Mobile Phone Insurance Market Size, Share, Market Research and Industry Forecast Report, 2025 (Includes Business Impact of COVID-19)

                                          
Industry Insights, Market Size, CAGR, High-Level Analysis: Mobile Phone Insurance Market


The global mobile phone insurance market size was valued at USD 18.49 billion in 2018 and is expected to register a CAGR of 12.7% over the forecast period. Increasing incidents of accidental damage, phone thefts, virus infection, and device malfunction are expected to drive the market growth over the forecast period. These incidents have impelled customers to look for ways to safeguard their mobile phones and thereby, adopt mobile phone insurance policies. Mobile phone insurance helps consumers avoid high replacement costs in case their mobile phone is lost or faces a breakdown. A mobile phone insurance policy usually covers physical damage, internal component failure, theft & loss protection, and virus & data protection, among others.

Mobile phones serve as a platform for entertainment, education, and also an effective platform for conducting digital transactions. Increasing use of smartphones for storing personal information and for digital transactions has led to the need for safeguarding mobile devices. This trend is expected to escalate the market growth over the forecast period. According to GSMA, approximately 75% of the total mobile phone owners are expected to own a smartphone by 2025. Mobile phone insurance service providers are collaborating with smartphone manufacturers to experiment with the success rate of insurance policies/schemes offered during the purchase of a mobile phone.

Mobile phones are highly susceptible to physical and technical damages, such as damaged casing, and excessive dust & dirt, which may have a detrimental effect on the Printed Circuit Board (PCB) and components. Such damages may also incur enormous losses for users and hence, are expected to increase the demand for mobile phone insurance over the forecast period. The increasing costs of smartphones are also compelling consumers to opt for mobile phone insurance policies. Furthermore, the increasing collaborations among mobile phone manufacturers and insurance providers are also anticipated to drive market growth over the forecast period. Moreover, the provision of direct-to-consumer insurance assistance is expected to create substantial growth opportunities for mobile insurance providers over the forecast period. Direct-to-consumer insurance assistance model provides improved customer experience as opposed to insurance selling through traditional distribution channels.

The increasing adoption of Business Intelligence (BI) tools by mobile phone insurance companies is anticipated to propel the market growth over the forecast period.  BI tools help mobile phone insurance companies identify negative trends in the costs and performanceof their products. BI is used either strategically or tactically. Strategic business intelligence is used for monitoring Key Performance Indicators (KPIs) pertaining to policy growth, incurred claims ratio, the average time to settle a claim, and so on. KPIs also help evaluate the development of the insurance companies and also enable potential investors to determine the effectiveness of a companys operational strategies. Furthermore, the implementation of BI tools helps insurance companies track data pertaining to customer buying behavior and gain insights on consumer trends, thereby helping them make informed decisions in terms of the services that can be introduced in the mobile phone insurance market.

The complexities associated with the terms & conditions make it difficult for consumers to opt for appropriate claim procedure and this is subsequently expected to hinder the market growth. Some mobile phone insurance providers offer coverage plans with a fixed premium and coverage amount, thus leading to reluctance from customers for buying such policies. Such policies also mandate users to pay huge premium amounts for damage repair, irrespective of the nature of the damages covered. However, in recent years, the insurance providers have worked toward the identification of such issues and have introduced policies with varying monthly premium amounts. They are also offering coverage based on customer requirements. The simplification of terms & conditions and claiming procedure is expected to increase the adoption of mobile insurance plans among customers across the globe.

Coverage Insights

Based on coverage, the mobile phone insurance market is categorized into physical damage, internal component failure, theft & loss protection, virus & protection, and others. The physical damage segment accounted for the highest market share, more than 30%, in 2018. Physical damage protection is the most prominent damage protection plan insured by maximum users since mobile phone devices are highly prone to physical damages such as cracks in the circuit board, screen damages, and so on. Therefore, in recent years, several mobile phone insurance companies have started offering insurance cover for such damages under physical damage plans, which help users avoid paying huge amounts for repair and maintenance.

