Extended Warranties and Insurance for Non-Mobile Consumer Products in Europe:

Extended Warranties and Insurance for Non-Mobile Consumer Products in Europe

Product Type: Market Research Report
Published by: Finaccord Ltd.
Published: October 2008
Product Code: R3434-160

Description

Finaccord’s report titled Extended Warranties and Insurance for Non-Mobile Consumer Products in Europe, is a report about the market for extended warranties and related insurance sold in conjunction with white goods, brown goods and furniture in ten countries in Europe: Belgium, the Czech Republic, France, Germany, Italy, the Netherlands, Poland, Spain, Sweden and the UK. The definition of white goods incorporates kitchen appliances such as dishwashers, refrigerators and washing machines while brown goods take in audio-visual entertainment products such as DVD players, radios and televisions, including LCD and plasma televisions.

The report draws on extensive primary and secondary research covering 820 organisations involved in the production and distribution of white goods, brown goods and furniture including 345 manufacturers, 278 retailers with an extensive network of ‘bricks and mortar’ outlooks and 197 retailers oriented primarily towards online sales and / or home shopping. A number of factors combine to form a firm rationale for a published report and database about extended warranties and insurance for non-mobile consumer products in Europe among which is the fact that this is the first published work on the subject on a pan-European basis.

This is curious given the fact that the market for extended warranties and insurance linked to white goods, brown goods and furniture is estimated by Finaccord to have been worth as much as €2.18 billion across the ten countries in question in 2007. The report and the PartnerBASE that accompanies it can be used in one or more of the following ways: - appreciate the size of the opportunity in the market for extended warranties and insurance linked to white goods, brown goods and furniture in Europe: in aggregate, this is a substantial market; - understand how dynamic competitors are helping the sector to grow at a rate well in excess of the underlying markets for non-mobile consumer products in a number of countries ; - assess the position of international competitors such as Domestic & General, Finaref Assurances, Moderna Försäkringar, SPB and The Warranty Group as well as more nationally focused protagonists such as Actua Assurantiën, Estendo, HomeServe, SFG and Wertgarantie; - evaluate the apparent influence of multi-appliance warranties and warranties packaged with bank accounts and payment cards in the UK and how these could develop elsewhere in Europe; - consider how extended warranty and related insurance programs are being rendered more valuable and user-friendly from the point of view of customers.

Please note: This is delivered as a Zip file including both a PDF and an Excel file.

