Banks taking chunk of mobile insurance market

Banks taking chunk of mobile insurance market

Operators and retailers are launching a renewed assault on the mobile phone insurance market in a bid to halt plummeting insurance sales in the face of competition from banks.

According to the latest figures from insurance group Lifestyle Services Group, more than two million people have dropped insurance plans from operators and retailers over the past four years. More than four million people have signed insurance deals with their bank during the same period. Banks have more than nine million mobile phone insurance policies compared with only 4.5 million policies taken out with mobile phone operators and retailers.

To fight back, operators and retailers are looking to launch a range of cheaper alternatives, which add extras such as instant swap-outs and cloud services to ensure data is backed up.

Speaking to Mobile, LSG head of marketing Mark Read (pictured) said: ‘It’s a huge value opportunity that operators and retailers are losing to the banks. The additional four million customers banks have gained in the past four years represent around £500m of value.

‘Insurance is not just a revenue generator. It also impacts on customer satisfaction. Networks offering insurance can see a 20% increase in their net promoter scores.’

Networks and retailers are also looking to offer simpler insurance deals to ensure they are sold compliantly, in the wake of the PPI mis-selling scandal that triggered mass consumer claims. LSG sister company Phones 4u recently launched a new insurance product called Phones4u Care, which covers accidental damage but not loss or theft. It also guarantees in-store same-day replacement of the customer’s phone.

Read said: ‘This has lowered the price point dramatically and recognises consumers’ increasing reliance on their phones, which requires a rapid replacement service. At the same time, because it is a simplified insurance, it is easier to sell and easier for the customer to understand.’

EE has also overhauled its insurance service, launching Clone Phone Fully Loaded across its Orange, T-Mobile and 4GEE brands this month. The fully insured service includes rapid handset replacement and a data-saving cloud service. EE and LSG also run a ‘Sell More, Sell Better’ principle backed by a 20-strong sales development team aimed at helping increase insurance sales while ensuring they sell compliantly.

O2 is also taking its fight back to the banks’ doorstep, offering travel insurance as well as mobile phone insurance and its Blue Book data protection service.

Industry analysts said networks and retailers need to react to the changing market. Dario Talmesio at technology analyst Informa said: ‘Operators need to play to their strengths, and bundling rapid replacement and data back-up services along with insurance gives them a competitive advantage over banks. However, banks know the financial risk of a customer better and can offer bundled insurance deals, so competition will remain intense.’

Written by Mobile Today
Mobile Today

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I am confused. I thought LSG also insure banks, networks and retailers. Mark Reid forgot to mention that, does that mean LSG are launching a battle ag ...
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