The loss & theft protection segment is expected to emerge as the second, fastest-growing segment over the forecast period owing to the rapidly increasing incidences of smartphone theft. According to the International Telecommunication Union (ITU), every day around 4,700 to 6,000 smartphones are stolen in Argentina and Peru, respectively. Furthermore, every year, approximately 70 million smartphone theft cases are reported globally. The plans under this segment offer protection against replacement cost, high repair cost, accidental damage, liquid damage, malfunctioning, and display/camera issues.

The internal component failure segment is anticipated to witness considerable growth over the forecast period. The electronic damages are caused by overcharging and voltage fluctuations, among others. The plans in this segment also offer protection against gradual deterioration of electronic components, parts, and accessories. Potential cyberattack threats such as trojans & botnets are compelling users to secure their devices, leading to considerable growth of the virus & protection segment.
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Type Insights of Mobile Phone Insurance Market

Mobile phone insurance companies offer several insurance policies depending on the type of mobile phones such as budget phones, mid & high-end smartphones, and premium smartphones. Premium smartphones are prone to technical and physical damages, which lead to huge losses. In order to protect their smartphone from these losses, users opt for mobile phone insurance. Technical damages such as malfunction of software are common in premium smartphones. In addition to technical damages, theft and hardware damages incur enormous losses for users. The users pay high amounts for the repair of such damages and maintenance of these phones. All the above mentioned factors are expected to result in increased adoption of mobile phone insurance by premium smartphone users.

Though the premium smartphone segment witnessed the highest market share in 2018, over the forecast period the mid-end smartphone segment is anticipated to emerge as the fastest-growing segment owing to the growing penetration of mid-end smartphones. The rapid advancements in technology and decreasing costs of mid-end smartphones are encouraging users to opt for mid-end smartphones than premium smartphones. Thus, mobile phone insurance companies are now heavily capitalizing on insurance plans specific to mid & high-end smartphones. This is expected to drive the growth of the segment over the forecast period.

Regional Insights of Mobile Phone Insurance Market

The North American market is anticipated to account for the largest market share by 2025. The regional market growth can be attributed to the presence of a large number of mobile phone insurance providers and the rising incidences of crimes committed using smartphones in Canada & the U.S. According to the Bureau of Justice Assistance, on an average, more than one million smartphones are stolen in the U.S. every year.Furthermore, the availability of insurance plans that offer additional protection for software malfunctioning and replacement of stolen devices are expected to fuel the regional market growth over the forecast period.

E-tailors such as Flipkart are collaborating with insurance service providers such as Bajaj Allianz to offer mobile phone insurance cover to customers. These initiatives are projected to substantially drive the growth of the Asia Pacific market over the forecast period. Furthermore, China, India, Singapore, and Japan are expected to contribute to the regional market growth. The regional growth can be attributed to the substantial increase in personal disposable income. In 2018, China accounted for the highest market share in the APAC mobile insurance market.

Market Share Insights of Mobile Phone Insurance Market

Some of the prominent players in the market include AmTrust International; Assurant, Inc.; Asurion; AT&T Inc.; Brightstar Corp.; GoCare Warranty Group; Revolut Ltd.; SquareTrade, Inc.; Taurus Insurance Services Limited; and Vodafone Limited. Mobile phone insurance providers are focusing on collaborating with telecommunication operators to increase their regional presence. For instance, in 2018, Assurant, Inc. announced its partnership with KDDI Corporation, a Japanese telecommunications operator. This partnership was undertaken to offer an improved mobile device support program for Apple customers through KDDI Corporation. The program was named Damage and Loss Support with AppleCare Services, which included loss and theft services that allowed replacement of a customers phone with an Apple-certified device, along with next-day replacement service. The program is available to customers via shops or offline stores across the globe as well as via KDDIs online channel.

Segmentations, Sub Segmentations, CAGR, & High-Level Analysis overview of Mobile Phone Insurance Market Research Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, this market research report has segmented the global mobile phone insurance market report on the basis of coverage, phone type, and region:

Coverage Outlook (Revenue, USD Billion, 2019 - 2030)

  
Physical Damage
  
Internal Component Failure
  
Theft & Loss Protection
  
Virus & Data Protection
  
Others

Phone Type Outlook (Revenue, USD Billion, 2019 - 2030)

  
Budget Phones
  
Mid & High-end Smartphones
  
Premium Smartphones