Table of Contents

0.0 EXECUTIVE SUMMARY: The market across ten European countries was worth approximately €2.18 billion in 2007…; … within which warranties and insurance linked to brown goods account for the lion’s share…; … with this segment also likely to have been the most rapidly growing between 2003 and 2007; Extended warranty schemes operated by manufacturer brands are most widespread in the UK; Retailer warranty programs often incorporate protection in the event of accidental damage…; … and are more likely to be run in conjunction with an external insurance company or broker; A number of factors will assist continuing growth in the warranty and insurance market…; … including the launch of new schemes, improved cross-selling and product innovation; The dynamics of the warranty and insurance market are complicated by a range of factors…; … including the growing use of the Internet as a sales channel for white and brown goods; Use of remote distribution interfaces and alternative marketing approaches could also grow
1.0 INTRODUCTION: Rationale; Most published data focuses disproportionately on the underlying consumer product markets…; … ignoring the fact that manufacturers and retailers can make large profits from warranties; Warranties and insurance linked to mobile devices are covered in separate research publications; Evolving distribution channels both favour and compromise extended warranty provision; Finaccord; PartnerBASE™; Methodology; The survey extends to 820 manufacturers and retailers of non-mobile consumer products; Definitions; Warranty and insurance products for non-mobile consumer goods come in a variety of formats…; … and are frequently marketed to consumers under alternative titles; Errors, omissions and limit of liability
2.0 EUROPEAN OVERVIEW: Introduction; Underlying market data; White goods; The market for white goods is mature and slow-growing in most European territories; Households in Belgium make the highest annual average expenditure on white goods; Brown goods; The popularity of LCD and plasma televisions boosts the European market for brown goods; On average, households in the Czech Republic commit the least expenditure to brown goods; Furniture; With a value of €27 billion in 2007, Germany is by far Europe’s largest market for furniture…; … with average expenditure per household more than eight times that of neighbouring Poland; Manufacturer extended warranty programs for white and brown goods; Manufacturer warranty schemes are most widespread in Belgium, Italy, Spain and the UK…; … although it is only in the UK that protection ever includes cover for accidental damage; Most manufacturer brands adhere primarily to a captive model for extended warranty programs; Retailer extended warranty programs for white and brown goods; Retailers in France are most likely to have developed their own extended warranty schemes; In five countries, at least a half of retailer programs incorporate cover for accidental damage; Retailers adhere to a broad range of operating models for their extended warranty programs; Retailer extended warranty programs for furniture; Extended protection programs for furniture exist in five out of the ten countries…; … and are always organised by means of one of two operating models; Market size for warranties for white goods, brown goods and furniture; Overview; Across ten European countries, the total market size is worth in excess of €2.18 billion; White goods; Much of the value of the market for warranties for white goods is due to France and the UK…; … and four out of the ten countries stand out as having relatively developed markets in this area; Brown goods; There is apparent scope for extended warranties linked to brown goods to develop in future…; … especially in markets such as the Czech Republic, Italy, Poland and Spain; Furniture; Extended warranties linked to furniture add up to a much smaller market at present…; … as a consequence of several factors which limit its potential to develop; Growth rates; In general, markets for warranties linked to brown goods have been growing most rapidly
3.0 BELGIUM: Introduction; Research scope; Underlying market data; Growth in sales of white and brown goods outstrips growth in sales of furniture in Belgium; Survey results - white and brown goods; Manufacturer extended warranty schemes; Over a half of major manufacturer brands in Belgium possess an extended warranty scheme; Retailer extended warranty schemes; Several major Belgian retailers operate extended warranty schemes through external partners…; … with CAP.Protection identifiable as a prominent indigenous protagonist; Survey results - furniture; Retailer extended warranty schemes; Extended protection programs for furniture have been introduced to the Belgian market; Survey results - average prices; On average, extended warranties in Belgium are slightly less expensive than in the UK; Market size; Belgium hosts the sixth largest market for warranties linked to non-mobile products in Europe
4.0 CZECH REPUBLIC: Introduction; Research scope; Underlying market data; Sales per household of brown goods are low in comparison to those for white goods and furniture; Survey results - white and brown goods; Manufacturer extended warranty schemes; Several manufacturers offer free warranty extensions as a part of promotional packages; Retailer extended warranty schemes; Thus far, two major retail chains have introduced extended warranties to the Czech Republic; Survey results - average prices; On average, extended warranties in the Czech Republic are significantly cheaper than in the UK; Market size; The Czech market for extended warranties remains at a very early stage of development
5.0 FRANCE: Introduction; Research scope; Underlying market data; Sales of brown goods comfortably outgrow sales of white goods and furniture in France; Survey results - white and brown goods; Manufacturer extended warranty schemes; The majority of manufacturers operating warranty schemes do so on a purely internal basis; Retailer extended warranty schemes; Major French retailers utilise a variety of operating models when organising extended warranties; SFG states that it is growing its business at an average rate of growth per annum of around 20%; SPB and Finaref have introduced innovative new guarantees to the French warranty market; Survey results - furniture; Retailer extended warranty schemes; Where offered, extended guarantees are usually offered at no extra charge to customers; Survey results - average prices; On average, extended warranties in France are slightly less expensive than in the UK; Market size; Extended warranties sold in conjunction with brown goods take the largest slice of the market
6.0 GERMANY: Introduction; Research scope; Underlying market data; Sales of white goods, brown goods and furniture achieve virtually no real growth in Germany; Survey results - white and brown goods; Manufacturer extended warranty schemes; Only Domestic & General and Wertgarantie have established manufacturer relationships; Retailer extended warranty schemes; Around a half of Germany’s major retailers of white and brown goods operate warranty schemes; KarstadtQuelle Versicherung is active in the market on behalf of three KarstadtQuelle brands; Survey results - average prices; On average, extended warranties in Germany are a great deal cheaper than in the UK; Market size; The German warranty market size splits more or less evenly between white and brown goods
