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Mobile Devices Spur Strong Growth For Extended-Coverage Providers


Third-party administrators and their insurance
underwriters appear to have bucked the no- to slowgrowth
trend in CE.

Aided by solid account management and unbridled demand
for mobile devices including tablets, smartphones
and e-readers, the extended-warranty and service-plan
industry’s leading players largely reported robust sales in
2011 and are forecasting another strong year in 2012.

James Mostofi, president of Chartis’ U.S. warranty division,
said his company’s CE service-contract programs
were “exceptionally strong in 2011, predominantly driven
by strong sales in notebooks, e-readers and smartphones”
and gains in its major appliance business. Chartis is expecting
more of the same in 2012, he noted.

Indeed, Chartis and its newly acquired subsidiary Service
Net have experienced a tremendous
mix shift to mobile over the last 24 months. “Sales of service
contracts in mobile devices now represent more than
a larger portion of all active contracts that we administer,”
said Service Net president Chris Smith, with additional
coverage such as theft loss also contributing to rapid
growth in the mobile sector.

Keith Meier, senior VP/general manager for extended
service at Assurant Solutions, reported that “last year was
tremendous for us. We experienced strong double-digit
growth from both new and existing clients, and we feel
really good about 2012” after launching a large new client
in December and nearing the launch of another early this

“Our industry is growing and changing, and we are
poised to lead the way in meeting those changing consumer
expectations,” Meier reflected. “We will continue
to be innovative in 2012 and develop new products and
services that meet consumer demand. We leverage our
consumer insights to help our business and that of our

Those innovations include last year’s introduction of a
next-generation e-portal solution that allows customers
to manage their plans and claims online, and this year’s
release of a MyClaim app that provides consumers with
a new channel to manage their service plans, check the
status of their claims and reschedule service appointments.
“Both of these innovative mobile and web-based
tools meet a growing customer demand for accessibility
and convenience and enhance the customer experience,”
Meier said.

Mike Frosch, president/COO of The Warranty Group’s
North America consumer products unit, said double-digit
growth across virtually every category helped the singlesource
provider for OEMs and retailers hit $1.8 billion in
global revenue last year. “We saw good growth with existing
clients and new growth through the acquisition of new
clients,” including Barnes & Noble for its Nook e-reader.
Also driving growth was strong unit gains and expanded
market share in OEM TV warranties; robust demand for
tablet, PC, smartphone and appliance protection; and
higher attach rates for accidental damage coverage on
portable devices.

Warrantech, a unit of AmTrust Financial Services, similarly
enjoyed double-digit growth in the majority of its business
sectors last year and expects more of the
same in 2012. Newly named CEO Sean Stapleton attributed the growth “to
our continued focus on servicing our existing
account base with strong account management,
sales training and incentivized sales programs.”

Stapleton noted that the company will continue to focus heavily on the mobility market by providing
an innovative suite of product protection offerings on
mobile devices. “There’s no mistaking our nation’s collective
dependence on these types of mobile devices,”
he said. “For many of us, smartphones, tablets and ereaders
have all but replaced office phones, PCs and
books. Without these devices at their fingertips, many
people feel a bit lost.

“Consequently,” he continued, “our product protection
offerings for mobile devices are designed to provide rapid
repair or replacement service to get the devices back into
the hands of their owners, and we will be offering plans
with additional data protection benefits to protect critical
customer data. This segment is and will continue to be a
major focus for us and the clients we serve this year and

Charles Pipia, president of Global Warranty Group
(GWG), described calendar year 2011 as “exceptional”
for the company in terms of revenue growth and expansion
of its North American customer base. GWG signed
a significant number of retailers in the CE, major appliance
and wireless markets, he said, and “successfully introduced
and launched many new exciting products and

GWG has been a major beneficiary of the boom in mobile
products, as wireless and portable CE devices have
long been one of the company’s core business competencies,
Pipia said. He described GWG as a leading provider
of warranty programs for cellphones, smartphones
and tablets, providing programs to more than 8,000 retail
locations throughout the U.S. and Canada.

“The explosive sales growth of these devices has contributed
greatly to the growth of GWG,” he noted.

Looking ahead to the balance of the year, Pipia anticipates
robust growth fueled by “exceptional customer service
and the unparalleled attention to detail we provide
our retailers.”

Jennifer Monasterio, president of Mack Worldwide
Warranty, said the company is “pleased that our business
showed steady growth in 2011. Mack strived to diversify
its product line in order to reach different sectors of the
consumer electronics industry,” she reported, and “offering
coverage for a wider variety of products allowed Mack
to capture a greater market share at times when consumer
spending was low.”

She added that the company is “very optimistic that we
will see modest growth in 2012 while we develop more
innovative products and services.”

In particular, “the increasing popularity of tablets and
smartphones has allowed for even more opportunities to
grow our business,” Monasterio continued. “Mack has implemented accidental damage plans that provide
coverage for all types of wireless devices,” and
has acquired new clients that specialize in the
selling and repair of mobile products.