Canada Extended Warranty Market Outlook – 2031
The Canada Extended Warranty Market was valued at $7,853.44 million in 2021, and is projected to reach $22,274.36 million by 2031, registering a CAGR of 11.3% from 2022 to 2031.
An extended warranty is a sort of warranty that extends beyond the manufacturer's guarantee to cover the repair and maintenance of a product. It's more of a service contract than a warranty because it is an optional coverage for service-related claims acquired by the buyer. Like expressed warranties, extended warranties have terms and conditions, and coverage can be denied if the buyer breaches the agreement. Extended warranties are most commonly available on high-value items such as cars, electronics, and appliances. Although sold by the retailer, the manufacturer is responsible for executing the extended warranty on behalf of the customer.
The rise of the Canada extended warranty market is fueled by increased adoption of smartphones, computers, home appliances, and other similar products. These items usually come with a hefty price tag at the time of purchase. Therefore, to maintain safety of their electronic products post expiry of sellers’ warranty, consumers largely purchase extended warranties. As a result, these factors propelling the Canada extended warranty market growth. In addition, increased awareness regarding the extended warranty policies among the consumers are some of the factors propelling the market growth.
However, unit shipment for personal computers (PC) have been on the decline and thus, the decline in sales of PCs have lowered the demand for extended warranty policies. On the contrary, developing economies offer significant opportunities for insurers to expand their business by strengthening policies to support the development of extended warranty. In addition, extended warranty provides a huge potential for expanding existing products and services, and the insurers have numerous opportunities such as to offer value added services to customers and expand product & service offerings by executing partnerships. Therefore, these factors are expected to provide lucrative growth opportunities to the Canada extended warranty market in the coming years.
The report focuses on growth prospects, restraints, and trends of the Canada extended warranty market outlook. The study provides Porter’s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers, on the Canada extended warranty market analysis.
By Coverage
Standard Protection Plan segment accounted for the highest market share during 2022 - 2031
Segment Overview
The Canada Extended Warranty Market is segmented on the basis of coverage, application, distribution channel, and end user. By coverage, it is segmented into standard protection plan and accidental protection plan. By application, it is classified into automobiles, consumer electronics, home appliances, mobile devices & PCs, and others. By distribution channel, it is segregated into manufactures, retailers, and others. By end user, the market is divided into business and individuals.
By Distribution
Manufacturers segment dominated the market during the forecast period
By coverage, the standard protection plan segment acquired the largest Canada extended warranty market size in 2021. This is attributed to the fact that these extended warranty plans are mainly suitable for consumers looking for an uncomplicated usage experience and longer life for their devices. This extended warranty plan largely covers mechanical and electrical defects provided by manufacturer’s warranty in the market.
Competitive Analysis
The report analyzes the profiles of key players operating in the Canada extended warranty market such as Assurant, Inc., American International Group, Inc., AutoPair Warranty Inc., AXA, Amtrust Financial, Asurion, Endurance Warranty Services, LLC, Ensurall, GuardTree Inc., and Toronto Appliances Service Ltd. These players have adopted various strategies to increase their market penetration and strengthen their position in the Canada extended warranty market.
By Application
Automobiles segment will generate the highest revenue during 2022 - 2031
COVID-19 Impact Analysis
The pandemic has a moderate impact on the Canada extended warranty industry as several countries have imposed travel ban; policyholders were filing claims, demanding further extension of extended warranty coverage; and there were changes in terms of policies in the Canadian market. This has led insurers to freeze sales of new coverages for extended warranty in the market. Although the COVID-19 outbreak negatively impacted the growth of the Canada extended warranty market, the industry has recovered quickly. This is attributed to increase in government support & initiatives toward the insurance industry and increase in purchasing power of customers to buy extended warranty in the country.
