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

The study draws on extensive primary and secondary research covering 160 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 the UK.

Table Of Contents

Extended Warranties and Insurance for Mobile and Non-Mobile Consumer Products in the UK
TABLE OF CONTENTS
0.0 EXECUTIVE SUMMARY ... 1
1.0 INTRODUCTION 3
What is this report about? .. 3
Rationale . 3
Evolving distribution channels both favour and compromise extended warranty provision ... 3
Methodology ... 4
Manufacturer and retailer survey ... 4
The survey's scope covers 160 manufacturers and retailers of mobile and non-mobile consumer products ... 4
Market data . 4
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 . 7
PartnerBASE and market data annexe 7
Finaccord 8
2.0 WHITE GOODS .. 9
Introduction . 9
Underlying market value and volume.. 10
The value and volume of sales of white goods has increased modestly in recent years . 10
Manufacturers' original warranty length and consumer law... 11
A third of manufacturers offer only one-year original warranties for white goods . 11
Manufacturer schemes for extended warranties and insurance ... 12
Three quarters of manufacturers of white goods maintain an extended warranty scheme… .. 12
…with the great majority making use of Domestic and General as an external partner .. 13
Retailer schemes for extended warranties and insurance . 15
Over a half of retailers of white goods operate an associated extended warranty scheme… . 15
... with Domestic and General again claiming the largest number of partnerships… ... 16
... although with SquareTrade and The Warranty Group providing strong competition 16
Pacifica Group is active via both Corporate Support Solutions and UK Warranty, which it co-owns ... 16
Domestic and General's UK revenues continue to grow at a healthy rate 18
Onex Partners has sold The Warranty Group to TPG Capital, another private equity firm .. 18
The annual turnover of Corporate Support Solutions now exceeds GBP 20 million 18
The merger of Carphone Warehouse and Dixons Retail unites two key players in consumer goods . 18
Services remain an important revenue generator for Dixons Retail .. 18
Risk coverage of all schemes for extended warranties and insurance . 19
A number of extended warranty schemes for white goods also incorporate cover for accidental damage . 19
Independent distribution channels .. 19
Consumers can acquire extended warranties from a variety of different sources… 19
… including multi-appliance warranty specialists such as Warranty Direct… ... 20
… although aggregators appear to be lukewarm about participating in this market… . 20
… and bundled cover with credit cards and AVAs is likely to be a declining market 20
Market value for extended warranties and insurance 20
Market forecasts to 2017 . 22

