United Kingdom (UK) Extended Warranty Insurance Market Size, Trends, Competitor Dynamics and Opportunities
Summary
This report analyzes the UK extended warranty insurance market, looking at drivers of uptake for both electrical and motor extended warranties. The report goes on to discuss the distribution landscape in 2022, as well as the claims landscape. Incumbent competitors are analyzed, along with their key partnerships. Future impactors on the market - including the cost-of-living crisis, smart home devices, and the changing working environment - are also examined.In 2022e, the total number of policies within the UK extended warranty insurance market reached 8.6 million. As restrictions related to the COVID-19 pandemic caused people to work from home, the value of electrical sales increased by 6.9% in 2021. Meanwhile, demand for extended warranty policies relating to motor increased as purchases of both used and new cars rose. Retailers account for the majority of electrical extended warranty business, with the convenience of purchasing at the point of sale (POS) the main driver. Insurers are the favored channel for motor policies.
Scope
- In 2022e, the number of policies in the UK extended warranty market stood at 8.6 million for all products.
- GlobalData’s 2022 UK Insurance Consumer Survey found that 33%, 38.6%, 25%, and 20.7% of people filed an extended warranty claim for white goods, small appliances, consumer electronics, and motor respectively in 2022.
- Retailers are the most popular channel for electrical products, whereas individuals purchasing extended warranty for motor favor insurers. The majority of purchases are completed online via PC/laptop or smartphone/tablet.
- Analyze growth drivers within the UK extended warranty market.
- Determine areas of concern for insurers and the wider market, including within the claims landscape.
- Recognize the impact of the cost-of-living crisis and inflation on the market.
- Discover the leading players with the extended warranty insurance segment.
- Examine future opportunities and challenges within this space.
- 1. Executive Summary
- 1.1 Market overview
- 1.2 Key findings
- 1.3 Critical success factors
- 2. Introduction
- 2.1 Extended warranties provide protection beyond the manufacturer’s guarantee
- 2.2 Non-insurance-based service agreements account for the majority of the market
- 2.3 Motor and electrical goods are the core retail sectors for the sale of extended warranties
- 3. Market Overview
- 3.1 Macroeconomic impacts on the extended warranty market
- 3.2 Retailers and wholesalers are essential to the success of the extended warranty market
- 3.3 The impact of COVID-19 on the extended warranty market
- 4. How Extended Warranty Insurance is Purchased
- 4.1 The direct channel narrowly leads retailers
- 5. UK Extended Warranty Market Review: Motor and Electricals
- 5.1 The total number of extended warranty policies in the UK stands at 8.6 million
- 5.2 The motor extended warranty market will face pressures on growth
- 5.3 As new car sales fail to grow, the average age of vehicles has risen
- 5.4 The motor extended warranty market is healthy, with a stable claims environment
- 5.5 The dominance of POS capture is being challenged in the electrical goods extended warranty market
- 5.6 The electrical goods market will remain subdued in 2023
- 5.7 White goods account for the largest share of the electrical goods extended warranty market
- 5.8 The market remains highly competitive but profitable
- 6. Competitor Dynamics
- 6.1 D&G dominates the extended warranty market for electrical appliances
- 6.2 Manufacturers and warranty providers are extending their timeframes
- 6.3 Threat from alternative providers
- 7. The Market Going Forward
- 7.1 The cost-of-living crisis will impact consumers’ expenditure
- 8. Appendix
- 8.1 Abbreviations, acronyms, and initialisms
- 8.2 Methodology
- 8.3 Secondary sources
- 8.4 Further reading
- About GlobalData
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- List of Tables
- Table 1: Top electrical retailers in the UK and their underwriting partners
- List of Figures
- Figure 1: Real earnings have been falling since Q2 2021
- Figure 2: Over 85% of consumers are concerned about their current financial situation
- Figure 3: Only one in five individuals anticipate being in the office for more than three days a week
- Figure 4: Retailers lead the electricals market, whereas insurers dominate the motor space
- Figure 5: Online purchases are most common among electrical products
- Figure 6: Convenience is the key purchasing driver in the retailer channel
- Figure 7: Insurers’ good reputation is the most common reason for purchasing via this channel
- Figure 8: Brokers are typically used because consumers feel they can get a better deal
- Figure 9: The total number of policies stands at 8.6 million for key extended warranty products
- Figure 10: Used car sales are increasing as new car sales fall
- Figure 11: The average age of cars in the UK has consistently increased
- Figure 12: The age of vehicles has been increasing in the UK
- Figure 13: Just under a quarter of individuals report claims for motor extended warranty
- Figure 14: The presence of electric vehicles is increasing within the UK motor parc
- Figure 15: Consumer expenditure on electrical goods is expected to have fallen in 2022
- Figure 16: The price of electricals has been increasing over the last few years
- Figure 17: Consumer electronics made up a third of all electrical sales in 2021
- Figure 18: Most individuals purchase white goods extended warranty for washing machines and clothes dryers
- Figure 19: 56.4% of individuals would not purchase insurance from a mobile operator
- Figure 20: Claims frequency is lowest for consumer electronics devices
- Figure 21: Extended warranties compete with gadget insurance for electricals such as tablets and cameras
- Figure 22: Currys remained the leading retailer of electrical goods in 2022e
- Figure 23: Samsung and Apple could pose a threat to extended warranty providers
- Figure 24: Only 40.4% of individuals expect to work full-time at the office going forward
- Figure 25: Forecasting methodology
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