May 9, 2021
It’s time to rethink how we offer mobile device insurance
As the eerie quiet of lockdown rolled across our cities and towns, our devices lit up. In the UK, we watched ‘Whitty’, subscribed to steaming services, binged box-sets, jumped around with Joe and rediscovered how it really is ‘good to talk’.
Has the lockdown changed customer attitudes towards mobile device insurance?
Mobiles, tablets and laptops were central to remote working, home-schooling, online-gaming, house-partying and quizzing. They were lifelines to our loved ones, long-distance relationships and long-lost friendships. As we stayed home and stayed connected, the networks saw data usage surge (by 11GB per person a month on average), and figures from Ofcom show the average phone call rose from 3 mins 40 secs before lockdown to 5 mins 30 secs by the end of it.
But did this increased dependence shift our attitudes towards protecting our mobile devices? Or could mobile device insurance become another casualty of lockdown? What do providers need to consider as we move towards a new normal?
Demand for mobile device insurance will quickly return
Whilst claim statistics show that drops, knocks and spills are less likely to happen at home than on the move, they still put a lot of smartphones out of action through lockdown. Loss and theft reduced significantly through the pandemic, but we can expect these risks to rise again as travel restrictions ease.
Our increased reliance on mobile devices is likely to drive strong demand for protection against the cost of repair and replacement. But, with more pressure on household budgets than ever before, value for money is going to come under a keener lens and mobile insurance will need to deliver on its digital promise and keep pace with the requirement from consumers to be always-connected.
To date, the traditional offering has changed little but the explosion in business and consumer connectivity opens the field for the disruptive effort of InsurTech. New technologies will start to play out in the mobile insurance market. AI and machine learning will help shape risk premiums and drive changes in pricing and cover, and devices themselves will be able to detect when they’re damaged trigger a claim.
Customers will no longer accept the slow, cumbersome experiences of before
As we emerge from lockdown and start to shape the new normal, all generations have embraced and adopted digital services at an unprecedented pace. Immediacy will be a non-negotiable demand; people will expect slick processes, a straightforward experience and real-time resolution. Claim forms, call-backs and lengthy repair cycles won’t cut it. To delight customers in this internet-enabled everything, post-Covid climate, insurers need to speed up the customer-facing processes, work and think digitally. Intelligent analytics will drive personalised insurance cover, protect against fraudulent claims and enable fair, risk-based premiums at point of sale AND beyond as a customers’ risk profile develops.
The global phone insurance market was worth US$27bn in 2020 and analysts forecast strong growth in the next five years. InsurTechs are going to set the pace of change in this industry. Consumers want fast, simple, and inexpensive. They’ll get it. Loyalty may play a less substantial role in customers’ decision making with the move to an online marketplace but innovation and reputation will hold customers attention. As data enables innovation around customized solutions and frictionless service solutions, tech will become a key differentiator. People will lose patience with call-waiting times and switch to top-notch technology-driven experiences. Put simply, we’ve developed a digital independence during lockdown. And companies need to #getwiththeprogramme.
If you want to know more about EIP’s digital insurance solutions get in touch with the EIP team. See how our innovative software, powered by automation, is transforming the insurance experience.
Author: Esther Connock (Business Development at EIP Ltd.)
EIP is a market-leading global InsurTech business that delivers digital insurance solutions to Telecoms, Banking and Lifestyle insurance providers. We’re an InsurTech100 company trusted by some of the world’s biggest brands. Learn about EIP and how our end-to-end solutions can transform your scheme management and claims experience.