It’s no secret that device dependency is here to stay. Consumers expect pretty much everything to be available via mobile device, whether it’s their preferred retailer, their bank or even their healthcare provider. Everything is optimized for mobile consumption.
This shift in expectations has positioned the mobile device as one of our most prized and vital possessions. Without our smartphones, our lives are hugely disrupted and many parts of our daily routines are inconvenienced, which makes protecting them that much more important.
With this in mind, smartphone insurance is arguably comparable to home, life or auto insurance these days: it’s a requirement. According to a recent global survey from B2X, one in three US mobile users purchase insurance for their phones, and with the increasing technological advances (and prices) for phones, that statistic will only grow.
Ericsson predicts there will be a whopping 6 billion active smartphone worldwide by 2020 with about 10 percent of them requiring repairs at some point during their digital lifecycle. That is 600 million potential device repairs that need to be executed for those connection-hungry device users. Are they all going to want to pay out of pocket for that expensive care? Probably not.
This reliance on our devices has led to an estimated 10 percent increase in the mobile phone insurance market by 2020, accounting for nearly $50 billion dollars in revenue for the insurance sector. Needless to say, this opportunity is one not to be missed by insurance providers, and they know it.
In an effort to better connect with their end users, insurance providers are listening to consumers and are no longer just accessible via a help hotline or in person. They have leaned into our mobilized way of life via comprehensive apps with a consumer’s needs all in one place. Embracing the expanding trend of self-service is crucial for insurance providers to remain competitive and relevant and, of course, keeping their mobile-savvy customers happy.
The budding relationships between insurers and OEMs, retailers and wireless carriers is growing. Mobile insurances provide new revenue streams for OEMs and carriers/retailers with larger margins. Mobile players need to build long-lasting, strong relationships with their customers by offering a seamless after-sales support process throughout the entire lifecycle of a device, including both in-warranty and out-of-warranty issues. The whole device repair process should be one fluid motion for consumers regardless of the issue or provider. Hence insurers, OEMs, retailers and carriers need to work together to create this unified experience.
It’s no surprise that millennial influence is propelling this exponential growth in mobile device insurance. Analysts estimate that consumers born between the early 1980s and early 2000s have a combined global purchasing power of over $2.45 trillion. And what are they choosing to spend that money on? Devices that make their lives easier. Interest in houses and cars is declining but mobile device purchases are only increasing and becoming further embedded in our daily lives.
Smartphones are right up there with many life necessities in several regions. The keep us connected and enable so many crucial interactions in our daily lives. It only makes sense that we acknowledge the smartphone as another key element that should be cared for and protected, opening a huge window of possibilities for the insurance industry.
Dieter Weisshaar is chief commercial officer for B2X, a provider of customer care services for mobile devices and other consumer electronics to manufacturers, insurance providers, carriers and retailers.