The Hidden Opportunity in Phone Insurance
We often look at markets and ask how we can sell more.
How do we improve conversion? Overcome objections? Increase attachment?
That’s the classic sales approach.
But in phone insurance — and probably many other forms of insurance — these tactics only address what is happening at the surface.
Phone insurance is already a massive market. Industry research has estimated the global mobile phone insurance market at $24.6 billion in 2020 and projected it to reach $74.5 billion by 2030.
And yet, we believe there is a significant part of the market that the industry isn’t adequately addressing.
Look beneath the attach rate
Phone insurance has existed in essentially the same basic form since the 1990s.
The value proposition is straightforward: pay a recurring fee and, if something happens to your phone, insurance helps reduce the financial impact.
It works.
Millions of consumers buy it.
But when we started looking more deeply at customer behaviour, we saw something interesting.
Some customers eventually cancel their phone insurance for a very simple reason:
They never make a claim.
Think about that from an insurance-book perspective.
The customers questioning the value of the product can actually be some of the customers
you most want to keep — people who take care of their devices and rarely claim.
The traditional insurance proposition doesn’t necessarily recognize that behaviour.
Month after month, the customer pays the same price. Eventually some begin asking:
“Why am I still paying for this?”
The invisible retention problem
Integrated billing can make this behaviour harder to see.
When device protection is incorporated into a larger wireless bill, the individual cost can become less visible. That can help retention, but it doesn’t necessarily mean the underlying customer perception has changed.
The customer may still believe:
“I don’t make claims, so this isn’t worth it for me.”
That creates a vulnerability for the industry — but also an opportunity.
Instead of only asking how to increase attachment, perhaps we should also be asking:
Why did customers who once purchased phone insurance decide they no longer wanted it?
And even more importantly:
What would make them come back?
The market beyond today’s insurance customer
There is another large population that rarely gets discussed.
People who don’t currently buy phone insurance.
Some have never purchased it.
But others have purchased protection before and cancelled, or chose not to purchase it again.
Why?
For some, it isn’t because they don’t value protection.
It’s because they believe their personal likelihood of needing it doesn’t justify the price.
They’re careful with their phones.
They rarely break them.
They rarely make claims.
Yet they’re generally offered the same basic insurance proposition as everyone else.
That raises a much bigger question.
What if insurance could recognize that?
What if customers who represent lower risk could actually benefit from being lower risk?
We believe a significant new market can emerge by making protection feel fairer to the people who have historically decided it wasn’t worth buying.
That’s why we spent years developing technology around this problem.
The future of phone insurance may not simply be about selling more insurance.
It may be about creating a fundamentally better reason to keep it.
And potentially bringing millions of consumers back into the market.
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