Insurance Tech

Wearable devices are desired, but not seen as important to insure

Wearable devices are desired, but not seen as important to insure. Photo: 279photo Studio, Shutterstock.com
Written by Stewart McEwan

There are missed opportunities for traditional insurers when it comes to wearable devices, says Stewart McEwan.

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 smartwatch).

GlobalData’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.

Percentage of survey respondents owning wearable gadgets. Image: GlobalData

However, while these may be desired pieces of kit, owners are not that worried about insuring them. According to the 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 don’t 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.

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 maximise this opportunity and convince consumers that cover is needed.

Percentage of survey respondents who had insured their wearable gadgets. Image: GlobalData

READ NEXT: Forget yoga. Wearables insurance is the path to a better life!

– This article is reproduced with kind permission from GlobalData Financials. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Photo: 279photo Studio, Shutterstock.com

About the author

Stewart McEwan

Stewart McEwan is a senior analyst at Verdict Financial, specialising in general insurance. He is particularly interested in the new challenges the market faces in an online 'big data' world and growth in the innovative ideas, approaches, and disruptive players that are setting the pace in the industry.

Leave a Comment