The white goods market is forecast to experience stronger growth through to 2017… ... 22
...which will help boost the market for related extended warranties ... 23
3.0 BROWN GOODS.. 24
Introduction ... 24
Underlying market value and volume.. 25
The value and volume of sales of brown goods both increased between 2009 and 2013... 25
Manufacturers' original warranty length and consumer law... 26
Two thirds of brown goods manufacturers offer only a one-year guarantee in the UK 26
Manufacturer schemes for extended warranties and insurance ... 27
More than half of manufacturers of brown goods offer some form of extended warranty… 27
...with Domestic and General the only provider working with more than one manufacturer 27
Summit Insurance Services holds an established relationship with Toshiba 29
Retailer schemes for extended warranties and insurance . 29
A significant proportion of retail chains selling brown goods promote related extended warranties... . 29
…with an even wider range of providers identified for brown goods than for white goods… ... 29
…although many of the partnerships are similar 29
SquareTrade (working with UK General and Ageas) is clearly a significant entrant to the market .. 30
Risk coverage of all schemes for extended warranties and insurance . 32
Just under a half of extended warranty schemes for brown goods include cover for accidental damage ... 32
Independent distribution channels .. 32
BIG Warranties uses TV Protect as a separate brand for extended warranties for televisions 32
Market value for extended warranties and insurance 33
Market forecasts to 2017 . 34
The UK's market for brown goods is predicted to experience modest growth between 2013 and 2017... .. 34
… which will help to support the related extended warranty market . 35
4.0 GREY GOODS .. 36
Introduction ... 36
Underlying market value and volume.. 37
The value and volume of the grey goods market both slipped back between 2009 and 2013 37
Manufacturers' original warranty length and consumer law... 38
Almost a half of manufacturers offer three-year original warranties for grey goods in the UK . 38
Manufacturer schemes for extended warranties and insurance ... 39
18 manufacturers run extended warranty schemes but only four feature visible external partners… . 39
… which include AmTrust and The Warranty Group's London General Insurance .. 39
Retailer schemes for extended warranties and insurance . 41
The supply structure for retailer extended warranties for grey goods is fairly fragmented ... 41
Domestic and General is ranked first on an unweighted basis but falls to third in weighted terms .. 41
Risk coverage of all schemes for extended warranties and insurance . 43
Over a half of the 41 extended warranty programs for grey goods include cover for accidental damage ... 43
Independent distribution channels .. 43
Extended warranty cover for grey goods can also be acquired from a number of independent sources… 43
… albeit the main focus of most of these is mobile gadget and phone insurance cover .. 43
Market value for extended warranties and insurance 44
Market forecasts to 2017 . 45
The market for grey goods is forecast to continue its decline between 2013 and 2017... 45
…which is likely to translate into a further contraction of the associated extended warranty market ... 46
5.0 MOBILE GADGETS . 47
Introduction ... 47
Underlying market value and volume.. 48
The value of the UK's mobile gadget market increased by almost 15% between 2009 and 2013 .. 48
Manufacturers' original warranty length and consumer law... 49
Only around a third of mobile gadget manufacturers offer a guarantee of more than one year... 49
Manufacturer schemes for extended warranties and insurance ... 50

A significant number of manufacturer schemes involve external underwriters… . 50
… such as AIG, AmTrust, Domestic and General and London General Insurance… . 50
… although seven manufacturers manage their arrangements on a purely internal basis .. 50
The leading provider changes according to whether viewed in unweighted or weighted terms .. 51
Retailer schemes for extended warranties and insurance . 53
Most extended warranty or insurance programs are run in conjunction with external partners… ... 53
… among which Domestic and General and The Warranty Group claim the most relationships… 53
… although SquareTrade and Asurion are both significant entrants to the market… .. 53
… and Assurant has substantially bolstered its position through acquisition of LSG ... 53
A question mark hangs over what the newly-merged Dixons Carphone will do in future in this arena 53
Several other smaller competitors are also visible… . 54
… and all are joined by Telefónica Insurance as the one visibly active captive underwriter 54
There is no shortage of aspiring providers in this field ... 55
On a worldwide basis, Assurant claims to insure over 15 million mobile devices . 56
Risk coverage of all schemes for mobile gadget insurance .. 57
A majority of mobile gadget schemes offer protection for insurable risks, most commonly accidental damage . 57
Independent distribution channels .. 58
Numerous options exist for consumers to buy mobile gadget insurance through independent channels... 58
…including Assurant's Protect Your Bubble proposition… 58
… and both student insurance specialist Endsleigh and i-Digital .. 58
Supercover Insurance achieved further growth in its annual turnover in its most recent financial year ... 58
Some comparison sites remain active in this sphere but others have exited it or were never present 58
The withdrawal of numerous AVA products means that the bank channel may be on the wane 59
Market value for extended warranties and insurance 59
Market forecasts to 2017 . 61
Both the value and volume of the mobile gadget market will achieve growth through to 2017... . 61
…although the corresponding extended warranty and insurance market is not expected to grow . 62
6.0 MOBILE PHONES 63
Introduction ... 63
Underlying market volumes . 64
In terms of mobile phone subscriptions per capita, the UK market is close to saturation… . 64
... with more than 50 million individuals now believed to own at least one mobile handset .. 65
Manufacturers' original warranty length and consumer law... 66
Nearly two thirds of mobile phone manufacturers offer an original warranty of longer than one year . 66
Manufacturer schemes for mobile phone insurance .. 67
Apple is unique among manufacturers in having an arrangement in this arena… ... 67
Retailer schemes for mobile phone insurance ... 68
… although there are plenty of mobile operator and retailer insurance programs in the UK... . 68
… in a market that appears more fragmented when viewed in unweighted rather than weighted terms 69
The purchase of LSG by Assurant means that Assurant Solutions has acquired two valuable relationships . 69
Asurion is also seeking to expand its position in the UK 69
Via a captive administrator, The Warranty Group continues to work with Phones4U .. 69
Risk coverage of all schemes for mobile phone insurance ... 71
Cover for theft is commonly available but airtime abuse is insured in just one instance .. 71
Independent distribution channels .. 72
The substantial value of this market in the UK has attracted more than a dozen independent providers… ... 72
...some of which are also active in mobile gadget insurance and extended warranties for grey goods .. 72
Insurance aggregators are apparently unconvinced by their prospects in this market… . 72
… and packaging cover with banking products is likely to be falling out of favour 72
Market value for mobile phone insurance ... 73
Market forecasts to 2017 . 74
Mobile phone subscriptions are predicted to rise modestly between 2013 and 2017... ... 74
...which would equate to a mobile handset penetration rate reaching over 82% of the total population.. 75
The continuing growth of smartphones should help buoy the market for mobile phone insurance . 76