By End User
Individuals segment will lead the market throughout the forecast period
Top Impacting Factors
Surge in Awareness For Extended Warranty Coverage in Canada
Many electronic are expensive and have delicate framework; hence, awareness about extended warranty for those products have increased tremendously among consumers. According to a survey conducted by AmTrust, 51% of the respondents are aware of the extended warranty contracts. In addition, as consumers are often worried about safety of their electronic products post expiry of seller’s warranty; thus, coverage for extended warranty has increased among the consumer electronics & mobile devices segment. Furthermore, awareness for extended warranty, especially for used cars has increased among consumers owing to increased product launches by key players in the countries. For instance, in May, 2021, GuardTree, a Canadian subscription-based direct-to-consumer warranty company for used cars, was officially launched in Ontario with the goal of enabling customers to quickly and conveniently buy and activate affordable warranty protection for their used cars, online. Moreover, current technological changes such as blockchain technology has led to innovations and new trends in the extended auto warranty industry. In addition, providing extended warranty helps in building customer loyalty. Thus, rise in awareness for extended warranty in Canada propels the market growth.
Rise in Penetration of Laptops, Smartphones, and Tablets
Smart phone and gadgets have become an internal part of everyone’s life, this has created a need to protect these devices against damage and extending the lifetime value. Therefore, provision of extended warranty for these goods have fostered market competition. Moreover, rise in prices of raw materials continue to imply pressure on profit margins of manufacturers and retailers of consumer electronic products. Furthermore, extended warranty solutions for these goods are continuously evolving and are expected to maintain their dominance during the forecast period. Thus, continuous rise in use and adoption of laptops, smartphones, tablets, and other brown goods fuel the growth of Canada extended warranty market.
Increase in Incidents of Accidental Damage, Phone Thefts, virus Infection, and Device Malfunction
Rise in demand for extended warranty coverage on events such as mechanical breakdown, liquid damage, theft, and unauthorized usage is propelling the growth of the Canada extended warranty market. In addition, the insurance companies are increasingly providing full coverage with advanced services to the customers in their extended warranty portfolio. In recent years, there has been an increase in the number of accidents, in terms of accidental damage from handling and loss protection, which resulted in an increase in the need for extended warranty plans among the consumers. For instance, a study conducted by ASSURANT, INC., a global extended warranty coverage provider, stated that in 2019, around 34% consumers purchased extended warranty for more than two years for their appliances. Hence, these aforementioned factors are expected to boost the Canada extended warranty market share in the future.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the Canada extended warranty market forecast from 2021 to 2031 to identify the prevailing market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities of Canada extended warranty market overview.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders to make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the Canada extended warranty market segmentation assists in determining the prevailing Canada extended warranty market opportunity.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes an analysis of the regional as well as Canada extended warranty market trends, key players, market segments, application areas, and market growth strategies.
Canada Extended Warranty Market Report Highlights
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Analyst Review
The use of AI and machine learning to manage questions and claims through chat, phone, and online forms drive the demand for extended warranties among businesses and people in Canada. This contributes to the market's expansion. The market is projected to develop due to manufacturers' increasing efforts to prioritize customer service while giving an extended warranty through various different programs. To increase consumer loyalty, Canadian manufacturers are making extended warranty schemes more transparent in terms of duration and coverage. As a result, the demand for extended warranties has increased in the country.
Furthermore, industry growth is expected to be fueled by the personalization of extended warranties with details relevant to consumer products. Moreover, the leading companies in Canada are digitizing extended warranty processes for consumers to file claims for their products with just a click, which eliminates the use of receipts while generating faster and more efficient responses. The rise in demand for technical assistance with an extended warranty is leading companies to provide product installation and remote diagnosis in consumer electronics.
The Canada extended warranty market has faced moderate impact of the COVID-19 pandemic, as consumers have reduced purchasing electronic products during the lockdown due to lower income level. However, due to surge in online shopping, there’s a spike in demand for consumer electronics from e-commerce websites along with extended warranties. This, in turn, boosted the growth of Canada extended warranty market during the pandemic.
The Canada extended warranty market is fragmented with the presence of regional vendors such as Assurant, Inc., American International Group, Inc., AutoPair Warranty Inc., AXA, Amtrust Financial, Asurion, Endurance Warranty Services, LLC, Ensurall, GuardTree Inc., and Toronto Appliances Service Ltd. Major players operating in this market are adopting various strategies that include business expansion and partnerships to reduce supply and demand gaps. With increase in awareness and demand for Canada extended warranty across the globe, major players are collaborating on their product portfolio to provide differentiated and innovative products.
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