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Extended Warranties and Insurance for Mobile and Non-Mobile Consumer Products in the USA 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 the US.

The study draws on extensive primary and secondary research covering 233 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 the US, which is the world's largest market for extended warranties and related insurance.

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 the US 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 the US 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 the USA

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 well over 200 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
Around 1745 million items classifiable as white goods were sold in 2015 11
Manufacturers' original warranty length and consumer law 12
Most manufacturers offer only one-year original warranties for white goods… 12
Manufacturer schemes for extended warranties and insurance 13
… and a half of them have set up extended warranty programs… 13
… most of which are run in conjunction with external partners… 13
…with Assurant especially prominent in the weighted analysis of partnerships 14
Retailer schemes for extended warranties and insurance 16
The vast majority of retailers of white goods operate an associated extended warranty scheme… 16
with AmTrust's Warrantech claiming the highest number of retailer partnerships… 17
… followed by New Leaf Service… 17
albeit Asurion and SquareTrade are ranked most highly in the weighted analysis 17
Combined analysis for manufacturer and retailer schemes 19
Across all schemes, Assurant is likely to be the market leader for extended warranties for white goods 19
Risk coverage of all schemes for extended warranties and insurance 20
Few extended warranty schemes for white goods incorporate cover for accidental damage 20
Independent distribution channels 20
Independent options include Assurant's ProtectYourBubble brand plus Securranty and Upsie 20
Home warranties are important in the context of the US market for extended warranties for white goods 21
‘Fixed by Assurant' has been introduced as a way of repairing out-of-warranty appliances 21
Market value for extended warranties and insurance 22
Market forecasts to 2019 23
The white goods market is forecast to experience stronger growth through to 2019… 23
which will help boost the market for related extended warranties 24
30 BROWN GOODS 25
Introduction 25
Underlying market value and volume 26
Both the value and volume of sales of brown goods increased between 2011 and 2015 26
Manufacturers' original warranty length and consumer law 27
A few manufacturers of brown goods offer original warranties of more than one year… 27
Manufacturer schemes for extended warranties and insurance 28
… but extended warranties are only on offer from around one third of them… 28
with AIG's Service Net and The Warranty Group the only external providers in the category 28
Retailer schemes for extended warranties and insurance 30
Over three quarters of retailers selling brown goods promote related extended warranties 30
…with an even wider range of providers identified for brown goods than for white goods 30
Asurion and SquareTrade seem likely to claim the most significant partnerships 31
Combined analysis for manufacturer and retailer schemes 33
In the combined analysis, three external providers are shown to account for over 50% of the market 33
Risk coverage of all schemes for extended warranties and insurance 34
Over 20% of extended warranty schemes for brown goods include cover for accidental damage 34
Independent distribution channels 34
Independent providers for cover linked to brown goods are the same as those for white goods cover 34
Market value for extended warranties and insurance 35
Market forecasts to 2019 36
By 2019, around 134 million items classifiable as brown goods will be sold in the US… 36
… which will help to support continuing growth in the associated extended warranty market 37
40 GREY GOODS 38
Introduction 38
Underlying market value and volume 39
The value of the grey goods market slipped back between 2011 and 2015 39
Manufacturers' original warranty length and consumer law 40
A quarter of grey goods manufacturers offer original warranties lasting three years 40
Manufacturer schemes for extended warranties and insurance 41
Most manufacturers offering extended warranties do so through internally-managed schemes… 41
… albeit AmTrust and The Warranty Group are both active as external providers 41
Retailer schemes for extended warranties and insurance 43
The supply structure for retailers' extended warranties for grey goods is similar to that for brown goods 43
SquareTrade and Asurion rank first and second, respectively, in both unweighted and weighted terms 43
Best Buy has introduced a policy incorporating cover for accidental damage for the first time 45
Combined analysis for manufacturer and retailer schemes 45
Multiple internally-managed programs produce a fragmented overall market 45
Risk coverage of all schemes for extended warranties and insurance 46
21 out of 55 extended warranty programs for grey goods include cover for accidental damage 46
Independent distribution channels 46
Worth Ave Group offers an additional independent buying option for device owners 46
Market value for extended warranties and insurance 47
Market forecasts to 2019 48
The value of the market for grey goods is forecast to continue declining between 2015 and 2019 48
…which is likely to translate into a further contraction of the associated extended warranty market 49
50 MOBILE GADGETS 50
Introduction 50
Underlying market value and volume 51
The value of the US mobile gadget market almost doubled between 2011 and 2015 51
Manufacturers' original warranty length and consumer law 52
Only a handful of mobile gadget manufacturers offer a guarantee of more than one year 52