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 the UK, 2009, 2013 and 2017 (forecast) .. 2
Approximate market value for extended warranties and insurance linked to mobile and non-mobile consumer products in the UK, 2009, 2013 and 2017 (forecast) (table) .. 2
1.0 INTRODUCTION 3
Organisations researched in the UK, segmented by type, 2014 . 4
Retailers researched in the UK segmented by distribution channel, 2014 . 5
2.0 WHITE GOODS .. 9
Value and volume of sales of white goods in the UK, 2009 and 2013 .. 10
Comparative length of original warranties offered by manufacturers of white goods in the UK, 2014 11
Manufacturer schemes for extended warranties and insurance linked to white goods in the UK: provision rates and operating models, 2014 ... 12
Manufacturer schemes for extended warranties and insurance linked to white goods in the UK: unweighted and weighted provider share of partnerships, 2014 ... 14
Retailer schemes for extended warranties and insurance linked to white goods in the UK: provision rates and operating models, 2014 15
Retailer schemes for extended warranties and insurance linked to white goods in the UK: unweighted and weighted provider share of partnerships, 2014 .. 17
Risk coverage of all schemes for extended warranties and insurance linked to white goods in the UK, 2014 .. 19
Approximate market value for extended warranties and insurance linked to white goods in the UK, 2009 and 2013 ... 21
Value and volume of sales of white goods in the UK, 2013 and 2017 (forecast) . 22
Approximate market value for extended warranties and insurance linked to white goods in the UK, 2013 and 2017 (forecast) .. 23
3.0 BROWN GOODS.. 24
Value and volume of sales of brown goods in the UK, 2009 and 2013 25
Comparative length of original warranties offered by manufacturers of brown goods in the UK, 2014 .. 26
Manufacturer schemes for extended warranties and insurance linked to brown goods in the UK: provision rates and operating models, 2014 ... 27
Manufacturer schemes for extended warranties and insurance linked to brown goods in the UK: unweighted and weighted provider share of partnerships, 2014 ... 28
Retailer schemes for extended warranties and insurance linked to brown goods in the UK: provision rates and operating models, 2014 30
Retailer schemes for extended warranties and insurance linked to brown goods in the UK: unweighted and weighted provider share of partnerships, 2014 ... 31
Risk coverage of all schemes for extended warranties and insurance linked to brown goods in the UK, 2014 .. 32
Approximate market value for extended warranties and insurance linked to brown goods in the UK, 2009 and 2013 ... 33
Value and volume of sales of brown goods in the UK, 2013 and 2017 (forecast) ... 34
Approximate market value for extended warranties and insurance linked to brown goods in the UK, 2013 and 2017 (forecast) .. 35
4.0 GREY GOODS .. 36
Value and volume of sales of grey goods in the UK, 2009 and 2013 ... 37
Comparative length of original warranties offered by manufacturers of grey goods in the UK, 2014 . 38

