Finaccord: Mobile phone insurance policies can innovate by adding cyber protection

14 September 2021 — Daniela GHETU
While people increasingly depend on their mobile phones, threat of cyber-attack is increasing, most consumers remaining unprotected from the risk of malware attacks or fraudulent use of their phones because mobile phone protection is usually limited to the sort of cover offered by extended warranties, a Finaccord report said.

The reports published by Finaccord on mobile phone insurance and extended warranties are covering 35 countries globally. It identified 1,052 policies for mobile phones and analyzed their risk coverage split between cover against technical breakdown, accidental damage, loss, fraudulent calls, fraudulent use of an e-wallet and viral attack.

There were just six out of these 35 countries where 10% or more of policies offered protection against at least one of fraudulent calls, fraudulent use of an e-wallet and viral attack. Cover for viral attack was available in just 28 out of these 1,052 policies, or 3% of the total, and many of these cases were concentrated in India and Poland, where 21% and 23% of policies included this form of protection. Cover against fraudulent calls or fraudulent use of an e-wallet was most common in the UK (34% and 17% of policies respectively), while at least one of these risks was covered by between 10% and 20% of policies in Australia, Italy, Russia, South Africa and Spain. Aside from offering greater protection to consumers against emerging cyber threats, policies offering this type of cover benefit insurance providers by turning an extended warranty with a fixed lifespan of a couple of years into a policy that can be renewed indefinitely.

The report also lists which companies underwrite mobile phone insurance and extended warranty policies. Assurant and Allianz have the greatest number of these partnerships, but when weighted by their importance of their distributors, Finaccord found that Asurion took first place ahead of Assurant.

In addition, the report estimates the total value of this market worldwide and by country, in terms of revenues and number of policies, from a global base of 5.6 billion mobile phone subscribers. Enzo Guzzi, author of the report, commented that "the market for mobile phone insurance and extended warranties has grown constantly in recent years, fueled by the spread of smartphones and the increasing cost of handsets. Now that many mobile phone markets are effectively saturated, providers need to increase the take-up rate for cover through new distribution partnerships and product innovation in order to maintain recent growth rates."

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