7.0 ITALY: Introduction; Research scope; Underlying market data; Consumer expenditure on white goods, brown goods and furniture reaches €22.34 billion in 2007; Survey results - white and brown goods; Manufacturer extended warranty schemes; Almost a half of manufacturer brands surveyed in Italy operate extended warranty schemes; Retailer extended warranty schemes; Italy’s market for extended warranties has experienced substantial development in recent years; Estendo, which was founded in 2004, has clearly been an important protagonist in this respect; Survey results - furniture; Retailer extended warranty schemes; Extended protection programs for furniture appear to be rare in the Italian market; Survey results - average prices; On average, extended warranties in Italy are significantly less expensive than in the UK; Market size; The value of the extended warranty market is likely to have developed rapidly in recent years
8.0 NETHERLANDS: Introduction; Research scope; Underlying market data; Sales of white goods, brown goods and furniture were valued at around €7.33 billion in 2007; Survey results - white and brown goods; Manufacturer extended warranty schemes; The majority of manufacturers operating warranty schemes do so on a purely internal basis; Retailer extended warranty schemes; Actua Assurantiën has established a position of dominance in the extended warranty market; Survey results - furniture; Retailer extended warranty schemes; Several major furniture retailers in the Netherlands offer furniture protection programs; Survey results - average prices; On average, extended warranties in the Netherlands are slightly less costly than in the UK; Market size; The Dutch market size is the fourth largest among the ten territories covered by the investigation
9.0 POLAND: Introduction; Research scope; Underlying market data; Sales of white goods in Poland surge ahead at an average rate per annum of 26.5%; Survey results - white and brown goods; Manufacturer extended warranty schemes; Free warranty extensions are offered by several manufacturers as a part of periodic promotions; Retailer extended warranty schemes; Several major Polish retailers of electronic goods have launched extended warranty schemes; Survey results - average prices; On average, extended warranties in Poland are significantly cheaper than in the UK; Market size; Poland’s market for extended warranties is developing from a comparatively low base
10.0 SPAIN: Introduction; Research scope; Underlying market data; The Spanish market for white goods, brown goods and furniture reaches €13.62 billion in 2007; Survey results - white and brown goods; Manufacturer extended warranty schemes; Over a half of the 35 manufacturers surveyed in Spain operate extended warranty programs; Retailer extended warranty schemes; Several providers are attempting to develop Spain’s extended warranty market; Survey results - average prices; On average, extended warranties in Spain are substantially cheaper than in the UK; Market size; Insurance and warranties linked to white goods account for around 60% of Spain’s market value
11.0 SWEDEN: Introduction; Research scope; Underlying market data; The markets for white and brown goods record average annual growth in upper single digits; Survey results - white and brown goods; Manufacturer extended warranty schemes; Just two manufacturers of white or brown goods possess their own extended warranty schemes; Retailer extended warranty schemes; Sweden’s larger retailers of brown and white goods operate schemes for extended warranties…; … with Solid Forsäkring among the foremost partners of retailers in this field…; … although the link of Moderna Försäkringar with DSG International is producing rapid growth; Survey results - average prices; On average, extended warranties in Sweden are a great deal cheaper than in the UK; Market size; Sweden’s market for insurance and warranties linked to non-mobile products is relatively small
12.0 UNITED KINGDOM: Introduction; Research scope; Underlying market data; Sales of brown goods substantially outpace sales of white goods and furniture in the UK; Impact of the Competition Commission enquiry; The Competition Commission enquiry has caused retailers to review their sales practices…; … in the wake of recommendations aiming to rectify a distortion of normal competition; Survey results - white and brown goods; Manufacturer extended warranty schemes; Domestic & General is by far the most prolific partner of manufacturer brands in the UK…; … although Homeserve is keen to become an enduring force in the UK warranty market…; … and considered acquiring Domestic & General during 2007 before shelving the plan; Retailer extended warranty schemes; Domestic & General faces a broader array of competitors in the market for retailer schemes; Domestic & General perceives strong potential in expanding its business in international markets ....; Survey results - furniture; Retailer extended warranty schemes; Furniture protection programs are quite commonly offered by furniture retailers in the UK; Valspar’s Guardsman operation offers a variety of services oriented to furniture care in the UK; Survey results - average prices; The average price of extended warranties in the UK is high by the standards of continental Europe .; Market size; The size of the UK market offers a guide to the development potential in other countries; Distribution interfaces and channels used for extended warranties; Some potential exists to sell warranties through alternative distribution channels and interfaces… ....; … as shown by the progress made by Warranty Direct, acquired by Cardif Pinnacle in April 2008 ....; Alternative marketing approaches used for extended warranties; Multi-appliance warranties and packaging with banking products are increasingly influential
GRAPHICS / TABLES: Organisations covered by the research segmented by type and by country; Value of sales of white goods in Europe, 2003-7; Value of sales of white goods in Europe, 2003-7 (data); Value of sales per household of white goods in Europe, 2003-7; Value of sales per household of white goods in Europe, 2003-7 (data); Value of sales of brown goods in Europe, 2003-7; Value of sales of brown goods in Europe, 2003-7 (data); Value of sales per household of brown goods in Europe, 2003-7; Value of sales per household of brown goods in Europe, 2003-7 (data); Value of sales of furniture in Europe, 2003-7; Value of sales of furniture in Europe, 2003-7 (data); Value of sales per household of furniture in Europe, 2003-7; Value of sales per household of furniture in Europe, 2003-7 (data); % of manufacturers of white and brown goods offering extended warranties, 2008; % of extended warranties offered by manufacturers of white and brown goods covering accidental damage, 2008; Operating models used for extended warranties offered by manufacturers of white and brown goods, 2008; Operating models used for extended warranties offered by manufacturers of white and brown goods, 2008 (data); % of retailers of white and brown goods offering extended warranties, 2008; % of extended warranties offered by retailers of white and brown goods covering accidental damage, 2008; Operating models used for extended warranties offered by retailers of white and brown goods, 2008; Operating models used for extended warranties offered by retailers of white and brown goods, 2008 (data); % of retailers of furniture offering extended warranties, 2008; Operating models used for extended warranties offered by retailers of furniture, 2008; Operating models used for extended warranties offered by retailers of furniture, 2008 (data); Approximate