Manufacturer schemes for extended warranties and insurance linked to grey goods in the UK: provision rates and operating models, 2014 ... 39
Manufacturer schemes for extended warranties and insurance linked to grey goods in the UK: unweighted and weighted provider share of partnerships, 2014 ... 40
Retailer schemes for extended warranties and insurance linked to grey goods in the UK: provision rates and operating models, 2014 41
Retailer schemes for extended warranties and insurance linked to grey goods in the UK: unweighted and weighted provider share of partnerships, 2014 .. 42
Risk coverage of all schemes for extended warranties and insurance linked to grey goods in the UK, 2014 ... 43
Approximate market value for extended warranties and insurance linked to grey goods in the UK, 2009 and 2013 ... 44
Value and volume of sales of grey goods in the UK, 2013 and 2017 (forecast) .. 45
Approximate market value for extended warranties and insurance linked to grey goods in the UK, 2013 and 2017 (forecast) .. 46
5.0 MOBILE GADGETS . 47
Value and volume of sales of mobile gadgets in the UK, 2009 and 2013 48
Comparative length of original warranties offered by manufacturers of mobile gadgets in the UK, 2014 .. 49
Manufacturer schemes for extended warranties and insurance linked to mobile gadgets in the UK: provision rates and operating models, 2014 ... 51
Manufacturer schemes for extended warranties and insurance linked to mobile gadgets in the UK: unweighted and weighted provider share of partnerships, 2014 ... 52
Retailer schemes for extended warranties and insurance linked to mobile gadgets in the UK: provision rates and operating models, 2014 ... 54
Retailer schemes for extended warranties and insurance linked to mobile gadgets in the UK: unweighted and weighted provider share of partnerships, 2014 ... 56
Risk coverage of all schemes for extended warranties and insurance linked to mobile gadgets in the UK, 2014 .. 57
Approximate market value for extended warranties and insurance linked to mobile gadgets in the UK, 2009 and 2013 . 60
Value and volume of sales of mobile gadgets in the UK, 2013 and 2017 (forecast) ... 61
Approximate market value for extended warranties and insurance linked to mobile gadgets in the UK, 2013 and 2017 (forecast) . 62
6.0 MOBILE PHONES 63
Volume of mobile phone subscriptions and subscriptions per capita in the UK, 2009 and 2013 64
Number of individuals owning a mobile phone in the UK and their weighting within the total population, 2009 and 2013 . 65
Comparative length of original warranties offered by manufacturers of mobile phones in the UK, 2014 ... 66
Manufacturer schemes for extended warranties and insurance linked to mobile phones in the UK: provision rates and operating models, 2014 ... 67
Retailer schemes for extended warranties and insurance linked to mobile phones in the UK: provision rates and operating models, 2014 ... 68
Retailer schemes for extended warranties and insurance linked to mobile phones in the UK: unweighted and weighted provider share of partnerships, 2014 ... 70
Risk coverage of all schemes for extended warranties and insurance linked to mobile phones in the UK, 2014 .. 71
Approximate market value and policies in force for extended warranties and insurance linked to mobile phones in the UK, 2009 and 2013... 73
Volume of mobile phone subscriptions and subscriptions per capita in the UK, 2013 and 2017 (forecast) ... 74
Number of individuals owning a mobile phone in the UK and their weighting within the total population, 2013 and 2017 (forecast) . 75
Approximate market value and policies in force for extended warranties and insurance linked to mobile phones in the UK, 2013 and 2017 (forecast) .. 76

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