Manufacturer schemes for extended warranties and insurance 53
Almost a quarter of manufacturer schemes involve external underwriters… 53
… leaving 20 manufacturers reportedly managing their arrangements on a purely internal basis 53
The Warranty Group benefits from its relationships in this sphere with Motorola, Nook and VIZIO 54
Retailer schemes for extended warranties and insurance 56
Retailer extended warranty or insurance programs are more likely to be run through external partners… 56
… among which Asurion and SquareTrade claim the most relationships 56
… although AIG, AmTrust and Assurant are also significant competitors in this market… 57
… and TPG Capital has become a player through its acquisition of The Warranty Group 57
Several other smaller competitors are also visible… 57
… in addition to a clutch of retailers with internally-managed schemes 57
Combined analysis for manufacturer and retailer schemes 59
The top five providers in the combined analysis are all external insurance underwriters 59
Risk coverage of all schemes for extended warranties and insurance 60
A majority of mobile gadget schemes offer cover for insurable risks, most commonly accidental damage 60
Independent distribution channels 60
Multiple third-party protection schemes are found for mobile gadgets in the US… 60
and the concept of personal possessions insurance is also present 60
Market value for extended warranties and insurance 61
Market forecasts to 2019 63
Both the value and volume of the mobile gadget market will carry on expanding through to 2019 63
…although growth in the related insurance and extended warranty market is likely to be more modest 64
60 MOBILE PHONES 65
Introduction 65
Underlying market volumes 66
Mobile subscriptions per capita are likely to have reached 108 by the end of 2015 66
with close to 250 million individuals owning at least one cellphone 67
Manufacturers' original warranty length and consumer law 68
Only one mobile phone manufacturer offers an original warranty of longer than one year… 68
Manufacturer schemes for extended warranties and insurance 69
… although eight out of 17 investigated offer some type of insurance or extended warranty cover… 69
with three external partners active in this field 70
AmTrust and Apple hold the highest weighted share of partnerships 70
The Warranty Group secured a new relationship with Motorola in July 2015 70
HTC offers 'Uh-Oh' as a complimentary service plan on its smartphones 70
Retailer schemes for extended warranties and insurance 72
Cellphone insurance programs are widespread among network operators and retailers in the US 72
The market appears more fragmented when viewed in unweighted rather than weighted terms 73
with the top eight providers taking under three quarters of unweighted partnerships… 73
but well over 90% of them in the weighted analysis 73
Combined analysis for manufacturer and retailer schemes 75
Asurion and AmTrust hold the top two positions in the combined analysis across all schemes 75
Risk coverage of all schemes for extended warranties and insurance 76
Cover for theft and / or loss is available with a significant proportion of cellphone policies 76
Independent distribution channels 77
The substantial value of this market in the US has attracted a variety of independent providers 77
Market value for extended warranties and insurance 77
Market forecasts to 2019 79
The number of cellphone subscriptions will continue rising between 2015 and 2019 79
which would equate to a cellphone penetration rate reaching over 82% of the total population 80
Both the value and volume of cellphone insurance sales will increase up to 2019 81

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 the US, 2011, 2015 and 2019 (forecast) 2
Approximate market value for extended warranties and insurance linked to mobile and non-mobile consumer products in the US, 2011, 2015 and 2019 (forecast) (table) 2
10 INTRODUCTION 3
Organisations researched in the US, segmented by type, 2015 4
Retailers researched in the US segmented by distribution channel, 2015 6
20 WHITE GOODS 10
Value and volume of sales of white goods in the US, 2011 and 2015 11
Comparative length of original warranties offered by manufacturers of white goods in the US, 2015 12
Manufacturer schemes for extended warranties and insurance linked to white goods in the US: provision rates and operating models, 2015 13
Manufacturer schemes for extended warranties and insurance linked to white goods in the US: unweighted and weighted provider share of partnerships, 2015 15
Retailer schemes for extended warranties and insurance linked to white goods in the US: provision rates and operating models, 2015 16
Retailer schemes for extended warranties and insurance linked to white goods in the US: unweighted and weighted provider share of partnerships, 2015 18
Manufacturer and retailer schemes for extended warranties and insurance linked to white goods in the US: 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 the US, 2015 20
Approximate market value for extended warranties and insurance linked to white goods in the US, 2011 and 2015 22
Value and volume of sales of white goods in the US, 2015 and 2019 (forecast) 23
Approximate market value for extended warranties and insurance linked to white goods in the US, 2015 and 2019 (forecast) 24
30 BROWN GOODS 25
Value and volume of sales of brown goods in the US, 2011 and 2015 26
Comparative length of original warranties offered by manufacturers of brown goods in the US, 2015 27
Manufacturer schemes for extended warranties and insurance linked to brown goods in the US: provision rates and operating models, 2015 28
Manufacturer schemes for extended warranties and insurance linked to brown goods in the US: unweighted and weighted provider share of partnerships, 2015 29
Retailer schemes for extended warranties and insurance linked to brown goods in the US: provision rates and operating models, 2015 31
Retailer schemes for extended warranties and insurance linked to brown goods in the US: unweighted and weighted provider share of partnerships, 2015 32
Manufacturer and retailer schemes for extended warranties and insurance linked to brown goods in the US: combined analysis of weighted provider share of partnerships, 2015 33
Risk coverage of all schemes for extended warranties and insurance linked to brown goods in the US, 2015 34
Approximate market value for extended warranties and insurance linked to brown goods in the US, 2011 and 2015 35
Value and volume of sales of brown goods in the US, 2015 and 2019 (forecast) 36
Approximate market value for extended warranties and insurance linked to brown goods in the US, 2015 and 2019 (forecast) 37

