extended warranties and insurance linked to white goods in Canada: provision rates and operating models, 2015 16
Retailer schemes for extended warranties and insurance linked to white goods in Canada: unweighted and weighted provider share of partnerships, 2015 18
Manufacturer and retailer schemes for extended warranties and insurance linked to white goods in Canada: combined analysis of weighted provider share of partnerships, 2015 19
Risk coverage of all schemes for extended warranties and insurance linked to white goods in Canada, 2015 20
Approximate market value for extended warranties and insurance linked to white goods in Canada, 2011 and 2015 21
Value and volume of sales of white goods in Canada, 2015 and 2019 (forecast) 22
Approximate market value for extended warranties and insurance linked to white goods in Canada, 2015 and 2019 (forecast) 23
30 BROWN GOODS 24
Value and volume of sales of brown goods in Canada, 2011 and 2015 25
Comparative length of original warranties offered by manufacturers of brown goods in Canada, 2015 26
Manufacturer schemes for extended warranties and insurance linked to brown goods in Canada: provision rates and operating models, 2015 27
Manufacturer schemes for extended warranties and insurance linked to brown goods in Canada: unweighted and weighted provider share of partnerships, 2015 28
Retailer schemes for extended warranties and insurance linked to brown goods in Canada: provision rates and operating models, 2015 29
Retailer schemes for extended warranties and insurance linked to brown goods in Canada: unweighted and weighted provider share of partnerships, 2015 31
Manufacturer and retailer schemes for extended warranties and insurance linked to brown goods in Canada: combined analysis of weighted provider share of partnerships, 2015 32
Risk coverage of all schemes for extended warranties and insurance linked to brown goods in Canada, 2015 33
Approximate market value for extended warranties and insurance linked to brown goods in Canada, 2011 and 2015 34
Value and volume of sales of brown goods in Canada, 2015 and 2019 (forecast) 35
Approximate market value for extended warranties and insurance linked to brown goods in Canada, 2015 and 2019 (forecast) 36

40 GREY GOODS 37
Value and volume of sales of grey goods in Canada, 2011 and 2015 38
Comparative length of original warranties offered by manufacturers of grey goods in Canada, 2015 39
Manufacturer schemes for extended warranties and insurance linked to grey goods in Canada: provision rates and operating models, 2015 40
Manufacturer schemes for extended warranties and insurance linked to grey goods in Canada: unweighted and weighted provider share of partnerships, 2015 41
Retailer schemes for extended warranties and insurance linked to grey goods in Canada: provision rates and operating models, 2015 42
Retailer schemes for extended warranties and insurance linked to grey goods in Canada: unweighted and weighted provider share of partnerships, 2015 43
Manufacturer and retailer schemes for extended warranties and insurance linked to grey goods in Canada: combined analysis of weighted provider share of partnerships, 2015 44
Risk coverage of all schemes for extended warranties and insurance linked to grey goods in Canada, 2015 45
Approximate market value for extended warranties and insurance linked to grey goods in Canada, 2011 and 2015 46
Value and volume of sales of grey goods in Canada, 2015 and 2019 (forecast) 47
Approximate market value for extended warranties and insurance linked to grey goods in Canada, 2015 and 2019 (forecast) 48
50 MOBILE GADGETS 49
Value and volume of sales of mobile gadgets in Canada, 2011 and 2015 50
Comparative length of original warranties offered by manufacturers of mobile gadgets in Canada, 2015 51
Manufacturer schemes for extended warranties and insurance linked to mobile gadgets in Canada: provision rates and operating models, 2015 52
Manufacturer schemes for extended warranties and insurance linked to mobile gadgets in Canada: unweighted and weighted provider share of partnerships, 2015 53
Retailer schemes for extended warranties and insurance linked to mobile gadgets in Canada: provision rates and operating models, 2015 54
Retailer schemes for extended warranties and insurance linked to mobile gadgets in Canada: unweighted and weighted provider share of partnerships, 2015 56
Manufacturer and retailer schemes for extended warranties and insurance linked to mobile gadgets in Canada: combined analysis of weighted provider share of partnerships, 2015 57
Risk coverage of all schemes for extended warranties and insurance linked to mobile gadgets in Canada, 2015 58
Approximate market value for extended warranties and insurance linked to mobile gadgets in Canada, 2011 and 2015 60
Value and volume of sales of mobile gadgets in Canada, 2015 and 2019 (forecast) 61
Approximate market value for extended warranties and insurance linked to mobile gadgets in Canada, 2015 and 2019 (forecast) 62
60 MOBILE PHONES 63
Volume of mobile phone subscriptions and subscriptions per capita in Canada, 2011 and 2015 64
Number of individuals owning a mobile phone in Canada and their weighting within the total population, 2011 and 2015 65
Comparative length of original warranties offered by manufacturers of mobile phones in Canada, 2015 66
Manufacturer schemes for extended warranties and insurance linked to mobile phones in Canada: provision rates and operating models, 2015 67
Manufacturer schemes for extended warranties and insurance linked to mobile phones in Canada: unweighted and weighted provider share of partnerships, 2015 69
Retailer schemes for extended warranties and insurance linked to mobile phones in Canada: provision rates and operating models, 2015 70
Retailer schemes for extended warranties and insurance linked to mobile phones in Canada: unweighted and weighted provider share of partnerships, 2015 72
Manufacturer and retailer schemes for extended warranties and insurance linked to mobile phones in Canada: combined analysis of weighted provider share of partnerships, 2015 73
Risk coverage of all schemes for extended warranties and insurance linked to mobile phones in Canada, 2015 74
Approximate market value and policies in force for extended warranties and insurance linked to mobile phones in Canada, 2011 and 2015 76
Volume of mobile phone subscriptions and subscriptions per capita in Canada, 2015 and 2019 (forecast) 77
Number of individuals owning a mobile phone in Canada and their weighting within the total population, 2015 and 2019 (forecast) 78
Approximate market value and policies in force for extended warranties and insurance linked to mobile phones in Canada, 2015 and 2019 (forecast) 79

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