Dallas, TX: ReportsandReports announce Japanese UK Extended Warranty Insurance 2010 Market Research Report in its Store. Browse complete UK Insurance Market Report UK Extended Warranty Insurance 2010 provides a detailed overview of the extended warranty market. The report is divided into two core segments: private motor and household electricals extended warranty. Both sections examine the total market size, retail sales, profitability, claims, distribution, key competitors and forecasts. Scope Highlights The total private motor extended market grew marginally by 1.6% during 2009. Datamonitor has noticed that some dealers which sell motor EW have been more vigorous in the up-selling of this product, as they have experienced a significant fall in car sales and so need to seek other non-sales related revenue. The white goods electricals extended warranty market is the largest because penetration rates are highest in this sector, with many providers estimating penetration at around 25%. Most extended warranty policies are sold at point of sale, although post point of sale sellers are growing in size because customers are researching online for the cheapest coverage. Reasons to Purchase Table of Contents Overview Catalyst Summary Executive Summary The market is divided into private motor and household electricals extended warranty The private motor EW market grew slightly in 2009 Motor EW sales have held up well against the weak used car market The household electricals EW market is considerably larger at £1.2 billion UK consumer expenditure on electrical goods fell by 7% to £20 billion in 2009 Most extended warranty policies are sold at point-of-sale New and used car dealers account for the vast majority of motor EW policies sold Electricals EW is distributed mainly at POS by retailers However, the post-POS market is growing in importance The future of EW sales depend heavily on the state of the car and electricals markets A resurgence in used car sales will drive growth in the private motor extended warranty market The take-up of electricals EW will be low as the electrical retail market will remain weak Market Context Introduction EW insurance provides protection beyond the manufacturer’s base coverage EW insurance offers buyers peace-of-mind Motor warranty policies will pay for the costs associated with replacement parts and labor charges There are a number of similar motor EW products available on the market The private motor EW market was resilient in 2009 The total private motor EW market grew by 1.6% in 2009 to reach £534m In some cases the EW is simply included within the price of the car The market is characterized by insurers, administrators and some customer-facing providers Not all of the motor warranty products sold to customers are insurance-backed Captives represent an efficient way for manufacturers and dealers to control insurance-backed schemes Despite the collapse of the car market, used car motor EW sales have not declined Gross advances for motor finance fell by almost 10% in 2009 As a result of the fall in car sales, the total car parc for 2009 saw minimal growth compared with 2008 Interestingly, the fall in new car sales has helped increase the number of potential EW customers The majority of cars on the road are aged between seven and 10 years Market sentiment is that just over a quarter of all used car sales have an EW policy sold alongside it Improving EW awareness will help providers tap into dormant car owners Customer-facing providers Warranty Direct and Warranty Wise spent a total of £226,233 on advertising in 2009 Providers make a good margin on private motor EW products Over the past few years, claims have been static While suspension parts are the most frequent car fault, electrical related faults dominate EW claims Proposals by the Department for Transport to introduce more 20mph zones without traffic calming measures may reduce claims The recession has prompted many to undertake their own vehicle service, which invalidates EW claims Household appliance EW is sold for a variety of different electricals The electricals EW market is characterized mainly by service contracts The total electricals EW market is expected to have been worth £1.2 billion in 2009 White goods EWs account for the vast share of the total electricals EW market The majority of electricals EWs are service plans, rather than insurance-backed Just over 70% of all electricals EW policies were service plan-backed in 2009 Service-backed schemes are cheaper and more tax efficient for retailers providing electricals EW policies The electricals EW market is very profitable, with many providers able to make at least a 10% margin Price competition in the electricals EW market is not as strong as in the electricals retail market Claims patterns in the electricals EW market are largely predictable UK consumer expenditure on electrical goods fell by 7% to £20 billion in 2009 The UK electricals retail market is dominated mainly by brown goods Audiovisual, IT processing and major household appliances are the largest sub-sectors The electricals market is plagued by considerable price deflation Currently, demand for electricals EW is low and this will remain the case throughout 2010 The stagnant housing market has shrunk demand for white goods The growth in the number of households should continue to benefit the UK electricals market Some electricals retailers are focusing more on non-electricals sales revenue such as EW to boost profits Distribution Introduction Car dealers are the main sellers of motor EW policies New and used car dealers account for the vast majority of motor EW policies sold Distribution of motor EW is expected to see no real changes over the upcoming years Warranty Wise provides motor warranty protection A greater emphasis on educating and training dealers will improve POS distribution of EW policies Electricals EW is distributed mainly at POS by retailers However, the post-POS market is growing in importance Since 2005, the BIS has stipulated that sellers of electricals EW must follow a set of guidelines Electricals specialists dominate the total electricals retailing market The growth of online retail distribution has reduced retailers’ POS advantage Most UK individuals spend between £21 and £50 on electrical goods Insurers should be working more with credit card providers to sell EW insurance Competitive Dynamics Introduction Domestic & General is the largest electrical EW underwriter via its non-POS strategy Allianz Schemes has partnerships with Argos, Amazon and GAME London General Insurance holds the John Lewis contract Car Care Plan is the largest provider of motor EW Cardif Pinnacle distributes car warranties through Warranty Direct Warranty Direct is a customer-facing online provider active in the EW market Mondial Assistance also offers motor manufacturer’s warranty services Insurers are underwriting less EW The insurance-backed market is shrinking The insured market is becoming more concentrated Domestic & General, QBE Europe and London General Insurance all gained market share in 2008 The total insured UK EW market is likely to have returned a COR of 90% EW providers spent £8.5m on advertising, mainly via direct mail Both Domestic & General and DSGi focus their advertising on the direct mail channel The remainder of the market is made up of service providers and administrators The Warranty Group provides motor and electricals warranty products British Gas plans to underwrite all of its household and warranty products DSGi, Argos and Comet are the largest UK electricals retailers DSGi had a total market share of 17.4% in 2009 Argos is the only remaining catalogue retailer in the market, with a share of 11.2% in 2009 Comet’s new product range helped increase its market share by 0.5 percentage points to 8.2% Future Decoded Introduction The motor EW market will grow gradually Initial penetration increases followed by a resurgence in used car sales will drive growth New car registrations are expected to grow by a yearly average of 6.1% over 2010-14 As a percentage of the total car parc, cars aged between four and 10 years will decrease The electricals EW market will shrink slightly in the short term The up-take of electricals EW will rely heavily on the state of the electricals retail market Total consumer expenditure on electrical goods will be lower in 2010 and 2011 APPENDIX Definition Captive insurance Car parc Extended warranty (EW) Franchised dealer Gross premium Independent dealer New car registrations Written premium Brown, white and grey electricals categories Methodology Datamonitor’s European Automotive Markets 2010 Database Financial Services Consumer Insight Survey 2009 Further reading Ask the analyst Datamonitor consulting Verdict research Disclaimer Browse complete UK Insurance Market Report Browse all Banking and Financial Market Browse all Datamonitor Market Research Reports Browse all Latest Reports Related Reports: UK Commercial Insurance Distribution 2010 UK Private Medical Insurance 2010 About Us: Contact:
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