40 GREY GOODS 38
Value and volume of sales of grey goods in the US, 2011 and 2015 39
Comparative length of original warranties offered by manufacturers of grey goods in the US, 2015 40
Manufacturer schemes for extended warranties and insurance linked to grey goods in the US: provision rates and operating models, 2015 41
Manufacturer schemes for extended warranties and insurance linked to grey goods in the US: unweighted and weighted provider share of partnerships, 2015 42
Retailer schemes for extended warranties and insurance linked to grey goods in the US: provision rates and operating models, 2015 43
Retailer schemes for extended warranties and insurance linked to grey goods in the US: unweighted and weighted provider share of partnerships, 2014 44
Manufacturer and retailer schemes for extended warranties and insurance linked to grey goods in the US: combined analysis of weighted provider share of partnerships, 2015 45
Risk coverage of all schemes for extended warranties and insurance linked to grey goods in the US, 2015 46
Approximate market value for extended warranties and insurance linked to grey goods in the US, 2011 and 2015 47
Value and volume of sales of grey goods in the UK, 2013 and 2017 (forecast) 48
Approximate market value for extended warranties and insurance linked to grey goods in the US, 2015 and 2019 (forecast) 49
50 MOBILE GADGETS 50
Value and volume of sales of mobile gadgets in the US, 2011 and 2015 51
Comparative length of original warranties offered by manufacturers of mobile gadgets in the US, 2015 52
Manufacturer schemes for extended warranties and insurance linked to mobile gadgets in the US: provision rates and operating models, 2015 53
Manufacturer schemes for extended warranties and insurance linked to mobile gadgets in the US: unweighted and weighted provider share of partnerships, 2015 55
Retailer schemes for extended warranties and insurance linked to mobile gadgets in the US: provision rates and operating models, 2015 56
Retailer schemes for extended warranties and insurance linked to mobile gadgets in the US: unweighted and weighted provider share of partnerships, 2015 58
Manufacturer and retailer schemes for extended warranties and insurance linked to mobile gadgets in the US: combined analysis of weighted provider share of partnerships, 2015 59
Risk coverage of all schemes for extended warranties and insurance linked to mobile gadgets in the US, 2015 60
Approximate market value for extended warranties and insurance linked to mobile gadgets in the US, 2011 and 2015 62
Value and volume of sales of mobile gadgets in the US, 2015 and 2019 (forecast) 63
Approximate market value for extended warranties and insurance linked to mobile gadgets in the US, 2015 and 2019 (forecast) 64
60 MOBILE PHONES 65
Volume of mobile phone subscriptions and subscriptions per capita in the US, 2011 and 2015 66
Number of individuals owning a mobile phone in the US and their weighting within the total population, 2011 and 2015 67
Comparative length of original warranties offered by manufacturers of mobile phones in the US, 2014 68
Manufacturer schemes for extended warranties and insurance linked to mobile phones in the US: provision rates and operating models, 2015 69
Manufacturer schemes for extended warranties and insurance linked to mobile phones in the US: unweighted and weighted provider share of partnerships, 2015 71
Retailer schemes for extended warranties and insurance linked to mobile phones in the US: provision rates and operating models, 2015 72
Retailer schemes for extended warranties and insurance linked to mobile phones in the US: unweighted and weighted provider share of partnerships, 2015

Manufacturer and retailer schemes for extended warranties and insurance linked to mobile phones in the US: combined analysis of weighted provider share of partnerships, 2015 75
Risk coverage of all schemes for extended warranties and insurance linked to mobile phones in the US, 2015 76
Approximate market value and policies in force for extended warranties and insurance linked to mobile phones in the US, 2011 and 2015 78
Volume of mobile phone subscriptions and subscriptions per capita in the US, 2015 and 2019 (forecast) 79
Number of individuals owning a mobile phone in the US and their weighting within the total population, 2015 and 2019 (forecast) 80
Approximate market value and policies in force for extended warranties and insurance linked to mobile phones in the US, 2015 and 2019 (forecast) 81

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