Expensive gadget insurance sees high traction

With an increase in purchase of expensive gadgets, insurers are seeing a higher traction with a 20% rise in ticket size of policies sold.

Kunal Mahipal, CEO, Onsitego, which offers extended warranty, damage protection, said “We have seen a 20% rise in the ticket size of insurance products since June, 2020. The average ticket size of insurance premium collection stands between Rs 1,500 – 2,500. In device protection services, top categories include smartphones, TVs and laptops. Annual Maintenance Contract (AMC) for air conditioners and water purifiers have seen good traction this year as part of our B2C strategy.”

Gadget insurance is a protection plan where you get protection against accidental damages, water or fluid damage, theft, burglary and fire damage. Gadgets insurance like cell phones, laptops, digital cameras, computers etc. In case, gadget gets stolen, damaged, etc. insurance companies would compensate for the loss, which differs from policy to policy.

In cases of total loss or theft, the residual value after deducting depreciation will be paid to the customer. “On the biggest festive day - Dhanteras – we recorded a 140% growth and acquired 13,000 customers. We have seen a 55% volume growth in Tier 2 & Tier 3, driven by the expansion achieved by our retail partners,” Mahipal said.

Most of our volume comes from metros and Tier I cities, but we have also seen a lot of traction from Tier II and Tier III cities in Madhya Pradesh, Rajasthan, and Tamil Nadu,” he added. Onstiego said it has witnessed improved sales and shoppers from Tier 2 and Tier 3 cities, at the back of growing higher penetration by e-Commerce companies.

Acko General Insurance, which offers a mobile phone insurance cover and an extended warranty cover for selected gadgets, said it has seen a 20-25% increase in ticket size of premium collection, driven by a 50% increase in the sales in premium mobile phones this year. Its senior VP, Anupam Dey said, “We charge about 4-5% of the mobile phone price as the insurance premium. The average ticket size has gone up, as we saw the majority of customers upgraded their mobile phones, laptops, etc as they indulged in work from home. Have seen a 30% increase in sales of gadget insurance covers between January-October, 2020, as compared to the same period last year.” Acko General Insurance company sells over a million gadget insurance covers annually. “We have seen a 30% growth in the premium segment (above Rs 25,000) this year. This could be attributed to more people upgrading to their first smartphones or upgrading to a better model to meet the demands of increased online usage and needs,” Dey said.

Source: The Economic Times