value of the market for extended warranties for white goods, brown goods and furniture in Europe, 2007; Approximate value of the market for extended warranties for white goods in Europe split by country, 2007; Approximate value of the market for extended warranties for white goods as a percentage of the value of sales of white goods in Europe split by country, 2007; Approximate value of the market for extended warranties for brown goods in Europe split by country, 2007; Approximate value of the market for extended warranties for brown goods as a percentage of the value of sales of brown goods in Europe split by country, 2007; Approximate value of the market for extended warranties for furniture in Europe split by country, 2007; Approximate value of the market for extended warranties for furniture as a percentage of the value of sales of furniture in Europe split by country, 2008; Approximate average annual growth rates of markets for extended warranties for non-mobile consumer products in Europe split by country, 2003-7 (data); Total value of sales of white goods, brown goods and furniture in Belgium, 2003-7; Value per household of sales of white goods, brown goods and furniture in Belgium, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in Belgium, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in Belgium, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by retailers in Belgium, 2008; Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by retailers in Belgium, 2008; Average price of extended warranties as a % of price of the underlying products in Belgium, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in Belgium, 2007; Total value of sales of white goods, brown goods and furniture in the Czech Republic, 2003-7; Value per household of sales of white goods, brown goods and furniture in the Czech Republic, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in the Czech Republic, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in the Czech Republic, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by retailers in the Czech Republic, 2008; Average price of extended warranties as a % of price of the underlying products in the Czech Republic, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in the Czech Republic, 2007; Total value of sales of white goods, brown goods and furniture in France, 2003-7; Value per household of sales of white goods, brown goods and furniture in France, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in France, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in France, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by retailers in France, 2008; Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by retailers in France, 2008; Average price of extended warranties as a % of price of the underlying products in France, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in France, 2007; Total value of sales of white goods, brown goods and furniture in Germany, 2003-7; Value per household of sales of white goods, brown goods and furniture in Germany, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in Germany, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in Germany, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by retailers in Germany, 2008; Average price of extended warranties as a % of price of the underlying products in Germany, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in Germany, 2007; Total value of sales of white goods, brown goods and furniture in Italy, 2003-7; Value per household of sales of white goods, brown goods and furniture in Italy, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in Italy, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in Italy, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to; white and brown goods offered by retailers in Italy, 2008; Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by retailers in Italy, 2008; Average price of extended warranties as a % of price of the underlying products in Italy, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in Italy, 2007; Total value of sales of white goods, brown goods and furniture in the Netherlands, 2003-7; Value per household of sales of white goods, brown goods and furniture in the Netherlands, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in the Netherlands, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in the Netherlands, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by retailers in the Netherlands, 2008; Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by retailers in the Netherlands, 2008; Average price of extended warranties as a % of price of the underlying products in the Netherlands, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in the Netherlands, 2007; Total value of sales of white goods, brown goods and furniture in Poland, 2003-7; Value per household of sales of white goods, brown goods and furniture in Poland, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in Poland, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in Poland, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by retailers in Poland, 2008; Average price of extended warranties as a % of price of the underlying products in Poland, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in Poland, 2007; Total value of sales of white goods, brown goods and furniture in Spain, 2003-7; Value per household of sales of white goods, brown goods and furniture in Spain, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in Spain, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in Spain, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by retailers in Spain, 2008; Average price of extended warranties as a % of price of the underlying products in Spain, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in Spain, 2007; Total value of sales of white goods, brown goods and furniture in Sweden, 2003-7; Value per household of sales of white goods, brown goods and furniture in Sweden, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in Sweden, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in Sweden, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by retailers in Sweden, 2008; Average price of extended warranties as a % of price of the underlying products in Sweden, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in Sweden, 2007; Total value of sales of white goods, brown goods and furniture in the UK, 2003-7; Value per household of sales of white goods, brown goods and furniture in the UK, 2003-7; Total value and value per household of sales of white goods, brown goods and furniture in the UK, 2003-7 (data); Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by manufacturers in the UK, 2008; Penetration rates, scope of cover, operating models and partner market shares for extended warranties linked to white and brown goods offered by retailers in the UK, 2008; Penetration rates, operating models and partner market shares for extended warranties linked to furniture offered by retailers in the UK, 2008; Average price of extended warranties as a % of price of the underlying products in the UK, 2008; Estimated market size in terms of revenues / premiums written, for warranty and insurance programs linked to nonmobile consumer products in the UK, 2007; Distribution interfaces and channels used by consumers for purchasing extended warranties for electronic appliances in the UK, 2007; Importance of extended warranties packaged with bank accounts / credit cards and multi-appliance warranties in the UK, 2007

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