Mobile Phone Insurance Market Size, Share & Trends Analysis Report By Coverage (Physical Damage, Internal Component Failure, Theft & Loss Protection), By Phone Type, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global mobile phone insurance market size was valued at USD 23.3 billion in 2020. It is expected to expand a compound annual growth rate (CAGR) of 12.6% from 2021 to 2028. Increasing incidents of accidental damage, phone thefts, virus infection, and device malfunction are expected to drive 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 coverage 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 coverage failure, theft and loss protection, and virus and data protection, among others.

Mobile phones serve as a platform for entertainment, education, and also an effective platform for conducting digital transactions. Increasing the use of smartphones for storing personal information and digital transactions has led to the need for safeguarding mobile devices. This trend is expected to escalate 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 and dirt, which may have a detrimental effect on the Printed Circuit Board (PCB) and coverages. 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 coverage 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 market players over the forecast period. The 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 market players is anticipated to propel the market growth over the forecast period. BI tools help market players to identify negative trends in the costs and performance of their products. BI is used either strategically or tactically. Strategic business intelligence is used for monitoring Key Performance Indicators (KPIs) about 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 company’s operational strategies. Furthermore, the implementation of BI tools helps companies track data about 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 and conditions make it difficult for consumers to opt for appropriate claim procedures and this is subsequently expected to hinder the market growth. Some market players offer coverage plans with a fixed premium and the 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, 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 and conditions and claiming procedures is expected to increase the adoption of mobile insurance plans among customers across the globe.

The coronavirus pandemic has highly affected the mobile phone/smartphone market, thereby having a significant impact on the market across the globe. While most of the companies operating in the market reported revenue decline from the mobile phone insurance domain, the sales of the smartphones also saw a significant dip in the market. However, with the growing initiatives taken by governments across the globe to revive the economy, the market is anticipated to recover over the coming years. Additionally, the average life span of a smartphone is expected to rise, which in turn will positively impact the market over the forecast period.

Mobile Phone Insurance Market Trends

The ease of availability and portability of a smartphone has made it one of the most preferred devices across the globe. Smartphones offer a wide range of applications and, therefore, have a high level of penetration. Mobile phones were initially used for making calls and sending messages. However, with the introduction of smartphones, the capabilities of phones have extended to video calling, social media browsing, banking, and high-resolution gaming, among others. 

Mobile phone owners often express concerns about the safety of their phones post the expiration of their warranty. The costs associated with the repair and maintenance of damaged smartphones prove to be expensive after the warranty expires. Providing an insurance cover to smartphones saves a lot of money of consumers as the burden of repair cost is delegated to insurance providers. This is expected to boost the growth of the mobile phone insurance market over the forecast period.

Mobile phones often come with warranty to cover the costs of repairing mechanical breakdowns, internal disk crashes, or damages caused to touch sensors, among others. Manufacturers or retailers usually offer a one-year limited warranty, which can be extended by paying an additional fee. However, since the terms and conditions associated with the warranty coverage are stringent and limited, many a time, customers end up bearing the cost of replacing damaged parts. For instance, any liquid damage caused to a cell phone is usually not covered under the manufacturer’s warranty. As a result, customers are favouring insurance over warranty as mobile phone insurance offers various customer-friendly insurance plans with wider coverage scope. The increasing number of mobile phone manufacturers and users has unfolded numerous opportunities for insurance companies to lure customers to opt for cell phone insurance plans. Moreover, as the lifecycle of cell phones is increasing with time, warranties with limited coverage would not be able to satiate the growing customer needs, thereby paving the way for mobile phone insurers to lead the market.

Coverage Insights

Based on coverage, the market is categorized into physical damage, internal coverage failure, theft and loss protection, virus and protection, and others. The physical damage segment accounted for the highest market share of more than 37% in 2020. 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.

Loss and theft protection 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 coverage 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 the gradual deterioration of electronic coverages, parts, and accessories. Potential cyberattack threats, such as trojans and botnets are compelling users to secure their devices, leading to considerable growth of the virus and protection segment.

Phone Type Insights

Mobile phone insurance companies offer several insurance policies depending on the type of mobile phones such as budget phones, mid and high-end smartphones, and premium smartphones. Premium smartphones are prone to technical and physical damages, which lead to huge losses. To protect their smartphone from these losses, users opt for mobile phone insurance. The premium smartphone segment held a market share of over 60% in 2020. 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 2020, the mid-end smartphone segment is anticipated to emerge as the fastest-growing segment over the forecast period owing to the growing penetration of mid-end smartphones globally. 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 and high-end smartphones. This is expected to drive the growth of the segment over the forecast period.

Regional Insights

North America is anticipated to account for a market share of over 34% by 2028. 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 and the U.S. According to the Bureau of Justice Assistance, on 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 is 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 regional market growth over the coming years. This regional growth can be attributed to the substantial increase in personal disposable income. In 2020, China accounted for the highest market share in the Asia Pacific region.

The U.S. mobile phone insurance market registered the fastest CAGR of 11.3% in 2020. U.S. market also held the largest market share of 91.34% in North America. The growth of mobile phone insurance in U.S. is due to the rising theft and crimes committed with the help of smartphones in the U.S.

In 2020, China accounted for the highest market share in the Asia Pacific region. The rising preference of consumer in China to have their mobile phones insured is due to the cheaper pricing and quality of glass provided for the screen of mobile phones in China. For instance, iPhone X series had the glass back for aesthetic effects which was not durable enough. Thus, companies such as Sinosafe launched special iPhone screen insurance in China.

Key Companies & Market Share Insights

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 the replacement of a customer’s 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 KDDI’s online channel. Some prominent players operating in the global mobile phone insurance market are:

• Apple Inc.

• American International Group, Inc.

• Assurant, Inc.

• Asurion

• AT&T Inc.

• AmTrust Financial

• Brightstar Corp.

• GoCare Warranty Group

• SquareTrade, Inc.

• Taurus Insurance Services Limited

Mobile Phone Insurance Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2028. For this study, Grand View Research has segmented the global mobile phone insurance market report based on coverage, phone type, and region:

• Coverage Outlook (Revenue, USD Billion, 2016 - 2028)

  • Physical Damage

  • Internal Component Failure

  • Theft & Loss Protection

  • Virus & Data Protection

  • Others

• Phone Type Outlook (Revenue, USD Billion, 2016 - 2028)

  • Budget Phones

  • Mid & High-end Phones

  • Premium Smartphones

• Regional Outlook (Revenue, USD Billion, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

  • Middle East & Africa (MEA)