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January 17, 2017updated 13 Apr 2017 8:23am

Time for insurers to tap into market for offering wearable tech cover

Patricia Davies, head of content, general insurance, at Verdict Financial, says although wearable devices may be viewed as desired pieces of kit, Verdict Financial’s 2016 UK Insurance Consumer Survey reveals only 32.2% of those who own a wearable device have actually insured it.  This signals a missed opportunity for insurers.

By Patricia Davies

Patricia Davies, head of content, general insurance, at Verdict Financial, says although wearable devices may be viewed as desired pieces of kit, Verdict Financial’s 2016 UK Insurance Consumer Survey reveals only 32.2% of those who own a wearable device have actually insured it.  This signals a missed opportunity for insurers.

Wearable devices are fast becoming popular among consumers. These electronic devices are normally incorporated into items of clothing and accessories and enable users to communicate hands-free, monitor health and fitness, and often sync with a user's mobile device, for example a smart watch. 

Verdict Financial’s 2016 UK Insurance Consumer Survey reveals that 16.2% of consumers have at least one wearable device, and this is expected to grow as another 20.1% of respondents would like to have one.  As expected, penetration is more prevalent among younger consumers. Popularity reduces with age, resulting in those aged under 40 accounting for 64% of those with this type of gadget.

However, while these may be desired pieces of kit, owners are not that worried about insuring them.  According to our survey only 32.2% of those who own a wearable device have actually insured it.  This signals a missed opportunity for insurers.

Of those who do insure their gadget, 53.4% do so under their home insurance cover, while 21.6% have cover through their bank as part of their added value package. Consumers who do not have either of these covers in place opted for convenience by adding the cover when they purchased the device, while a small number purchased insurance independently.

As these gadgets evolve in sophistication they are also likely to increase in value, something we have already seen happen to mobile phones.

The latest top-of-the range mobiles are now retailing for approximately £600. 

Opportunity for insurers

This gap in the market provides an opportunity for insurers, but they also need to understand how best to target this market. With new startups entering the market, traditional insurers need to move quickly to maximize this opportunity and convince consumers that cover is needed.

 

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