Mobile Insurers Must Adapt to the Changing Mobile Device Insurance Landscape
In the ideal scenario, mobile devices are insured at the point of sale, through the retailer. But the mobile device insurance landscape is rapidly changing, and mobile insurers must be willing to adapt to break past the limited growth potential of traditional mobile insurance plans.
The reality is that in today’s market, mobile device insurance providers are experiencing low attach rates. Mobile device insurance is often viewed as an unattractive proposition by customers due to the low likelihood of having their devices lost or stolen, the inflexible nature of annual contracts, and the complicated and uncertain claims process. Once customers opt out at point-of-sale, it is difficult to recapture them as a customer.
In addition, the current decrease in new device sales across the industry has resulted in significantly fewer mobile insurance subscriptions for new device purchases, making it critical for mobile insurers to develop a new game plan. The one-size-fits-all approach of mobile insurance at point-of-sale is no longer appealing to consumers because they want more choice and value from a plan.
How New Technology Supports the Mobile Insurance and Device Protection Markets
With new device sales decreasing in 2020, device protection for new, used, and refurbished devices is beginning to take market share from traditional insurance products. Mobile insurers can adapt to shifts in the mobile marketplace by using technology to offer both traditional insurance and newer device protection options to customers after point-of-sale. These options can reach those who typically opt out at the time of purchase. This opens a wide array of opportunity for mobile insurers, especially considering the overall global mobile insurance agency is projected to reach $44.1 billion by 2025. With new, on-device technology, mobile insurers can offer remote sign-ups and assess a device’s condition remotely and accurately for new, used, or refurbished devices. Also, a focus on device protection can significantly increase attach rates—not only countering the shrinking new device market, but also simultaneously allowing growth.
With new and more attractive device protection plans being offered to consumers, mobile insurers can follow suit to strengthen their positioning in the marketplace. New technology allows for both in-store and remote sign-ups after point-of-sale and reduces fraudulent claims with remote, accurate device assessments, protecting mobile insurers from considerable risk. Customers can purchase mobile insurance and device protection anytime and anywhere through an app or web browser to protect their device, regardless of the circumstance of loss, in a quick and effective way. Other benefits such as cracked glass protection, automation that removes human error during assessment, and the ability to reach customers in a targeted way through dynamic, in-app pricing, are game-changers in the mobile device market.
Tier-One Carrier from APAC Case Study
When a tier-one mobile carrier in the APAC region decided to move away from the traditional single insurance product and to the device protection market, it garnered extraordinary results. As opposed to the 20–30 percent attach rate they received from marketing traditional insurance products, the company’s switch to offering a device protection product achieved a 65 percent attach rate. Their device protection program held the promise of replacing a customer’s device regardless of the circumstance of the loss with an expedited replacement resolution, crucial for busy customers who rely on their phones.
A Customer-centric Approach is Key
A customer-centric and targeted approach allows mobile insurers to access customers they previously wouldn’t have been able to reach. Customers want more options tailored to their specific needs when it comes to protecting their device. This type of approach can drive large retail partnerships and high attach rates while subsequently driving brand advocacy. With device protection products, customers have a simpler way of protecting their device in comparison to the complicated and time-consuming claims process for mobile insurance plans. Device protection offers more freedom in choosing the type of protection they want based on monthly, subscription-based packages as well as a simple and easy sign-up process.
What You Can Do
Mobile insurers need to focus on providing a service where customer experience is at the center rather than following the traditional insurance approach. Introducing a variety of tailored and bundled product offerings would aid in increasing attach rates and brand loyalty. With new device protection technology, including real-time diagnostics capabilities, insurers can widen their scope and be less rigid with eligibility and claims aspects, without taking on the heightened risk.
Blancco can facilitate accurate on-device assessments to support your device protection plans. To learn how, request your free trial of our Blancco Mobile Insurance app.